Dear Raider,
I messed up and took my Social Security benefits too early. I realize my costly mistake and am wondering if there is such a thing as a mulligan or a “do-over” when it comes to Social Security benefits, and what my options would be?
Thanks for your help,
Mulla Ginn
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Dear Mulla,
You might be in luck, your situation. There are at least two circumstances where you can get a chance at a “do-over” when it comes to Social Security. And, if you do decide to change your benefits, you could end up with substantially more money each month!
The two strategies that can help you get a do-over are detailed below, but you can only use them in certain situations, as I will describe.
Suspend Your Social Security Benefit
You can suspend your Social Security benefit if you meet both of the following two conditions:
- You took benefits before full retirement age.
- You have reached full retirement age but not yet 70 years old.
If those conditions apply, you can suspend your benefits and earn delayed retirement credits for each month that they’re suspended. For each month between full retirement age and age 70, your benefit increases by 0.666%, or an 8% annual rate. That’s on top of any cost-of-living adjustment (COLA) increase. So, you may be able to improve your payout by suspending and restarting your benefits. You can restart at any time and take what the new payout amount will be. When you reach age 70, your benefits will automatically restart at the then-current payout amount.
Note that to suspend your benefit, you do not need to repay any payout you’ve already taken. While suspending your benefit affects those claiming benefits on your record such as a spouse or minor child, it won’t affect an ex-spouse claiming benefits on your record, if that situation applies to you.
Withdraw your Social Security Benefit
You can withdraw your Social Security benefit if you meet the following conditions:
- You started receiving benefits less than 12 months ago.
- You have not filed for a withdrawal of benefits before.
If those conditions apply, you may withdraw your benefit and it will be as if you had never filed for Social Security. You may then refile for benefits at a later date. Your potential benefit will increase up to 8% annually once you hit full retirement age.
Unlike the first option, you can withdraw your benefits at any age as long as you meet the conditions stated above. If you withdraw your benefits, you’ll have to repay any money you’ve already received, including any Social Security payouts as well as payments the program made for you such as for Medicare, taxes, and payments made to a spouse or children on your account.
To withdraw your benefits, you must make the request in writing. After Social Security has approved the application, you have up to 60 days to reverse the decision to file.
As you can see, in some circumstances it can make a lot of sense to take a “do-over” on your Social Security. It will enable you to secure a higher monthly benefit and perhaps a higher lifetime benefit, too.
Hope this is helpful!
Raider
About Renee Eder
