Ken Himmler.com

When it comes time to collect your Social Security benefits, the longer you wait the more you will collect. Of course  you can start collecting Social Security anytime after age 62, but for each year you wait, your payments will increase by 7% or 8%.

"Payments increase about 7% for every year between early retirement age – 62 – and your full retirement age. So if your full retirement age is 65, your payments will increase 7% for each year between 62 and 65, and then an additional 8% for each year between 65 and 70," says Laurence Kotlikoff, a professor of economics at Boston University and co-author of Spend ‘Til the End.

For those who can afford it, waiting to tap into Social Security benefits is definitely a more lucrative bet. However, some people are taking advantage of a provision that allows them to earn even more from their Social Security benefits. Called a do-over, the recipient taps into their benefits at age 62 and invests the funds in a safe investment that earns a decent rate of return for several years, then they pay the money back and pocket the interest earned.

Do-overs were included in the Social Security Handbook to allow those who jumped the gun and started taking benefits at age 62 to correct their mistake. All they have to do is file IRS form 521, pay the benefits they’ve already received back – in full, but with no interest, penalty, or adjustment for inflation – and start taking the larger benefit as if they had waited all along.

Over the last few years, do-overs have become more well known as an investment strategy of sorts. But now the Social Security Administration wants to put a stop to the practice.

"Social Security has sent a proposed regulation to OMB [the Office of Management and Budget] for review that would establish a 12-month time limit for the withdrawal of a retirement benefit application. The proposed regulation would also permit only one withdrawal per lifetime," explains Mark Lassiter, a Social Security Administration spokesperson.

In other words, you’ll now have only one year to change your mind and return your benefits, which makes it less of a strategy and more of a way to correct your mistake. One can assume that was the intention of form 521 all along.

Read more on this important subject in recent AOL Daily Finance article here: http://www.dailyfinance.com/story/social-security-administration-seeks-to-put-an-end-to-do-overs/19613383/

In today’s volatile market environment, more and more investors are seeking refuge in stability. When most people think about investment bonds they conjure up words such as safe, steady, reliable.

In reality, it is still possible to lose money in bond investing which is why investors are urged to diversify their bond investments. By building a portfolio of investment bonds with varying interest rates, maturity dates, and associated risks such as creditworthiness, you can better protect the overall return on your investment.

Many people are aware of the obvious risks in bond investing, such as the issuer going bankrupt or defaulting on scheduled interest payments, but what about the less obvious risks that can still impact bond investment return?

While it’s true that the interest payments you will receive from owning an investment bond will be steady, the actual return that you receive when you sell your bond can vary. Let’s explore how the risk of interest rate fluctuation can influence the profit or a loss you take on your bond investments.

You may think that a higher interest rate would equate to a higher return, but the opposite is true in bond investing. When interest rates rise, it is highly probable that the issuer will offer new bonds with a higher paying interest rate. If this happens, then the value of older, lower-yielding bonds will take a hit. Given the choice, investors will opt for the higher interest return and this will impact your ability to sell.

It’s important to note that this fluctuation only applies to investors who opt to sell or trade bonds before their maturity date. If you hold an investment bond to maturity then you will be paid the full face value of the bond. That said, planning to hold a bond to maturity still doesn’t guarantee a return. In fact, interest rate fluctuations, especially a fall, can still impact your bond investments.

For example, if interest rates fall significantly, as they certainly have over the past year, bond issuers may opt to exercise their right to call in their bonds even before maturity. In our next post, we’ll explore why this happens and how exposed you are to the risk of having a bond called in early by an issuer.