The little known, stealth-like provision that allows a Social Security recipient to pay back all of his/her prior benefits without interest in order to obtain a bigger paycheck into the future has been discontinued effective December 8, 2010. You can read more by going to this link: Kiplinger-Social Security.
No More Interest-Free Loans from Social Security!
The "Payback" provision, which we wrote about in our Summer newsletter, allowed recipients to pay back all of their prior benefits received, WITHOUT INTEREST, in exchange for receiving benefits going forward as if the recipient had never drawn benefits. This was significant for recipients who had drawn at age 62 and were utilizing this strategy on or after 66 years of age (assuming full retirement age) because the former age 62 benefit would be increased by the 25% penalty for drawing early as well as increased for the cost of living adjustments that had taken place during the period of time between initial draw and payback of benefits.
We will be sure to keep you posted as more details are available concerning Social Security. We would love to discuss the new options for Social Security. Give us a call or email us here:
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Posted on Mon, December 20, 2010