There are plenty of good reasons to file for Social Security before reaching full retirement age (FRA), which is when you're entitled to your monthly benefit in full. If you're laid off in your early 60s and can't pay your bills, then you're better off claiming Social Security than racking up costly debt. If you have a ton of personal savings, you may decide that you're willing to accept a lower monthly benefit if it means getting to enjoy that money while you're younger.
But some seniors who sign up for Social Security ahead of FRA regret doing so, namely because they're then left with a lower monthly benefit for life. If you claimed your benefits too early, here are a few steps you can take to make up for it.
1. Undo your filing
One lesser-known Social Security rule is that you're allowed one do-over in your lifetime with regard to claiming benefits. If you sign up too early, you have the option to withdraw your filing within a year, repay all of the money you collected in benefits, and then file for Social Security at a later age. This is a route worth considering if you're able to repay the Social Security Administration, because that way, you won't lock in a lower monthly benefit for what could be several decades' time.
2. Boost your income with a part-time job
If a lower Social Security benefit is hurting you financially, a part-time job may be just the thing to compensate. That said, you should know that if you work while collecting Social Security before reaching FRA, you'll be subject to the earnings test.
In 2020, you can work and earn up to $18,240 without losing out on benefits, but from there, you'll have $1 in Social Security withheld for every $2 you make. If you'll reach FRA this year, that limit increases to $48,600, after which you'll have $1 in Social Security withheld for every $3 you earn. Now the benefits you have withheld aren't forfeited completely; they're added to your monthly benefit once you reach FRA. But if you're going to work part-time to make up for a lower Social Security benefit, it pays to know how much you can earn before that withholding comes into play.
3. Move to a state with a lower cost of living
You might struggle to make ends meet if you're stuck with a lower Social Security benefit, but you can help make up for it by relocating to a state with a lower cost of living overall. Imagine you're able to move someplace with more affordable home prices and property taxes, no state income tax, or cheaper healthcare. Any of these factors could make your lower benefit easier to manage.
There's a reason seniors are often told to avoid claiming Social Security early: Doing so could result in financial struggles. If you've already signed up for benefits and regret it, don't despair. You may be able to undo your filing and get a second chance at claiming Social Security. If that's off the table, supplementing your income with a job or relocating could meaningfully improve your financial picture.