Withdraw from and Reapply for Social Security
Larry,
First, thank you for writing this book. It has already made my wife and me several thousand dollars by showing us how to optimize our social security spousal benefits.
I am studying the explanation about the couple that decided to withdraw from SS at age 70 and then reapply (pages 171 - 173).
Each person received $11,556 SS benefits per year for 8 years. This amounts to $92,448. The book says they will have to repay SS $71,414 to withdraw. I assume some of the benefits they received were used to pay for Medicare and if they elect to maintain Medicare, they will not have to pay that back. However, there seems to still be a significant difference between the total SS received and the amount they must repay to withdraw.
Please explain how the $71,414 was calculated for the repayment in this example.
Thanks in advance.
John Howe
Frugal Senior
RSS
John, You have to pay back the gross amount, before Medicare premiums are deducted. Social Security views the premiums as just some way you used their benefits. When I wrote the book, I'm not sure I knew this. But the key thing for you is to find out what you'll need to repay. Social Security should be able to tell you this is 5 minutes, but you'll probably need to go into their local office. You can roughly estimate it from your current check if you add back in the Medicare part B premium. Then multiply by 12 to get this year's benefit, then figure out the cola adjustment each year in the past and deflate backwards to get each year's gross benefit and then add the numbers together. best, Larry