Social Security Has an Undo Button. Here’s How to Use It
The most popular age to file for Social Security retirement benefits is, by far, 62. But filing as soon as you’re eligible isn’t always the best move.
If you filed early and you later decide you want to stop your Social Security payments, you may be in luck. There’s an undo button. And if the undo button doesn’t work for you, there’s a pause button that might.
Here’s how you can undo an early Social Security claim.
Act fast! Withdraw your application
If your circumstances change within 12 months of initially filing and you want to undo your Social Security application, you can cancel it and reapply again later.
If you decide to withdraw your application, you’ll have to repay all the benefits you and your family received since initially filing. That includes any money withheld from your Social Security checks to pay for Medicare premiums. So be sure you can pay back that cash before filing to withdraw.
If you have other family members receiving benefits based on you application, you’ll need written consent from them when you go to cancel your application.
Be aware, though, this is a one-time, break-in-case-of-emergency option. You can’t tap Social Security over and over again for free, short-term loans.
If you want to withdraw your application, you need to fill out form SSA-521 and mail it to your local Social Security office. If you decide you don’t want to withdraw your application after all, you have 60 days from approval to retract your request.
Hit the pause button
If you’re unable to withdraw your application and you’ve reached full retirement age (but are not yet 70), you can suspend your application. Suspending your application allows you to earn delayed retirement credits, increasing your benefits payment by 8% for each year they remain suspended.
It’s important to note that if you suspend your benefits, you cannot receive benefits on someone else’s record. Additionally, anyone receiving benefits on your record will see their benefits suspended. Your payments will automatically restart at age 70, but you can request to resume payments earlier.
To suspend Social Security, you can make the request via phone or mail. You can also walk into your local Social Security office to request the suspension. Payments will stop the month after your request.
Good reasons to hit the undo button
There are several cases where stopping Social Security payments can be advantageous.
The first case is if you find yourself working in retirement. If you retire early but start a side hustle, or find yourself going back to work, withdrawing your application can be advantageous.
Social Security starts withholding some benefits after your wages exceed a certain level. While you’ll receive those benefits eventually, working while collecting Social Security in your early 60s might not be as beneficial as fully delaying the benefits.
A second case may be if you filed for Social Security early in retirement to ensure you had enough money to afford your lifestyle. If the market provides good returns in the early years of your retirement, you might suspend your benefits, allow the delayed retirement credits to accrue, and increase your withdrawals from your portfolio. That strategy may also allow you to do some more tax planning than you would if you were still collecting Social Security.
Circumstances change throughout retirement. That’s why it’s important to remain flexible and plan to change your retirement plan. These two Social Security options may be extremely useful to add flexibility to your plans.
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