When it comes to Social Security benefits, there is such a thing as a do-over. The majority of Social Security beneficiaries claim early reduced benefits. But a little-known part of the law allows retirees who started collecting benefits to change their minds, start over and reapply for a greater benefit. The only hurdle – they must repay past benefits. A June survey by AARP found that Americans age 44 to 75 fear running out of money more than they fear death. More than half of people age 44 to 54 are afraid they won’t be able to cover basic living expenses in retirement. Resetting your Social Security benefits is essentially a safeguard against outliving your savings. “That’s the biggest worry we have – clients living past normal life expectancy and running out of money,” says Brett Horowitz, a certified financial planner and principal at Evensky & Katz. “If they’re going to live to 90, you have to make sure that they’ll have enough money in inflation-adjusted dollars.” Resetting your benefits is easiest way since it's like having an annuity that’s guaranteed for your lifetime and your spouse’s lifetime and has a cost-of-living adjustment included, he says. Retirees are allowed to draw Social Security benefits at age 62. However, according to the Social Security Administration, “full retirement age” – when you’re eligible to receive full benefits – is 65 to 67. Until then, the Social Security Administration (SSA) will deduct $1 from the benefits you were to get for every $2 you earn above the annual wage limit, which is $14,160 in 2010. PAYING IT BACK * Husband and wife – he’s 68, she’s 62. He started collecting benefits at age 62. * He’s now getting about $21,489 a year in Social Security payments. (She gets spousal benefits of $9,815 because she also collected at 62.) * He withdraws at 68, waits two years, then reapplies at age 70. * He repays $117,354 (which is tax deductible). * At 70, his new yearly benefit amount comes to about $37,111, a more than 70% increase. * This raises their sustainable spending (how much the couple can spend each year assuming he lives until 100) from $63,505 to $72,908, a 13.5% increase, according to Kotlikoff’s calculations. Read more: Repaying Social Security Can Be a Good Deal - Personal Finance - Retirement - SmartMoney.com http://www.smartmoney.com/personal-...al-security-can-be-a-good-deal/#ixzz0u5F3S49y Personal Finance Advice - Personal Financial Management - Personal Finance Articles Personal Finance Articles - MarketWatch offers personal finance advice and articles. Discover how effective personal finance management can help you save money and plan for retirement. marketwatch.com How good would this be , and can it really benifit the people under today's economy recession ?