Social Security is an essential source of income for millions of seniors. It's also a program that's loaded with rules, so much so that you could conceivably spend hours upon hours reading up on how it works.
Now some of Social Security's rules are fairly well-known. A lot of people, for example, are aware that you can sign up for Social Security as early as age 62, albeit for a reduced benefit. And many people know that delaying Social Security past full retirement age (FRA) results in a higher monthly benefit.
But here are a few rules you may not have known about.
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1. You can undo your filing once in your lifetime
Claiming Social Security ahead of FRA is a decision some seniors wind up regretting -- namely, because it leaves them with a lower monthly benefit for life. But if you're upset about having taken benefits early, you may still have the option to lock in a higher monthly Social Security payday.
It's a lesser-known fact that Social Security allows all filers one do-over, so to speak. If you decide within a year that you regret your decision to claim benefits early, you can withdraw your application and pay back all of the money you received in benefits. From there, you'll be able to sign up for Social Security at a later age -- and lock in a more generous monthly benefit in the process.
2. If you're married, you can't claim a spousal benefit until your spouse files
Even if you never worked and therefore never paid into Social Security, you might still be eligible for a spousal benefit if you're married to someone who's eligible for Social Security. And your spousal benefit could be worth up to half of what your spouse is able to collect.
But if you're thinking you'll claim your spousal benefit before your spouse files for Social Security, think again. If you're divorced, you may be able to claim a spousal benefit before your ex claims their benefit. But if you're still married, you'll need to wait for your spouse to sign up to get your money. That's an important point to consider in the course of your joint retirement planning.
3. You can work and collect benefits at the same time
You might assume that once you start collecting Social Security, you're not allowed to earn money from a job. Not so.
First of all, once you reach FRA, you can earn any amount of money from a job and still receive your full monthly Social Security benefit. And you can even earn money and collect benefits before FRA. If you go that route, however, you'll be subject to an earnings-test limit that changes each year. And if your income is too high, you'll risk having some of your Social Security benefits withheld.
Know the rules
Although these Social Security rules may not be as well-known as others, they're important points to keep in mind. And while you're at it, you may want to share them with your friends so that they can make the most of their benefits, too.
