Many people aim to file for Social Security at full retirement age, or FRA, since that's when they're entitled to their full monthly benefit without a reduction. FRA hinges on year of birth, as follows:
Year of Birth
Full Retirement Age
66 and 2 months
66 and 4 months
66 and 6 months
66 and 8 months
66 and 10 months
1960 or later
However, the Social Security Administration (SSA) allows seniors to claim benefits starting at age 62. If you go that route, you'll reduce your monthly benefit on a permanent basis but get your money sooner.
You may have every intention of claiming benefits at FRA, but what if life gets in the way? You may land in a situation where you lose your job or are forced to leave it before FRA kicks in. And if you don't have enough money in savings to pay your living expenses, then you may have no choice but to sign up for Social Security before FRA and lock in a lower monthly benefit for life.
In the course of the pandemic, a lot of older workers have had no choice but to leave the workforce. For some, it was a matter of getting laid off. For others, it was a matter of health concerns.
If you claimed Social Security due to being out of work but have found yourself employed once again, you may be wondering if there's any way to undo your filing. And the good news is — there is.
You can get a second chance
The SSA allows all filers one do-over in their lifetime. If you claimed Social Security early but no longer need to keep collecting those benefits, you can withdraw your application and also repay the SSA all of the money in benefits it paid you. Do so within a year of filing, and you'll get to start over again with a clean slate at a later age.
Now, say you lost your job earlier this year and claimed benefits early to stay afloat. If you've managed to find a new job that can cover your living costs, and you have the means to repay the benefits you already collected, then undoing your filing could make sense. That way, you'll have the option to hold off until FRA or even beyond and lock in a higher monthly benefit for your retirement.
While filing for Social Security at FRA will give you access to the full monthly benefit you're entitled to based on your earnings history, delaying your claim past FRA will leave you with an even higher monthly benefit for life. For each month you delay beyond FRA, your benefit increases by 2/3 of 1%, or 8% a year.
Once you turn 70, you can't grow your benefit any longer. But if you're able to wait until 70 to sign up, you'll enjoy a lot more Social Security income for the rest of your life.
Many people who claim Social Security early don't set out wanting to do that. Rather, they wind up forced to do that when life doesn't go their way.
If you signed up for benefits early because you lost your job or were forced to quit, but you've since managed to become gainfully employed, then it pays to see if undoing your filing is an option for you. Making that move could mean avoiding financial struggles during retirement.
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