Q: I claimed my Social Security retirement benefit at age 62 because I needed the money after losing my job. But I’m back at work now and wish I had delayed claiming so I could earn a bigger benefit later in life. Is there any way for a do-over?
A: Yes, there are two possibilities. You can withdraw your application or suspend benefits when you reach full retirement age. The right option for you will depend on when you first applied for benefits.
Claiming at 62 instead of your full retirement age (which is 66 for those born between 1943 and 1954 and gradually rises to 67 for those born in 1960 or later) reduces the amount of your check by 25% to 30%. For each year that you wait to apply after your full retirement age, up to age 70, you enjoy an 8% boost in delayed-retirement credits.
If you claimed benefits within the past 12 months, you can withdraw your application, pay back the benefits you’ve already received — including any benefits that a spouse or dependent claimed based on your record — and you’ll owe no interest or penalty. To request a withdrawal, fill out Form SSA-521 (available at www.ssa.gov/forms/ssa-521.pdf) and mail it to your local Social Security office.
When you apply for benefits again, you’ll get the amount due to you for your age at that time. Make sure that your decision is firm, because you can withdraw your application only once. If it’s too late to withdraw your application, or if you don’t want to return the benefits you’ve received, you have an alternative path to increase your future checks — although it’s not a complete do-over. Once you reach your full retirement age, you can ask Social Security to suspend your benefits until up to age 70. Your spouse or dependent will also stop receiving any benefits they were claiming on your record (an ex-spouse, however, may continue to receive benefits based on your record).
Your checks will still be reduced because you claimed before full retirement age, but you’ll get the 8% delayed-retirement credit for each year past full retirement age that you wait to start receiving benefits again. Keep in mind that if Medicare Part B premiums were being deducted from your Social Security check, Medicare will bill you after you suspend benefits.
Lisa Gerstner is a contributing editor at Kiplinger’s Personal Finance magazine. For more on this and similar money topics, visit Kiplinger.com.
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