The 12-Month Rewind Option: How to Reset Your Social Security Claiming Decision
Filing for Social Security at the wrong age can shrink your monthly checks for decades, but a little-known federal rule gives you a narrow window to erase your claim entirely and start over.
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Sometimes in life, we make financial decisions we regret.
You may bemoan your decision to buy an expensive car in your 20s when you realize it’s hard to keep up with the payments on an entry-level salary. And you might regret taking on too much house in your 30s when your mortgage payments monopolize your income, making it next to impossible to save consistently for retirement.
When it comes to Social Security, there’s plenty of opportunity to regret your claiming decision. But if you file for benefits at the wrong time and reduce them in the process, you’re not necessarily stuck with smaller checks for life.
Thanks to Social Security’s do-over option, you may have a chance to file for benefits again at a later age and score larger monthly checks in the process. But it’s important to understand how this option works, and to act quickly if you file for Social Security early and regret your decision.
How to undo your Social Security claim
The earliest age to sign up for Social Security is 62. Meanwhile, you’re eligible for your monthly benefits without a reduction at full retirement age (FRA), which is 67 for anyone born in 1960 or later.
If you claim Social Security at 62 with an FRA of 67, you’ll face a 30% reduction in your monthly checks. A $2,000 benefit, for example, will be whittled down to $1,400.
Over time, smaller checks could make it harder to keep up with your retirement expenses. Plus, if you reduce your Social Security benefits by claiming them early, each time there’s a cost-of-living adjustment, you’ll get a smaller dollar boost.
If you claim Social Security ahead of FRA and regret it later, you may be able to reverse that decision. But that’s only if you act quickly.
You have 12 months from when your Social Security claim is approved to withdraw your application for benefits and repay all of the money the Social Security Administration paid you. If you do that, your claim will be erased. You’ll have a chance to file for Social Security at a later point in time, thereby leading to larger benefits.
But repaying up to 12 months of Social Security benefits isn’t easy. And if you don’t know that the do-over option exists, it may not be feasible to send all of that money back. That’s why it’s so important to know about this rule.
Should you undo your claim?
Filing for Social Security early isn’t always a bad decision. You may not love getting smaller monthly checks. But if your health starts to fail once Social Security begins, making it less likely that you’ll live a long life, an early claim could work out well for you financially.
Let’s say you claim Social Security at 62 instead of 67, reducing a $2,000 benefit to $1,400. If you only live until age 72, you’ll end up with more Social Security on a lifetime basis by claiming benefits at 62 versus 72.
All told, the option to undo a Social Security claim could be a huge help to you if you wind up regretting your filing age. But it’s not an easy option to exercise. Your best bet, therefore, is to file at the right time to begin with. That means considering your health, longevity, and income needs before submitting your benefits application.
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Maurie Backman has more than a decade of experience writing about financial topics, including retirement, investing, Social Security, and real estate. Her work has appeared on sites that include The Motley Fool, USA Today, U.S. News & World Report, The Washington Post, and Kiplinger.
Prior to becoming a full-time financial writer, Maurie worked in the financial industry trading distressed debt. She then changed course and spent a few years designing electronic toys. After a stint in content marketing and UX, she shifted back into writing and has since covered everything from the housing market to estate planning to Medicare.
When she's not busy writing, Maurie can be found hiking, walking her dogs, driving her kids to their various sports practices and games, and curling up with a good book. She cooks on occasion and bakes way too often.
