This article was updated on July 31, 2017.
Life offers a lot of chances for do-overs. Marry the wrong person? File some papers and you're free to take as many trips down the aisle as your heart desires. Didn't get the dramatic lift you wanted from your plastic surgeon? After the swelling subsides, just make another appointment...and then another, and another.
But when it comes to pulling the trigger on taking Social Security benefits, you only get one chance to take back what you did and do it over sometime in the future. And even then, you only have a narrow window of opportunity.
As the Social Security Administration rules state, if you have second thoughts about taking benefits after you apply, you can withdraw your claim and reapply later on -- but you only have 12 months to change your mind, you'll have to repay all of the benefits you received, and you're only allowed one single do-over during your lifetime.
Get your Social Security benefits claim right the first time
Being strategic about claiming your Social Security benefits can have a huge impact on your retirement quality of life, so it pays (literally) to know your options before you use up your do-over.
Here are six strategies to help you decide when to apply to get the maximum value from your benefits.
1. The "take it ASAP and keep working" strategy
According to the Social Security Administration's official rules, you can start receiving benefits as early as age 62. You'll receive a smaller monthly check than you would if you claimed benefits at your full retirement age, but you'll also get more checks. This is a good option for those who need that influx of cash earlier in their retirement or want to keep their savings in tax-favored accounts for longer so that their retirement investments continue to grow as long as possible.
However, if you plan to tap your Social Security income early and then supplement it with income from another job, your benefits could be reduced depending on how much bacon you bring home.
Using the "retirement earnings test," the SSA will look to see if what you earn exceeds a certain limit and then lower the amount in your Social Security check accordingly. For 2017 the earnings limit is $16,920, and every $2 you make over that amount reduces your benefit by $1. This doesn't go on forever, though. In the year in which you reach your full retirement age, the earnings cap goes up to $44,880, and every $3 you earn beyond that reduces your benefits by $1. Earnings after you reach full retirement age are no longer subject to a cap and have no effect on your benefits going forward.
That said, by working, you continue to accrue credit for your annual wages (which might actually boost your future benefit once you reach full retirement age), and you will be repaid the benefits you surrendered along the way.
2. The "wait for it" strategy
Though it's tempting to start claiming your due from Uncle Sam the moment you officially retire, you might want to hold your horses for a few years. The benefit of waiting is a bigger payday.
For example, excluding inflation (which is reflected in the cost-of-living adjustments that increase beneficiaries' Social Security payments), a 62-year-old receiving a $750 benefit today could boost their monthly payment to $1,000 by waiting until age 66 to claim benefits. Hang in there until age 70, and your paycheck will grow substantially:
The risk of going with this strategy is death. That is, the longer you wait to start claiming your Social Security benefits, the fewer paychecks you'll likely collect before you (ahem) permanently retire. Still, if you can wait to start claiming Social Security benefits and you have a family history of longevity, then the payoff can be tremendous.
3. The "you go first" strategy
For couples, coordinating benefits to maximize their combined lifetime payments is complex, and it's important to know the rules. Namely, if you want to claim Social Security benefits based on your spouse's work history, then you must wait until your spouse has filed for retirement benefits. Those who claim spousal benefits are entitled to up to 50% of their spouse's benefit, depending on when they claim (more details here).
It can be especially smart for the lower-earning spouse to claim their benefits early while the higher earner delays their benefits until age 70, when their benefit will max out. Because the higher earner's full benefit is greater, those delayed-retirement credits will boost their benefit even more than they would the lower earner's benefit.
4. The "claim early and invest it" strategy
It's true that if you claim Social Security at age 62 and then live well into your 80s, you'll receive less in total lifetime benefits than you would get by claiming later. However, that's assuming that you spend your benefits, rather than putting them to work for you.
If you were to invest your Social Security benefits starting at age 62, they could grow to be worth far more than the cumulative benefits you'd receive by claiming at age 70. In fact, even if you only earned 5% on your invested Social Security benefits, you'd still be ahead at age 90.
This strategy comes with a couple of big caveats, though. First of all, it only makes sense if you don't need those benefits to get by and you're confident that you can generate a decent return on your invested benefits. Secondly, if you have loved ones who might one day rely on Social Security survivor benefits based on your record, then you may prefer to delay your benefits in order to raise any survivor benefits that would be paid out in the event of your death.
5. The "don't get married again after age 60" strategy
Here's one for spouses (or exes) receiving Social Security benefits based on a deceased spouse's income. (In more blunt terms, this is a rule you should know if you were married to, or divorced from, someone who died and you are eligible for spousal benefits.) There are a lot of factors that affect Social Security spousal benefits, but here's a particularly important rule for anyone who had a May-December romance in which Mr. or Ms. December died before you: If you remarry before age 60, then you won't be able to claim your late ex's benefits.
If you're divorced and your ex is as healthy as an ox, then so long as you were married for 10 years or more and you haven't taken another trip down the aisle, you're eligible for spousal benefits -- even if your ex remarries. And here's a little something extra to add a silver lining to your breakup: You don't even have to wait for your ex to file for benefits in order to claim your spousal benefits, so long as your ex is eligible for benefits.
6. The "move to avoid paying Social Security income taxes" strategy
So this one's not the most practical strategy for most retirees, but if you live in one of the 13 states that tax your Social Security income and are open to packing up the homestead and moving, then consider adding "state tax laws" to your strategic comparison list. The states of Minnesota, North Dakota, Vermont, and West Virginia tax Social Security income without exemptions. Colorado, Connecticut, Kansas, Montana, Missouri, Nebraska, New Mexico, Rhode Island, and Utah have their own set of rules based on age and income to guide what taxpayers must include on their state tax returns. For residents of these states, it's important to know how much of their Social Security benefits they may have to give up in order to stay put.
There's no one-size-fits-all strategy for claiming Social Security, but as you think about how your benefits factor into your retirement plan, make sure you consider these six strategies and more.