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Author: telone One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19257  
Subject: Social Security 62/65 Article Date: 3/14/2000 11:51 AM
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Dear Pixy: Thx for a very thorough and well-written article on the subject of social security -- 65 or 62.

Regarding the statement that "taking the reduced benefit at 62 permanently reduces the benefits," mnay I add that the SS rules allow a person who started taking reduced benefits at 62 to exercise an option at 65 (or any age between 62-65) of "buying back" those "before-65-years" by paying back to the SS those benefits previously received and then "upgrading" the benefit to the current time of the buy-back. Thus, at age 64 and 9 months, if a person's "ship came in," the person could pay back to SS the 2 and 3/4 years of previously received reduced benefits, then go on to claim the SS benefits due at 64 and 3/4 years.

Also, if one is happily employed, there is an added SS benefit of 5.5% per year (above inflation, wage gains, etc) for every work year beyond 65 for folks like me born in 1934. This added benefit (about $1,000 per year) is far greater in magnitude than any enhanced benefit from replacing a higher earnings year (by working longer) in the 35-high-years-calculation (added benenefit about $150 per year) for benefits since the higher earnings years play a greatly reduced role (percentage-wise) in the SS benefit calculations. And, the higher benefit may provide a spouse a higher benefit (than from the spouse's own work record) once the person retires and will also provide her with this higher enhanced benefit if the person were to "bite the dust."

I'm not advocating this option for anyone -- just providing some information. At the end of the day, it comes down to personal choice.
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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2877 of 19257
Subject: Re: Social Security 62/65 Article Date: 3/14/2000 2:17 PM
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Greetings, Telone, and welcome. You wrote:

<<Regarding the statement that "taking the reduced benefit at 62 permanently reduces the benefits," mnay I add that the SS rules allow a person who started taking reduced benefits at 62 to exercise an option at 65 (or any age between 62-65) of "buying back" those "before-65-years" by paying back to the SS those benefits previously received and then "upgrading" the benefit to the current time of the buy-back. Thus, at age 64 and 9 months, if a person's "ship came in," the person could pay back to SS the 2 and 3/4 years of previously received reduced benefits, then go on to claim the SS benefits due at 64 and 3/4 years.>>

Unfortunately, that is not true as a quick call to the Social Security Administration will confirm. It's a rumor or old wive's tale that crops up from time to time, but it has no basis in fact. You cannot buy back the age-65 benefit under any circumstances. All that's possible is an increased reduced benefit that may result from additional earnings from work done after benefits have commenced.

<<Also, if one is happily employed, there is an added SS benefit of 5.5% per year (above inflation, wage gains, etc) for every work year beyond 65 for folks like me born in 1934. This added benefit (about $1,000 per year) is far greater in magnitude than any enhanced benefit from replacing a higher earnings year (by working longer) in the 35-high-years-calculation (added benenefit about $150 per year) for benefits since the higher earnings years play a greatly reduced role (percentage-wise) in the SS benefit calculations. And, the higher benefit may provide a spouse a higher benefit (than from the spouse's own work record) once the person retires and will also provide her with this higher enhanced benefit if the person were to "bite the dust."

I'm not advocating this option for anyone -- just providing some information. At the end of the day, it comes down to personal choice >>


That is correct. On reaching age 70, that benefit starts at the increased level even if the recipient continues to work.

Regards..Pixy

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Author: telone One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2879 of 19257
Subject: Re: Social Security 62/65 Article Date: 3/14/2000 3:02 PM
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Pixy: Thx for the correction. I read that in one of the "money bibles" (Kiplinger's, I believe) some time back and took the buy-back option it to be "true."

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Author: P3M3M8 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2903 of 19257
Subject: Re: Social Security 62/65 Article Date: 3/15/2000 12:55 PM
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confused by Mrs. Pixy benefits. I took early benefit. Mrs. is concered she will have to take benefit based on her work record [she quit working shortly after marrage]. I was told she could collect on my recoed when she becomes 62. Whats correct..age and benefit.

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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 2904 of 19257
Subject: Re: Social Security 62/65 Article Date: 3/15/2000 1:13 PM
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Greetings, P3M3M8, and welcome. You asked:

<<confused by Mrs. Pixy benefits. I took early benefit. Mrs. is concered she will have to take benefit based on her work record [she quit working shortly after marrage]. I was told she could collect on my recoed when she becomes 62. Whats correct..age and benefit. >>

As far as age is concerned, both you and your spouse may draw reduced benefits at age 62. And, assuming your spouse has enough quarters of credit (she needs 40) to draw on her record, then here's how it works.

When a person has a work record with sufficient credit, then that person will always draw on that work record. If a spousal benefit provides a higher benefit, then that person's check will be supplemented by the higher earner's record so that it equals the higher benefit.

As a quick example, say my spouse is entitled to a $500 monthly check on her record. As my spouse, she is entitled to $600 per month on my record. She draws first on her own record, then from mine up to the point where her payment equals the highest benefit to which she is entitled. Thus, she gets $500 from her work plus an additional $100 from mine, for a total of $600.

If she was entitled to $650 on her own record, then she would draw no spousal benefit at all because her own benefit is already higher than the $600 she could receive as a spouse.

In short, no spouse is entitled to both the spousal benefit and their individual work benefit at the same time. Instead, the spouse is entitled to a payment that equals the highest benefit for which he/she is eligible. And in drawing that benefit, part or all of the payment will come from their own work record to be supplemented as needed from the other spouse's work record.

Regards..Pixy

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