Choosing the right Social Security claiming age is crucial to maximizing your lifetime benefits. Wait too long, and you could miss out on Social Security altogether. Sign up too early, and you could cost yourself tens or even hundreds of thousands of dollars over your lifetime.
It's pretty easy to sign up for benefits initially, but once you've done so, it's much tougher to deal with the consequences of a premature Social Security application. But you may not be out of luck. There are a few things you can try to correct your mistake and boost your future checks.
What's the best age for you to claim Social Security?
First things first, you need to determine the right time for you to begin collecting Social Security in order to decide if you signed up too early. There's technically no “best” age — it all depends on your birth year, your life expectancy, and your finances.
The Social Security Administration assigns everyone a full retirement age (FRA) based on their birth year. It's anywhere from 66 to 67 for today's workers. You must wait until this age to claim if you want the full monthly benefit you've earned based on your work history. Signing up early shrinks your checks, while signing up later increases them.
If you have plenty of personal savings to help with your bills, it's often best to delay benefits unless you have a terminal illness or another reason to believe you won't live long. In that case, you should sign up right away at 62 so you can claim benefits for as long as possible before you die.
Those who think they'll live into their 80s or beyond often get larger lifetime benefits by waiting to sign up for Social Security. Some even choose to delay until 70, when they qualify for their maximum monthly benefit.
What if I sign up for Social Security too early?
If you signed up for Social Security early and now regret the decision, you might be able to withdraw your application as long as it's been less than 12 months since you applied. But there are a few catches.
First, you must pay back all the money you and your family members have received from Social Security thus far. This includes spousal benefits and benefits for dependent children, if you have any. That means you need your family's written permission to proceed with the application withdrawal.
The other catch is that this is a one-time deal. If you withdraw your Social Security application, then the next time you claim, it's final. You can't change your mind again.
Should you decide to proceed with the application withdrawal, just fill out Form SSA-521 and submit it to your local Social Security office. Once this is done, the Social Security Administration will treat you as if you'd never applied for benefits.
What if I'm too late to withdraw my Social Security application?
You cannot withdraw your application if it's been more than a year since you began claiming Social Security, or if you're unable to refund all the benefits you've received thus far. But if you've reached your FRA, you can ask the Social Security Administration to suspend your benefits.
Once you do this, you'll stop receiving checks until you either turn 70 or request the Social Security Administration start sending them to you again. In the meantime, you'll accumulate delayed retirement credits. When you start receiving benefits again, your future checks will be larger than before, but they won't be as big as they would've been if you'd delayed your Social Security application until 70 in the first place.
Benefit suspension doesn't require you to pay back any of the money you or your family members have already received from Social Security. That said, it's still a good idea to talk the move over with anyone else claiming on your work record. Once you suspend benefits, they'll stop receiving checks too.
To request benefit suspension, contact your local Social Security office by phone, in person, or in writing. Suspension begins the month after the month in which you make the suspension request. So if you request the government suspends your checks in August, it will do so beginning in September.
It's a few extra hoops to jump through, but it could make a lasting difference to your Social Security checks. If you don't need your benefit today and want to squeeze the most out of the program, consider trying one of the two options above.
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