What happens if you want to stop social security and go back to work?
What happens if you want to stop social security and go back to work?

What happens if you want to stop social security and go back to work?

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Social benefits can be a great help to retirees, but it can also be confusing to know exactly when to claim them. This is especially true if you claim your benefits but then get a good job opportunity. Since social security benefits typically do not pay you more than you could earn with a real job, you may be wondering what your options are for stopping your social security without losing it. The good news is that the Social Security Administration offers such a provision, but only as a one-time scenario. How to take advantage of it.

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How To Stop Social Security If You Go Back To Work

You will need to file what is known as a “benefit withdrawal” if you want to suspend your Social Security payments and return to work. However, you can only do this if you have applied for your pension benefits within the previous 12 months. At that time, you must also repay everything you have earned so far from social security, and this includes all benefits paid to your spouse, children or other beneficiaries. At that time, the Social Security Administration will treat your application as if it never took place. Keep in mind that since other beneficiaries may be affected, the Social Security Administration requires that they also sign a consent form.

To withdraw your benefits, you must submit the SSA-521 form. At that point, you still have up to 60 days to reconsider and withdraw your application if you wish. Otherwise, your request will be processed and you will have to return the money you received.

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What if I’m too late to stop my social security?

If you missed your window to withdraw your social benefits – which means it’s at least 12 months since you started receiving benefits – you’re too late to stop social benefits. However, there is an alternative strategy you can use. When you reach full retirement age, which is 67 for most current workers, you can choose to suspend your retirement benefits. In this scenario, you are not responsible for repaying the benefits you have already earned. Instead, you will start earning overdue retirement credits. This means that when you resume collecting benefits, which you must do within 70 years, your monthly social security payments will be higher, by about 8% for each year you defer them.

If you work in the years you suspend payments, you may be able to enjoy the best of both worlds when it comes to your income. The money you earn from working these years is likely to be more than your Social Security payout would have been, and in the meantime, your Social Security benefit is growing by a significant amount each year with no effort from you.

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The bottom line

Social security was never intended to be an income compensation fund. If you have a good job opportunity or prefer to work into what most people consider retirement age, then you should. Your social security will not disappear and in fact, your ultimate payout will grow the longer you defer it, at least until 70 years. If you have already applied for social security benefits but intend to return to work, you should probably consult your financial adviser or tax adviser to help you implement the optimal social security strategy.

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