Applying for social security as soon as you qualify may seem smart when you become 62, and you are facing a cash-strapped pension. Why not start putting a monthly check from the government to use? After all, the money you have paid into the program is your entire working life.
The problem is that if you require benefits before reaching full retirement age (FRA), you will see a reduction in the benefits that apply to the controls you receive for the rest of your life. Depending on how early you claimed, your social security earnings could be up to 30% below what the amount could have been if you waited for the FRA. And the longer you are able to wait yourself past your FRA, the more delayed your retirement credits you will rack up, until the bonus maximizes out on 70. All of this is waiting to translate into bigger insurance schemes when you start claiming them. 1
1. You can withdraw your claim.
If it has been less than a year since you started claiming your social security benefits, it is not too late to simply press the reset button and undo your claim by entering a form SSA-521. If you do, it will be as if you never claimed it at all.
Unfortunately, it's a catch. You must repay the benefits you have already received to withdraw your claim. Depending on how long you've got benefits and how much you've already paid, this could mean you come up with thousands of dollars to return to the SSA.
Nevertheless, if you are able to find the money and you are within this year's limit, it is easiest to recover your ability to increase revenue by waiting for claims.
2. You can go back to work.
Another way to grab some of the benefits you've lost by claiming early is to return to the workforce.
If you haven't reached your FRA, you go back to work results in a performance reduction – assuming you earn some annual revenue. For 2019, the benefits of $ 1 are reduced for every $ 2 you earn over $ 17,640.
If you can make enough money, you can get the benefits reduced significantly – or potentially down to $ 0. You are credited for a reduction in benefits, so your social security benefits are getting bigger later.
Making extra money now can also give you more money for retirement savings, which will increase your retirement income from investment. Any turbocharging you can give your portfolio will help offset the benefit reduction from claiming social security early.
3. You can suspend your benefits.
If you have already reached your FRA and realize that you have claimed that you have claimed too early, you have the opportunity to suspend your benefits. If you do this, you can start earning late retirement credit – which you would never have claimed at all. Delayed pension credit can be earned up to 70 years. When you are 70, you are waiting for social security, your benefits will not increase anymore.
Unfortunately, many who claim to social security prematurely have not yet come to FRA, so this is not a choice for everyone. But if you are between FRA and 70 and you want to increase your benefits later on, there is an easy way to do that to suspend your claim.
You may ask the SSA to suspend your benefits suspended either orally or in writing. You can also contact SSA (Security Administration) by phone at 1-800-772-1213 or make the request personally at your local social security office, located here.
What rendition is right for you?
If it has been more than 12 months since you first claimed Social Security and you want to undo your claim, it might be your only option to try to work and reduce your benefits – unless you are over full retirement but under age 70.
Unfortunately, if you do not find work and cannot suspend your benefits or withdraw your claim, you really do not have other opportunities but to live with your lowered benefit. You can find ways to get the pension funds to stretch, but for example by moving to a state that will not tax your earnings.
Since it is difficult to reject a claim claim, make sure you understand exactly how Social Security works before you decide to claim. Then you will make the most informed choice for your financial future.