Social Security double dip has become far too popular for the good of itself

If you have not heard about the social security benefits do-over, you are likely far too late. There was an option called the social security payback option, or social security benefits double-dip. This allows people to take out social security benefits early with the hopes of paying it back at a later time. One can start over later. The social security checks are bigger. You end up with lots of money with the Social Security benefits do-over. Even if you got an annuity from an insurance business, you still wouldn’t be able for making as much money. But the practice is becoming so popular that the Social Security benefits Administration wants to end it.

Social Security payback option catches on

In 2007, 500 individuals used the Social Security payback option. The strategy is becoming more popular ever since a series of articles in Kiplingers about maximizing Social Security benefits. Kiplingers reports that by 2009, the number had almost doubled. Retirees learned that they could repay the benefits they had collected so far, with no penalties and no interest and then restart them to receive bigger payouts. Better yet, a tax credit or a tax deduction could be claimed for income taxes paid on the benefits paid back.

Double-dip Social Security

Retirees become eligible for Social Security at age 62. The “normal retirement age” is now being considered 66. This means at age 62, you only get 75 percent of what you can get at age 66. Wait as long as you are able to until age 70. If you are able to, you’ll get each year past 66 8 percent more . In 8 years of waiting, benefits increase 132 percent. Once the process is started and the benefits are repaid, people can reapply for higher Social Security payments, a larger base amount for cost-of-living adjustments and maximum lifetime benefits for a surviving spouse.

It will end

Social Security will begin paying more in benefits than it collects in payroll taxes by 2016, according to the annual report of government trustees. In 2037, it could be much worse. The government will only be able to pay three quarters of benefits from incoming taxes. Cost-cutters have decided to make Social Security benefits do-over’s more attracted ever since Kiplingers explained this. According to Daily Finance, retirees should only have one year to change their minds to the payback option if the Social Security benefits Administration gets its way with the Office of Management and Spending budget. Correcting the mistake of getting benefits too early rather than using an investment strategy is what this is for. The Social Security benefits do-over is changing in this way.

Additional reading

Kiplingers

kiplinger.com/features/archives/social-security-payback-option-may-disappear.html

Daily Finance

dailyfinance.com/story/social-security-administration-seeks-to-put-an-end-to-do-overs/19613383/