Many seniors rush to claim Social Security early because they can. After all, it’s tempting to get your hands on money as soon as it becomes available to you.
You are entitled to your full Social Security benefits based on your personal pay history once you reach full retirement age (FRA). FRA starts at 66, 67 or somewhere in between, depending on what year you were born.
But you can register for social security from the age of 62. And while this means accepting a lower monthly benefit for life, many seniors are willing to give up a higher payday to get their money immediately.
However, the difference between applying for Social Security at 62 versus FRA can be huge. And even if you’re only applying for benefits a few years early, you’ll still see a significant reduction.
If you applied for benefits early, you may now realize what a mistake it was. After all, retirement can be expensive when you consider your various costs, from housing to healthcare to food. And while you may also have savings to use, you don’t want to spend your nest egg too soon because that money should last for many years.
But don’t worry if you applied for Social Security early and are now locked into a benefit that’s lower than you’d like. You can still do your part to increase your benefit. But you have to act quickly.
Is it time for a resit?
It’s a little-known fact that every Social Security applicant is once in a lifetime when it comes to claiming benefits. If you applied for Social Security early and now regret it, you can undo your application by doing two things:
- Withdraw your benefit application
- Repay all the money in benefits you have received so far
However, keep in mind that you only have a 12 month period from your first filing to enable that switch. So if you’re approaching the one-year mark, don’t wait any longer.
Of course, you may need to make lifestyle changes if you want the option to defer Social Security and bide things for a higher monthly benefit. That might involve going back to work in some way (possibly even full-time) or making adjustments to your expenses, such as downsizing your home. But those sacrifices can be worth it if it means getting more money from Social Security each month during retirement.
Remember, the money you have in your IRA or 401(k) isn’t guaranteed to last your entire senior years. Social Security, on the other hand, is set up to pay you a monthly benefit for the rest of your life. If you want a greater advantage than what you’ve secured, take advantage of that acquisition, wait a few more years, and get ready for a more generous salary that will make your ongoing retirement costs much easier to manage.