Struggling With Your Social Security Check? One Little-Known Rule Could Put Much Larger Benefits in Your Pocket

Claiming Social Security as soon as you’re eligible can be incredibly tempting. You can start collecting benefits as early as age 62, and the thought of doing so can be appealing.

The problem is that filing early permanently reduces your monthly benefit in most cases. If your full retirement age is 67, claiming Social Security at 62 cuts your monthly benefit by 30%.

Many retirees make that choice because they need the income or simply want to enjoy their benefits sooner. But if you claim benefits early, once those smaller checks start arriving, you may discover that covering everyday expenses is more difficult than expected.

It’s hard to get by on smaller Social Security checks

It’s easy to assume that you can get by with smaller Social Security benefits. But as living costs continue to rise, a reduced monthly check could become increasingly painful.

Also, Social Security benefits are eligible for annual cost-of-living adjustments (COLAs). But COLAs are calculated as a percentage of your existing benefit. If your monthly check is already smaller because you claimed early, each annual increase will also be smaller in dollar terms than it would have been with a larger benefit.

For example, a 3% COLA adds much more money to a $2,500 monthly benefit than it does to a $1,750 benefit. Over many years of retirement, those differences can add up, making it even harder to maintain your purchasing power.

One little-known rule could help you boost your benefits

If you claimed Social Security early, you may be regretting your decision. But what you may not realize is that you’re not necessarily stuck with a smaller monthly benefit for life.

If you’ve been receiving Social Security for under 12 months, you can exercise a do-over. All you need to do is withdraw your application and repay every dollar you’ve already received to effectively erase your original filing. Once you do that, you can claim Social Security at a later age, thereby locking in larger monthly checks.

Of course, there are some caveats. This option is only available once in your lifetime. And repaying multiple months of Social Security benefits isn’t easy. But if you’re regretting an early claim and wish you would’ve waited, you may still be able to lock in larger monthly checks.

Another thing to keep in mind is that even if you’re able to repay the Social Security benefits you already received, you’ll need to replace that income if your intent is to undo your claim and wait a few more years to file for benefits again. That may require you to work at least part-time or make other sacrifices. But if you’re willing to do that, the do-over rule could provide a valuable second chance to set yourself up with larger benefits.

Think carefully before locking in a permanent reduction

Claiming Social Security early isn’t necessarily a mistake. If you have health concerns or need the income right away for a specific reason, it may still be the right decision. But if you’ve recently claimed Social Security and are already worried that your monthly checks aren’t enough, it’s worth knowing that you may have one opportunity to reverse course.

The do-over option isn’t available forever, though. So if you’ve claimed Social Security within the past year and are having second thoughts, it’s important to read up on the rules so you can exercise it sooner rather than later.

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