The Best Way to Bump Up your Social Security Benefit
Some people out there, take advantage of their Social Security benefits even before they ever reach retirement age. The pay is no longer as good as it might have been, and many people wonder if there is a way to remedy the situation. Well, usually, you would have to buy some kind of an annuity to provide yourself with an additional income. But these are really not predictable, in the way they work. Who could trust in buying an annuity when the only thing they give you for sure is reams of microscopically printed rules and warnings. There is a much more palatable option, for the millions of really old people, who started their Social Security benefit checks at a rather early retirement age: you could go over to your Social Security office, and apply right from the start, all over again. It is not as difficult as it sounds.
And that's a pity, because no one actually really tries this much. All you need to do is fill out a 521 form at the Social Security office, to ask to withdraw your original application from all those years ago. Once you do that, Social Security will believe that you never applied for your Social Security benefit checks ever. And then you can apply afresh right away with your present age, and you're good to go. But there is just one little problem. Applying for Social Security before you hit 65 or so lets them cut down on your payments. If you retire four years before you're due, it lets them get away with paying you only three-quarters of what they would otherwise give you. If you continue to work after 65, and do not claim benefits until then, they give you a 1% raise for each month you wait (up until you're 70). If you wait a full five years, you will get a full third more on your Social Security benefit. If you withdraw your Social Security application today, and pay them back everything you got so far, and apply all over again, you could probably knock your Social Security benefits package up by about three quarters. But hold on there, what was that about paying them back everything?
That's the little problem I mentioned earlier. You need to do that before you are allowed to fly again. If you received a $1000 check every month, you'll need to return $12,000 for every year that you received it.You'll have to pay them that money in today's dollars; if you got $12,000 for each year back when the dollar was worth much more, you'll just have to pay them back in today's dollars, that are far cheaper. This is such an awesome deal, much better than you ever get investing in the stock market. No publicly available life annuity, no living benefits variable annuities, mutual funds, ever is going to give you an inflation-adjusted income of this kind.
But that's not all; by pushing up what you get with your Social Security benefit package, and taking down investment income, you could conceivably, end up paying no taxes on your Social Security benefits at all. Now that is one great secret Social Security benefit.
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