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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 62^nd birthday. You are nearing your 63^rd 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.

Summary of Chapter 3: Maximizing Survivor Benefits

This chapter helps individuals identify the definitions and eligibility rules of survivors in traditional and non-traditional unions. You’ll see how the definitions and eligibility requirements for survivors are similar for spouses, ex-spouses and dependent children (and how there are a few striking differences). Combined family maximum limits are explored and the taxation of survivor benefits is discussed. Next the differences between fully insured and currently insured survivor benefits are reviewed. Survivor eligibility requirements and benefit amounts are considered for several survivors early retirement scenarios. Numerous survivor claiming strategies are explored and compared. Optimal claiming strategies based for a deceased non-FRA (full-retirement age) worker and a young widow(er) and FRA widow(er) are examined. In addition to optimal claiming strategies for a deceased FRA worker and a young widow(er) and FRA widow(er).