Ask the Expert: Social Security rules

To preserve tax breaks for your heirs, name

To preserve tax breaks for your heirs, name contingent beneficiaries on your retirement accounts. (Credit: iStock)

Lynn Brenner

Lynn Brenner Lynn Brenner

Brenner answers questions about all aspects of family finance.

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I began collecting Social Security 19 years ago, at age 64. At 62, my wife began collecting her benefit based on my earnings. I've read that if I request a "withdrawal of application," Social Security will treat me as if I had never applied for benefits and let me immediately reapply at 82, my current age. Is this accurate?

 

Not anymore. Until 2010, you could withdraw your Social Security application no matter how long you'd collected benefits. Now this option is available only for 12 months after your initial filing.

But one thing hasn't changed: When you withdraw your Social Security application, you must repay all the benefits you've already received. Let's say Joe took Social Security 11 months ago at age 62 and got $750 a month. Now, he regrets applying early. He can push a reset button by withdrawing his application and repaying $8,250 ($750 x 11). He can reapply when he's older so he can collect a bigger benefit. If he waits until 70, he'll get $1,320 a month. There's no benefit increase for delaying application after age 70.

Even if you could still do this, in your case it wouldn't make financial sense. Your full retirement age was 65, says Jane Zanca, a Social Security Administration spokeswoman. Your benefit was reduced because you applied early, but you received about 94 percent of the full amount. To start over, you'd have to repay 19 years of Social Security benefits -- including those paid to your wife because they're based on your earnings. The benefit boost you'd gain by reapplying at 82 would never be enough to make up the amount you'd have to pay back, Zanca says.

The bottom line You can withdraw your Social Security application and repay the benefits you've collected -- but only within 12 months of your initial filing.

Websites with more information 1.usa.gov/11m7aR7 and 1.usa.gov/1aq8TIe

TO ASK THE EXPERT: Send questions to Ask the Expert / Act 2, Newsday Newsroom, 235 Pinelawn Rd., Melville, NY 11747-4226, or email act2@newsday.com. Include your name, address and phone number. Questions can be answered only in this column. Advice is offered as general guidance. Check with your own advisers for your specific needs.

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