Did you even know there was a do over? I bet you didn’t. Not many would know nor be in a position to take advantage of it. But, nonetheless it’s no longer an option. The Social Security Administration announced at the end of 2010 that the loophole for do-overs has closed. Now beneficiaries have only 12 months to “recharacterize” their application for retirement benefits.
So what does that mean for you? It means that you better think long and hard and crunch the numbers before you decide to take your social security early. Each year for the next 20 years, about 3 to 4 million boomers will roll into the early-claiming period by turning 62. You claim early, your benefit will be permanently reduced and if you live to the age or 85 or 90 or 96 then you have sacrificed the chance of higher income at those advanced ages.
Social Security is one of the few vehicles today that pays inflation-adjusted income for life to both the wage earner and his or her surviving spouse. Before you jump in early have a conversation with someone who knows the system and can assist you in analyzing your potential benefits. Andrea B McGrath of Bates Insurance is here to assist you.