Much has been written in recent years about a benefit claim do-over loophole in the rules governing Social Security retirement benefits. Using this loophole, a wealthy retiree could claim and receive benefits at age 62, invest them for several years, withdraw the original application for benefits, then reapply for a larger benefit based on the current age.
The Social Security Administration has now closed that loophole with a new rule. Here is the announcement:
The Social Security Administration today published final rules, effective immediately, that limit the time period for beneficiaries to withdraw an application for retirement benefits to within 12 months of the first month of entitlement and to one withdrawal per lifetime. In addition, beneficiaries entitled to retirement benefits may voluntarily suspend benefits only for the months beginning after the month in which the request is made.
That about does it. Not many folks could afford to actually use this strategy but it’s gone for good now.
You can still have a do-over but only if you change your mind within 12 months. And to avoid serial do-overs for the very clever, you only get one.
Here is a link if you like reading the fine print: New SSA Rule