Critter Corner: What If I Claimed Social Security Too Early?

Dear Magic,

In June of 2010, when I was 62 years old, I decided to quit working and take Social Security. I was afraid Social Security might go away before my full retirement age, or that I might die before that time, so I went ahead and locked in at the lower benefit. I also knew that I would always have the option at age 70 to pay back all the benefits that I received and start taking the higher benefit available at that time if Social Security was still around. Now that I am approaching age 70, I understand that the law was changed and I no longer have the option to pay back my benefits and receive the higher amount. Is this correct? Is there no longer any way to reverse my decision?

Clay M. Tuerlly

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Dear Clay,

You are correct. You and many other Social Security claimants were caught in this unfortunate situation when the Social Security administration suddenly changed their regulations in December 2010 to prohibit the repayment strategy you mentioned above.

Under the policy in place prior to December 2010, claimants who had begun receiving benefits could, at any time, pay back all the benefits they had received and essentially wipe clean their benefit history. By resetting their benefit record this way, people who took reduced retirement benefits early would be able to file later for much higher monthly payments. For people born between 1943 and 1954, for example, retirement benefits at age 70 are 76% higher than those taken at age 62.

Here’s what the Social Security Administration said at the time it changed its rules on withdrawing benefits:

“The agency is changing its withdrawal policy because recent media articles have promoted the use of the current policy as a means for retired beneficiaries to acquire an ‘interest-free loan.’ However, this ‘free loan’ costs the Social Security Trust Fund the use of money during the period the beneficiary is receiving benefits with the intent of later withdrawing the application and the interest earned on these funds. The processing of these withdrawal applications is also a poor use of the agency’s limited administrative resources in a time of fiscal austerity—resources that could be better used to serve the millions of Americans who need Social Security’s services.”

So, unfortunately for you and others in your situation, you no longer have any ability to reverse your decision and get higher benefits.

Are there any other options?

According to a 2017 survey from Fidelity, 28% of Americans opt to receive Social Security benefits as early as possible.

As most people are aware, you can sign up for Social Security at any time after age 62. However, your monthly payments are significantly higher for each month you delay claiming them up until age 70. Fortunately, many people still have some options.

Options if You Claimed Social Security Too Early

Generally, there are a couple strategies you can employ if you want to reverse your decision to file for Social Security benefits. Here are your options:

• Withdraw the benefits claim if it’s been less than a year. To do so, all you have to do is submit in writing that you’d like to withdraw your claim for your benefits. Then, you can go back to not receiving your Social Security and wait until a later period when your payments will be higher. If you decide to do this, however, you’ll have to pay back all of the money you received from Social Security, including any payments a spouse or child may have received. That may not be too hard if it’s just been a month or so, and you aren’t on a fixed income. If it’s been several months or more, and money is already tight, then it may be more difficult.
• If you aren’t at full retirement age, start working again. If you aren’t yet at your full retirement age, you could work while you receive your Social Security benefits and see higher earnings later.

Don’t Beat Yourself Up

If you claimed retirement benefits too early, don’t beat yourself up. Filing for Social Security can be complicated for anyone. Before making any further decisions, be sure to educate yourself. Below are tools related to Social Security and retirement planning, that can provide more details: