Q: I am 65 with a birthday in July. I plan on retiring next year (FERS), and am considering submitting for my Social Security benefits back to my 66th birthday, in December 2011. I believe that means I will collect my four months of previously earned checks next year, thereby pushing my tax liability for that money into 2012. Am I misreading the Social Security website (it says six months max back payment), or is this possible?
A: What you read on the Social Security Administration website is correct. However, while you are reviewing the tax implications of applying for a benefit at once or delay applying for it, I suggest that you also go to www.socialsecurity.gov/pubs/10077.pdf, scroll down to page 15, and read the section headed “a special monthly rule.”