Claiming Social Security is one of the most important financial decisions you might make. Once you file for benefits, your check amount is generally locked in for life, aside from cost-of-living adjustments increasing those payments over time.
The earliest age you can sign up for Social Security is 62. But you won’t get your benefits without a reduction unless you wait for full retirement age to arrive. That age is 67 for people bornin 1960 or later.
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There’s also the option to delay Social Security past full retirement age for more generous monthly checks. Each year you wait boosts your benefits 8%, and you get credit for waiting until you turn 70.
It can be tempting to claim Social Security early to get that money immediately. But once you see how small your benefits are, you might regret that decision.
The good news is that a little-known provision built into Social Security essentially gives you a do-over in a situation like that. But you’ll need to act quickly to take advantage of it, and there are some strings attached.
How to undo your Social Security claim
If you start collecting Social Security and regret locking in smaller benefits than what you could’ve had by waiting, you’re not automatically out of luck. Many people don’t know about Social Security’s do-over provision. But it exists, and all beneficiaries are entitled to it once in their lifetime.
What the do-over rule allows you to do is withdraw your application for benefits and repay all of the money you received in Social Security. If you so that, you’ll be able to claim Social Security at a later date — and potentially score much higher benefits in the process.
Withdrawing your benefits application is the easy part, though. It’s repaying those benefits that’s a lot trickier.
It may be that by the time you realize you want to undo your filing, you’ve spent a lot of the money Social Security paid you. At that point, your options may be limited unless you have savings you can dip into.
It pays to file strategically from the start
It’s important to know about Social Security’s do-over provision in case you need to exercise it. But it’s also not an easy thing to pull off given the requirement to repay the benefits you’ve received to date.
Now that you know about this strategy, you can keep it in your back pocket. But a better bet is to try to get your filing decision right in the first place. Doing so could save you the hassle of having to undo your claim — and the stress of realizing that the do-over option isn’t possible for you because you don’t have a way to pay back the benefits you’ve already spent.
