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A Look At Social Security’s “Do-Over” Option
Many folks file to receive Social Security benefits before their full retirement age–in fact, age 62 is the most frequent age for most filers. Unfortunately, those who file early eventually come to regret it, especially when they realize they’ve locked in a permanent lower monthly benefit. Actuarially, it doesn’t matter, since early filers receive benefits for more months than FRA or even deferred filers, and over a theoretical lifespan, the total amount paid out is the same. But note the word “theoretically,” which assumes one’s lifespan will exactly match the mathematical lifespan used to set the benefit amounts. A longer lifespan, then, will result in less lifetime benefits.
So, if you’ve elected to file early, what can you do? The Motley Fool’s Maurie Backman, in a post today on channel3000.com, discusses an approach to canceling your earlier decision and avoiding the eventual pain of dealing with a lower benefit amount. She labels it a “trick,” but it’s not a trick at all…it’s simply a provision in the Social Security rule book that allows for a one-time change of mind. It sounds really nice, but it isn;t all that easy to do. Check out Ms. Backman’s post for details here…
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