Paying it Forward: Marketwatch Picks Up
the Social Security Payback Story

One of the first things I do every day is check www.marketwatch.com for the morning's financial news. Today, MarketWatch picked up the story of paying back social security with an article entitled Paying it Forward: Little-known rule lets you restart Social Security and collect more each month. I imagine that with over 50% of "Age 62-ers" currently opting to begin benefits early, and with the increasing trend toward "encore careers," that there will be many more such articles, and the payback rule won't be so "little known."

There isn't too much that's factually new in this article but here are some quotable quotes:

"Paying back your benefits and then restarting at a later age can mean a 'potentially huge increase in your living standard,' said Laurence Kotlikoff, an economist at Boston University."
"Social Security beneficiaries 'should definitely look into it because the increases you get by delaying are so substantial and they are guaranteed,' Fahlund said. Plus, she said, Social Security's annual cost-of-living adjustment works in your favor at a higher monthly benefit."
... and here's my favorite ...

" 'People don't necessarily get where the risk is here," Kotlikoff said. 'When you're dead, you're not going to feel bad because you left money on the table. It's only when you're alive that you've got to care about it.' Running out of money before you die is the biggest risk, he said."
So if I haven't convinced you with all my other ranting and nagging, you may want to head over to www.marketwatch.com and check it out. It's one of my "Platinum WebSites," as listed in the right hand column, so I'm sure you go there all the time, right? Seriously, Marketwatch is a great financial web site and their articles are very good.

They also have a huge readership so this article got a lot of comments, over thirty so far. And they are revealing a lot of the misconceptions people have about social security in general and the issue of when to begin taking benefits in particular. So in my next blog I plan to share a sampling of the idiotic, um, I mean, misguided, but sadly common misconceptions that are out there. :-) Bob

Comments

Post a Comment

Popular posts from this blog

The Benefits of Delaying Social Security

I occasionally plow through dreary assessments of how little we boomers are inclined to save and the risks that creates with our retirement prospects…. I do this reading for you, so you won’t have to :-) Occasionally a gem of wisdom will pop out, making it all worthwhile. And those, of course I will pass along. So from an Economic and Budget Issue Brief from the Congressional Budget Office, dated March 14, 2004, entitled “The Retirement Prospects of the Baby Boomers,” comes an excellent and concise summary from a section entitled “The Effects of Delaying Retirement”: "For households facing shortfalls in their retirement savings, relatively small changes in behavior can have surprisingly large effects. Because people who retire at 62 can expect to live another 20 years, each year they postpone retirement reduces their need for retirement savings by about 5 percent. An extra year of work also increases their Social Security benefits by several percent. Taken together, those effects ...
Read more

Pay Back Your Social Security
It Could Be the Best Annuity You Could Buy

The above title was the original title of yesterday's post , which later became " Social Security Decisions: Important But Not Irrevocable - You Have Much More Flexibility Than You May Think ." I actually posted it with the "Annuity" title above, but after sleeping on it overnight, I realized that yesterday's article was really about flexibility, an important issue in its own right. I have written before about flexibility. The general rule is, "Given two equally attractive decisions, always choose the one that is more "reversible," (i.e. allows you to change your mind later) Flexibilty is a key element in any personal financial decision, and retirement decisions are no exception. In fact, I think flexibility becomes MORE important as you get older, as youre "wiggle room" for creating alternatives diminishes the older you get. And I wrote on this before, in my original article, " Don't Do It ," as a major reason why ...
Read more

Social Security Decisions: Important But Not Irrevocable
You Have Much More Flexibility Than You May Think

I have written several times before on this subject, and my basic premise has been that many boomers are making a big mistake by taking social security at age 62, at least those who don’t fall under the three exceptions to the basic rule of “ Don’t Do It .” Then on February 1st , I wrote about the ability to UNtake social security by basically suspending payments, stopping the clock as it were, and gaining credits in the form of increased future payments. For example, if you start taking payments at 62, and suspend them at age 63½ for three years, at that point you would be 66½ and earning pretty much as if you had started at 65. Now comes an article from Forbes.com entitled “ Trade In Your Social Security Check ,” which describes how you can not only stop the social security clock, but you can RESET IT TO ZERO by paying back all of your previously earned social security checks WITHOUT INTEREST. Which certainly answers one of my original arguments about flexibility. You really c...
Read more