Claiming early shrinks your monthly benefit, but the Social Security Administration gives you a way to grow your checks after you’ve signed up.
Claiming Social Security early gets you more checks from the program, but it often results in reducing the total benefits you collect over your lifetime. Applying as soon as possible at 62 can shrink your monthly check by up to 30% (compared to what you’re eligible for at full retirement age).
Not everyone realizes this before they sign up, and that can lead to major regret. There are ways to undo an early claim, but they have their drawbacks too. Here’s what you need to know.
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If you change your mind within the first year of claiming
The Social Security Administration gives you a one-time do-over if you change your mind about claiming Social Security benefits within 12 months of signing up. You must contact the Social Security Administration and request that it withdraw your application. Then, you must also pay back any benefits you or other family members claiming on your record have received from the program thus far.
If you’re able to do this, the government will treat it as though you never applied for benefits. When you sign up later, your checks will be larger, and this could increase your lifetime Social Security benefit.
But for most people, paying back all the benefits they’ve already received and likely spent isn’t possible. Even if you can do this, it’s not an option after you’ve been on Social Security for over a year. That said, there’s still another way early claimers who regret their choice can boost their checks.
If you change your mind after a year
Even if you’ve been receiving Social Security checks for several years, you can suspend your benefit starting at full retirement age (FRA). By doing so, the government stops sending you checks until you request them again, or you reach 70 (the age when people qualify for their maximum Social Security benefit).
You add two-thirds of 1% to your benefit for each month you suspend them. This adds up to 8% per year. Those with a FRA of 67 could add up to 24% to their checks by delaying until 70. Meanwhile, those who most recently hit their FRA as of this writing have the opportunity to grow their benefit 28% by suspending until 70.
Let’s say you qualify for a $2,000 monthly benefit at your FRA of 67. But you claimed Social Security at 62, which shrunk your checks to $1,400 per month. For five years, you receive that amount, but at 67, you suspend benefits.
Assuming you patiently wait for the next three years, your benefits will grow 8% per year, so when you resume your benefits at 70, you’ll then get $1,736 monthly ($336 more per check).
It’s still not as much as you could have gotten if you’d never claimed Social Security in the first place, but it’s an improvement that could increase your lifetime benefit by thousands of dollars.
The trade-off
The obvious downside to both of these strategies is the need to cover your expenses on your own during the years you’re not claiming Social Security. You might be able to pull this off if you have a lot of personal savings, or you’re still working a job that provides steady income. But it’s not feasible for everyone.
If you cannot afford to withdraw your claim or go without benefits for years, consider delaying just a few months to grow your checks as much as you can. Or you could settle for the benefit you have right now. Your checks might not be as large as you’d hoped, but they’ll still grow over time through cost-of-living adjustments (COLAs).