Millions of Americans rely on Social Security as a core element of their retirement income.
But while some begin collecting as soon as they are eligible, many later regret claiming early – particularly when they learn their decision results in permanently reduced monthly payments. How can you reverse the decision?
Donald Trump stumbles while boarding Air Force One, draws comparisons to Biden
In February 2024 alone, 67 million individuals received benefits, according to the Center on Budget and Policy Priorities, proving just how essential Social Security is when it comes to supporting the United States population.
Fortunately, options exist for those second – guessing their choice. Whether within the first year of receiving benefits or already at full retirement age, retirees have specific strategies available to either reverse or mitigate an early filing.
How can I cancel or reverse claiming early Social Security?
One of the most underutilized options for early filers is a full withdrawal of their application within 12 months of approval. This allows individuals to effectively erase their initial claim and reapply later for a larger benefit.
However, if benefits have already been received, including those withheld for Medicare premiums or related expenses, they must all be repaid in full which can be very costly.
The repayment must be made in a lump sum, which can be financially burdensome. Individuals should confirm they have enough liquidity before proceeding with this strategy.
A second method is available after reaching the age of full retirement (67),which is to suspend their benefits to earn delayed retirement credits. This leads to higher monthly payments once benefits resume.
Suspending payments does not require repaying previously received benefits. It also allows recipients to accrue the standard eight percent annual increase for each year payments are delayed, significantly enhancing long-term financial security.
And a third way is to simply continue working, which will help retirees boost their Social Security earnings record. Higher wages in later years can positively impact the benefit recalculation done at age 70.
Even for those who return to work before full retirement age, the SSA will withhold benefits if earnings exceed the annual threshold ($22,320 in 2025). However, these withheld benefits are not permanently lost.
Once full retirement age is reached, the SSA recalculates benefits to account for previous withholdings, resulting in a higher monthly payout moving forward.
Turn to a financial professional for help
For anyone considering withdrawal or suspension of benefits, expert advice is crucial. A trusted financial planner can help determine whether repaying early benefits or delaying future payments aligns with overall retirement goals.
“Working together, you can explore the financial impact of a withdrawal or suspension,” says Melissa Murphy Pavone, founder at Mindful Financial Partners. “And consider how these moves fit with your broader retirement goals.
“Working with a trusted financial planner can ensure you’re making the most of these options and strategically optimizing your Social Security to support a comfortable and secure retirement.”
So while claiming Social Security early might have seemed right at the time, there are still corrective steps that can help improve long-term outcomes.