On Wednesday December 8, 2010, two rule changes were made to Social Security that received very little media attention. Both of the changes impact the ability beneficiaries to take advantage of loopholes in the system. With these changes, effective immediately with the press release, beneficiaries only have 12 months to withdraw their application for benefits and pay back the amounts they received. This is also now limited to 1 time per person in their lifetime. The second change only allows beneficiaries to suspend the receipt of future benefits not yet received.
Taken together, these changes no longer allow people to collect benefits for several years, pay back the amounts received and increase their benefits by taking advantage of the delayed credits one gets for starting benefits after their full retirement age. These strategies have been published in the press for a few years under names like “file now, file again later” or “Repay and Reapply”.
Even without these strategies available, there are still many ways to make sure you are maximizing your Social Security benefits, potentially allowing you to receive thousands of dollars more during your lifetime. Additionally, these changes make it more important than ever to make sure that when you file benefits, you do it the right way for your financial position the first time.