You Can Undo an Early Social Security Claim, But Only Within 12 Months, and You Have to Repay Every Dollar

For many older Americans, there’s a tough decision to make starting at age 62 — figuring out when to sign up to start getting Social Security benefits.

Age 62 is the soonest you can file for Social Security, but if you want your monthly benefits without a reduction, you’ll have to wait for full retirement age (FRA) to arrive. That age is 67 for anyone born in 1960 or later.

You can also boost your Social Security checks by delaying your claim beyond FRA. Each year you wait, until age 70, results in an 8% boost. If you have an FRA of 67, you have the opportunity to increase your Social Security benefits by 24%.

Many seniors end up signing up for Social Security at 62 because they want the money right away. If you end up filing early — meaning, ahead of FRA — you may end up regretting your decision once you realize how difficult it can be to cover your expenses on a reduced monthly benefit.

The good news is that you may not be stuck with smaller benefits for life in that situation. But it’s important to understand how to avoid that fate.

Understanding Social Security’s do-over rule

One less-publicized Social Security rule is all that claimants get a single do-over in their lifetime. If you file for Social Security at a time you end up being unhappy with, you can potentially take advantage of this option and then sign up for benefits at a later point in time. This allows you to lock in larger monthly checks.

But to pull off a do-over, you must do two things:

• Withdraw your application for Social Security benefits within a year of filing
• Repay all of the money in benefits you received from Social Security within that same timeframe

The latter is where seniors can run into trouble. Withdrawing a Social Security benefit application is easy. Coming up with the money to repay up to a year’s worth of benefits is not. If you’ve already spent your Social Security checks, repaying the money may be the thing that prevents you from exercising your do-over.

Get your claiming decision right in the first place

Since Social Security’s do-over option is hard to take advantage of, a better solution is to try to get your claiming decision right from the start. And there are different factors that should go into that decision.

Before you file, ask yourself:

• How reliant will I be on Social Security for retirement income?
• Can I increase any income streams outside of Social Security?
• What’s my health like, and how long do I expect to live?
• Am I able to keep working, or is my time in the workforce going to have to come to an end?
• Do I want to lock in larger benefits in case my spouse outlives me and needs survivor benefits?

Running through this list of questions could help you file for Social Security at a time that’s optimal for you. That could still mean filing ahead of FRA. But if you end up happy with your decision, you may not have to worry about pulling off a do-over.

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