Key Points
You become eligible to claim Social Security at 62, and many people claim their benefits at that age. However, it’s an early claim, and it results in a reduction of monthly benefits.
In some cases, you may decide that you regret your early claim. That may happen if you start worrying about running out of money later in retirement, if you realize you should have coordinated with a spouse, or if you simply think twice and realize you wish you hadn’t reduced your benefit.
So, what happens if you claimed Social Security early and you regret it? What options are available to you? The answer depends on your age, financial ability, and willingness to work — but you do have some choices. Here’s what they are.
1. You could rescind your claim
If it’s been less than 12 months since you started your benefits, you have the option to rescind the claim that you made. You can do this by downloading and completing Form 521: Request for Withdrawal of Application and mailing it to your local Social Security office, or you can visit the office to rescind your claim.
This is the cleanest approach, because it is as if your Social Security claim never happened. The downside, however, is that you must pay back all of the benefits you received to date. If your family received any benefits on your work record, they have to pay them back too.
This may not be affordable for everyone, but it’s worth exploring as an option if you can.
2. You can suspend your benefits
If you have already reached full retirement age (FRA), you can suspend your benefit payment. You can keep it suspended until age 70, which would allow you to earn delayed retirement credits that maximize this source of inflation-adjusted lifetime income.
When you suspend your benefits, anyone who was receiving benefits on your work history will also have their payments paused. This is better than having to pay back payments already collected. But it still means that your spouse or children, who may have been collecting benefits on your work history, will have to pause.
3. You can work and forfeit benefits
The last option works if you are under FRA. The Retirement Earnings Test limits how much you can make from work after collecting Social Security. If you earn more than the allowed amount, you temporarily forfeit benefits. You’re later credited back the early filing penalty for any months you didn’t get a benefit check.
For example, the earnings limit is $24,480 if you won’t reach FRA all year, and you lose $1 for every $2 you make above that amount. If you earn $72,480, you’d lose every dollar of your Social Security for the year, assuming your monthly benefit was $2,000 per month.
When you miss a month of benefits because of working, you get credited back the early filing penalty that would have otherwise applied. If you can consistently work, when you reach FRA, your benefits will be recalculated to eliminate most of the penalties that had reduced them previously.
It’s worth exploring these options if you retire, claim Social Security, and then wish you had made a different choice. One of them may work for you and get you back on track with your retirement plans.
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