There's a good chance you'll rely on Social Security heavily to pay your bills once you retire, so it's important to understand how the program works. But unfortunately, many people don't.

Now to be fair, Social Security has a lot of rules, and it's hard to keep track of them all. But if you're not in tune with the ins and outs of Social Security, you could end up making some bad decisions that wreck your retirement, so here are three critical rules you must commit to memory.

Older man and woman holding pens to documents

Image source: Getty Images.

1. Benefits don't get reinstated at full retirement age if you claim them early

You're entitled to your full monthly Social Security benefit, based on your earnings history, once you reached full retirement age, or FRA. FRA depends on your year of birth, as per the following table:

Year of Birth

Full Retirement Age




66 and 2 months


66 and 4 months


66 and 6 months


66 and 8 months


66 and 10 months

1960 or later


Data source: Social Security Administration.

That said, you don't have to wait until FRA to sign up; you can file for Social Security starting at age 62, albeit for a reduced monthly benefit. But here's the thing: If you lock in a lower monthly benefit by filing ahead of FRA, you'll collect that same benefit on a lifetime basis. You won't be bumped up to a higher benefit once FRA arrives.

2. You can undo your filing once in your lifetime

Some people claim Social Security early but then regret it after the fact. If that happens to you, you should know that you're not necessarily stuck with a lower monthly benefit for life. Rather, all filers get one chance to undo their claims and sign up for benefits again at a later age.

Now there's a catch here: To take advantage of that do-over, you must withdraw your benefit application within a year of submitting it, and you must also repay every dollar you collected in benefits to the Social Security Administration. But if your financial picture improves after filing for benefits early, a do-over is a good option to explore.

3. Delayed retirement credits stop accruing at 70

Just as you're allowed to sign up for Social Security before reaching FRA, so too can you delay your filing beyond FRA. For each year you do, you'll accrue delayed retirement credits that boost your benefits by 8%. Those credits, however, stop accumulating once you reach the age of 70, so while you won't be compelled to file for Social Security at that point, there's also no sense in delaying your filing beyond that point. In fact, if you wait to collect benefits, you'll lose out on money that could've otherwise been yours.

Know the rules on Social Security

Social Security pays the average recipient today about $1,500 a month. Maybe you'll be entitled to a higher monthly benefit, or a lower one, depending on your wage history. But either way, the income you receive from Social Security could end up being quite substantial, so the last thing you want to do is shortchange yourself on benefits. That's why it's so important to read up on Social Security and understand how the program works. Educating yourself could help you avoid costly mistakes that leave you needlessly cash-strapped during your senior years.