DEFINITION of 'Do-Over Option'
Allows Social Security recipients to remove their original application for benefits and re-file at a later age. The point of the do-over option is to enable Social Security recipients who started receiving monthly benefits earlier (earliest is 62 years of age) to return funds or pay back the Social Security Administration all funds previously received without having to pay interest or penalties on this money. This will allow recipients to file for Social Security benefits again later and thus receive a higher monthly check for as long as they live. Also referred to as the "reset" option.
BREAKING DOWN 'Do-Over Option'
For example, if Rob wants to start receiving his Social Security benefits at age 62 instead of waiting until his full retirement age of 66, he will receive fewer benefits. Had Rob waited to start receiving his benefits, he would have received $500 more in monthly benefits, so instead of receiving 2,000, he would currently receive $1,500. If when reaching 66 years of age, Rob refunds four years (48 months) of benefits (48 months multiplied by $1,500 per month or $72,000), his monthly benefit will increase to $2,000.