Too-Early Retirees: Can You Unclaim Social Security?

Claiming Social Security early can have lifelong financial consequences. Starting benefits prior to a designated full retirement age (FRA) will lead to early filing penalties and up to a 30% reduction in the amount you receive each month. And even if you wait until FRA, you’ll forgo potential retirement credits unless you delay until 70 so you won’t maximize your monthly benefit.

If you’ve started your checks early and later realize that you would have rather had a larger benefit, you don’t necessarily have to live with this regret for life. In some cases, you can actually undo your early claim and get a do-over. Here’s how.

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Some — but not all — retirees can rescind their early Social Security claim

If you regret claiming Social Security, it’s possible to rescind the claim. You can do this by submitting Social Security Form SSA-521, which is a request to withdraw the initial benefits request. You’ll need to provide a reason for withdrawing your claim on the form, as well as provide details about the type of benefit claim you’re rescinding.

Once you’ve withdrawn your claim, everything is reset, and it’s as if you never started benefits ahead of schedule in the first place. You can go ahead and start your checks at any point that you want in the future. Any early-filing penalties you would have been subject to due to your initial claim are wiped away and no longer reduce your monthly checks. If you’ve waited until your full retirement age, you can get your standard benefit. And if you decide to wait even longer, you can increase the amount of your check until 70.

While being able to undo an early benefits claim may seem attractive, though, there’s some big caveats to be aware of. You have this option only if you first filed for benefits within a year of requesting the withdrawal. Once you’ve received your checks for longer than a year, the ship has sailed on this option, and withdrawing your claim isn’t an option anymore.

There’s an even bigger obstacle for many retirees, though. In order to withdraw your claim and reset the clock when it comes to benefits, you’re going to have to pay back all of the money Social Security paid to you so far, as well as any of the benefits paid out on your work record, such as spousal benefits to your husband or wife.

Repaying months’ worth of benefits can cost thousands of dollars, but it may still be worth it if you can don’t actually need your early Social Security checks and you want more monthly income later — or if you are hoping to maximize your chances of earning the most lifetime benefits possible.

You do need to be aware, though, that you’re only allowed one do-over during your lifetime. So, once you start your benefits early and undo your claim, you’ll have used up your one bite at the apple, and you’ll need to be absolutely certain that you’re happy with your claiming choice the next time you make it.

And if you’ve already rescinded a claim, you’ll have to look into other options to try to recover some of the benefits you’ve lost due to starting your checks too soon.

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