Once you claim Social Security benefits, you are generally stuck with the choice you made. While you have some limited options, such as rescinding your claim within the first year and paying back all income received, most people cannot undo their benefits claim.
Unfortunately, there are times when this becomes a problem. That can happen if you realize after the fact that you claimed benefits sooner than you should have.
You don't want this to happen to you, so it's important to watch for the signs that you might regret your claim. Here are three of them.
1. You don't know your full retirement age
Before claiming Social Security, there is a crucial number to know. It's you full retirement age, or FRA for short. That's the age the Social Security Administration designated when you can first receive your standard benefit. Depending on when you were born, those who are at or approaching their full retirement age have an FRA between 66 and four months and age 67.
If you start your checks at exactly your FRA, you receive a benefit based on a percentage of average wages during your career. But if you claim early, benefits go down a small amount for each month you get a check before FRA. And if you claim late, they go up a small amount for each month of delay, up until 70.
These increases and decreases add up to an 8% annual benefits increase if you wait after FRA to start benefits or up to a 6.7% reduction for each of the first three full years benefits begin before FRA and an additional 5% reduction for each prior year.
Getting smaller checks, or waiting to get larger ones, can profoundly affect your income and how you support yourself as a retiree. That's why it's crucial you know what your full retirement age is relative to when you're thinking about claiming benefits so you can estimate how much money Social Security will provide and decide whether or not to wait.
2. You haven't worked for 35 years
Knowing FRA is important before claiming benefits since you don't want to inadvertently shrink your retirement income without realizing it. But that's not the only way you could end up with a smaller-than-anticipated benefit. Your work history also matters.
Specifically, if you work for fewer than 35 years, you could find yourself with a reduction in your Social Security income. That happens because, when the Social Security Administration calculates your benefits based on average wages, it takes your 35 highest-earning years into account. If you've only worked for 34 years, a $0 wage year will be included in the average wage used to set benefits.
The bigger the gap between the number of years you've actually worked and the 35 years included in your benefits formula, the more years of $0 wages will be included and the more your benefits will shrink. So if you haven't yet worked that long, you may regret claiming Social Security until you do.
3. You haven't coordinated with your spouse
Finally, you could be left with regrets if you don't work with your spouse on a claiming strategy that makes sense for both of you. That's because your own decision to start your checks could affect both spousal and survivor benefits.
There are dozens of different ways a married couple could decide to claim Social Security. For example, a lower earner could start checks first, enabling the higher earner to wait. This would maximize the larger retirement benefit and increase survivor benefits. But, it would also mean spousal benefits wouldn't be available right away since they can only be claimed after the primary earner starts their own checks.
It's important to look at all of the different strategies on the table -- even if that means getting professional advice -- so you aren't left wishing you'd made a different decision.
Since Social Security is such an important income source, you definitely don't want to be left with regrets about when you chose to start benefit checks.