Social Security Eliminates Payback Option

A new rule prevents retirees from repaying benefits and restarting them at a higher rate -- striking down a strategy to maximize retirement income.

If you were wondering whether to take advantage of the strategy to repay all the Social Security benefits you have received so far and trade them in for a bigger monthly check, forget about it. The Social Security Administration announced Wednesday that, effective immediately, the payback strategy is no longer an option.

This little-known tactic has been gaining attention in recent years, thanks in part to a series of articles by Kiplinger that unveiled several ways of making the most of your Social Security benefits (see Secrets to Maximizing Social Security). We explained how readers could withdraw their application for Social Security retirement benefits, repay the total amount that they (and a dependent spouse or minor child) had received over the years, and reapply for a higher payment based on their current age.

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Mary Beth Franklin
Former Senior Editor, Kiplinger's Personal Finance