Deciding the ideal time to claim Social Security benefits may seem easy, but it can be nerve-wracking, especially since it’s permanent. If you file for your claim at age 62, your monthly benefits would be 72% lower than if you wait until age 70, and it’s extremely difficult to reverse course once you go all in.
But it’s not entirely impossible. There are certain scenarios where you can get the opportunity for a do-over. Here are the four ways to undo your decision and file later to get a much more significant Social Security benefit.
1. Withdraw Your Application
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Once your application is successfully canceled, you can then reapply some other time in the future.
Note that you are only allowed one more withdrawal in your lifetime if you cancel your application. Once you file again for your benefits, you won’t be able to make any cancellations.
Additionally, it’s not easy for most people to pay back a year’s worth of Social Security benefits. So if you’re planning to file for Social Security to get cash for a short-term issue and then withdraw your application later on, then you should think carefully because you may just be stuck with it.
2. Suspend Your Benefits
If you attain full retirement age (FRA), which could be 66 or 67, depending on when you were born and is the age when you qualify for primary Social Security amount, you can still suspend filing for your claims. Doing so would allow you to accrue 8% delayed retirement credits each year until you hit age 70. You can file for your benefits anytime you want within this period or hold out until your 70th birthday. If you still haven’t filed by then, the Social Security administration would automatically restart your benefit.
3. Return to Work
You can file for Social Security benefits even if you’re still working at age 62, but that will significantly reduce your monthly checks. If you start receiving your benefits while still working and before you reach full retirement age (FRA), Social Security will withhold $1 from your benefit for every $2 you earn above $18,960 from employment (in 2021). The year which you reach FRA, Social Security will withhold $1 in every $3 you earn above $50,520.
The good news is that the money withheld isn’t going anywhere. Once you reach the full retirement age (FRA), Social Security will increase your benefit amount to account for the money withheld. So if you want to go back to work when already receiving your benefits, you can do that knowing that the money withheld will eventually be returned to you.
4. Switch To Spousal Benefit
It’s possible to get a higher benefit by switching to the spousal benefit. Typically, this option is only open to individuals whose spouse has not started collecting their benefits yet, and you have to make the switch when your spouse files.
Also, suppose you were born before January 2, 1954, eligible for disability or caring for a disabled child under 16. In that case, you can file for Social Security spouse benefits using your records and get a higher amount of benefits.
With spousal benefit, you can earn up to 50% of your spouse’s primary retirement amount, but only if you’ve reached full retirement age (FRA). You won’t earn any delayed retirement credit by waiting past the FRA. You won’t also receive 50% of any delayed benefit credit your spouse earned. Since 50% is the maximum number, the spousal benefit is only a good option if your spouse earned significantly higher than you.