Summary of Chapter 4: Getting More by Retracting Your Application and Refiling (The “Reset”)
Before December 8, 2010 the “Reset” was a popular way to give yourself an “interest-free” loan. However, new regulations limit this option and increase the risk of this approach. This is how it works, during the first 12-months that you begin to receive Social Security benefits you can withdraw your application. This is a once in a lifetime SSA approved option. Let’s say that you apply for benefits on your 62nd birthday. You are nearing your 63rd birthday and you realize that you have to go back to work. To stop benefits use the one-page request form titled, “Withdrawal Application Form SSA-521”. The benefit of this strategy is that it is similar to buying an immediate annuity, except that you don’t have to pay any interest on the benefits you have already received. The difficulty of this strategy is that you’ll need the cash on-hand to pay back the benefits you received. However, for some folks that have assets, need cash and would have to pay a high penalty for “cashing out” early this approach may be a viable option.
About ksindell
Kathleen Sindell, Ph.D. is the author of numerous academic, popular, and professional finance articles, Web sites, proposals, and books. This includes the bestselling reference book, "Investing Online for Dummies, Eds 1-5" (listed for two consecutive years on the Wall Street Journal's Bestselling Business Book List). Her most recent book "Social Security: Maximize your Benefits" has been listed in Amazon's Top 100 Bestselling Retirement Planning Books. It is important to note that "Social Security: Maximize Your Benefits, 2nd Edition" was just released.
Sindell has an in-depth understanding of the financial services industry and has held Series 7, 63, and 65 licenses. Dr. Sindell is regularly tapped as a financial services expert on ABC World News, The Nightly Business Report, and at popular online and print outlets. Kathleen Sindell, Ph.D. is a member of the Board of Directors for the Financial Planning Association, National Capital Area (FPA NCA), is on the Editorial Advisory Panel of the Journal of Financial Planning, and is Co-Chair of the Metro Washington Financial Planning Day. Sindell is a Course Chair II, CFP Program Academic Officer, and adjunct full-professor at the University of Maryland, UMUC, School of Undergraduate Studies.
Contact Information: ksindell@kathleensindell.com or 703-299-1700
