Claiming Social Security early can have lifelong financial consequences. Starting benefits before a set full retirement age (FRA) leads to early filing penalties and up to a 30% reduction in the amount you receive each month. And even if you wait until FRA, you’ll be foregoing potential retirement credits unless you delay it until age 70 so you don’t maximize your monthly benefit.
If you started your checkups early and realize later that you would rather have had a greater benefit, you don’t necessarily have to live with these lifetime regrets. In some cases, you can even undo your early claim and get a takeover. Here’s how.
Some – but not all – retirees can withdraw their early Social Security entitlements
If you regret claiming Social Security, it is possible to withdraw the claim. You can do this by submitting the SSA-521 Social Security Form, which is a request to withdraw the original claim for benefits. You must provide a reason for withdrawing your claim on the form, as well as details of the type of benefit claim you are withdrawing.
After you withdraw your claim, everything resets and it’s like you never started using the benefits earlier than planned. You can go ahead and start your checks at any time in the future. Any early filing fines that you might have incurred because of your first claim will be wiped out and will no longer reduce your monthly checks. If you have waited until your full retirement age, you can receive your standard benefit. And if you decide to wait even longer, you can increase the amount of your check to 70.
While it may seem appealing to waive an early benefit claim, there are some major caveats to keep in mind. You have this option nothing but if you applied for benefits for the first time within a year of your request for withdrawal. If you have received your checks for more than a year, the ship has sailed on this option and withdrawing your claim is no longer an option.
However, there is an even bigger obstacle for many retirees. In order to withdraw your claim and turn back the clock when it comes to benefits, you must repay all the money Social Security has paid you to date, as well as any benefits paid out on your work record, such as spouse benefits to your man or woman.
Paying back months-long benefits can cost thousands of dollars, but it can still be worth it if you don’t really need your early Social Security checks and you want more monthly income later — or if you’re hoping to increase your chances of earning the most. lifelong benefits possible.
However, you should keep in mind that you can only switch once during your lifetime. So once you start your payout early and cancel your claim, you’ll have used up one bite of the apple and need to be absolutely sure that you’re happy with your claim choice the next time you do it.
And if you’ve already withdrawn a claim, you should look into other options to try and get back some of the benefits you lost from starting your checks too early.
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