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Author: Rayvt Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 81338  
Subject: Re: End of Social Security Loophole Date: 12/11/2010 11:16 PM
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Rayvt maybe looking at the large sum it costs you when you withdraw/re-apply!!

Using 2006 male mortality rates, and 3% interest return on that SS income from age 62 if you reapply, there is about a 40% chance you would not recover your "costs".

I was really just thinking a of the fact that you'd pay back a whole lot of money (ca. $130K) for the SS benefits you collected for 8 years (62 to 70)....and that the life expectancy of a 70 year old is a lot lower than that of a 62 year old.

The risk is really that of an SPIA--you pay them 100K+, collect higher benefits for a couple years, then drop dead.

Of course, as the original article said, the "loophole" was essentially an SPIA.
But all the breathless excitement only talked about the "zero interest" loan aspect, which is a lot more sexy and a lot more misleading than the SPIA aspect.

When I said, "re-expose to mortality risk" I was referring to people who thought they were getting a zero interest loan.
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