You're typically eligible for Social Security benefits at age 62, but Social Security rewards those who wait.
Delaying benefits until your full retirement age (FRA), which is 66 ½ or 67 depending on when you were born, ups your monthly benefit by about 30%. Your benefits increase by another 8% for each year you wait between your FRA and age 70, which is when they max out.
But a lot of people choose not to wait. The most popular age to claim Social Security is 62 for both women and men, according to the Center for Retirement Research. Just 5% of men and 7% of women wait until age 70 to take benefits.
So what happens when you realize you've taken Social Security too early and you'd rather wait for higher benefits? You only have two options for reversing your decision.
1. You can withdraw your application if you've been getting benefits for less than a year.
Social Security will let you withdraw your application if you've been claiming benefits for less than 12 months. You can only do this once in your lifetime. Your benefits will stop, but you can reapply once you're ready for them to resume.
You'll have to pay back all the money you received, including Medicare premiums, taxes that you had voluntarily withheld, and any benefits your spouse and children received. If your family members received benefits, they'll have to consent in writing to your withdrawal.
To withdraw the application, you'll need to fill out Form SSA-521 and include your reason for withdrawing. You'll send it to your local Social Security office, which will let you know how much you need to repay once your application is approved.
Once you resume your benefits, Social Security will pay you at whatever level you're eligible for based on your age.
For example, suppose you started your benefits at 62 and withdrew your application six months later, then reapplied at your FRA of 66 ½. You'd get your full retirement benefit because you repaid all the money you received from your early benefits.
2. You can suspend your benefits if you're full retirement age but under 70.
If you've reached your FRA, you can request to have your retirement benefits suspended by contacting your local Social Security office by phone or in writing, or by visiting in person.
By doing so, you'll earn delayed retirement credits, which will increase your monthly benefits by 8% for every year you hold out. So if you suspended your benefits at age 67 and resumed them at 68, your monthly benefit would be 8% higher for the rest of your life.
While your payments are suspended, your spouse and children can't collect benefits based on your work record. Likewise, you can't claim benefits based on your spouse's work record while your payments are suspended.
You can opt to start receiving benefits again at any point by contacting your local office. If you do nothing, your payments will automatically resume when you turn 70.
What if I don't have either of these options?
Unfortunately, a lot of people won't qualify for either of these options. If your Social Security and savings aren't enough, consider the following solutions:
- Working longer or taking a part-time job: Once you reach full retirement age, your earnings won't affect your Social Security benefits. But be aware that if you're working and collecting Social Security benefits early, for every $2 you earn above $18,240, your benefits will be reduced by $1 in 2020. The limit goes up to $48,600 during the year you reach FRA, with $1 withheld for every $3 you earn above that, but once you actually hit FRA, no earnings limit applies. For every month's worth of benefits you lose, though, you get treated as though you claimed your Social Security a month later than you actually did.
- Cutting costs: Downsizing your home or moving somewhere with a lower cost of living can help make up for a retirement shortfall.
- Getting a reverse mortgage: If you own a home with significant equity and need income, a reverse mortgage is worth considering, so long as you're fine with your home being sold to pay off your mortgage when you die.
If you haven't decided when to take Social Security yet, keep in mind that your options for reversing that decision are extremely limited. Holding off on taking benefits if you can is the best strategy when you're worried you won't have enough money when you retire.