If you claimed Social Security benefits any time before age 70, your checks are smaller than they could've been had you waited. This could be because you've been hit with early filing penalties if you claimed prior to your full retirement age (FRA). And even if you waited until after FRA, you still gave up the chance to raise your income with delayed retirement credits if you claimed before 70, as these benefit-boosting credits can be earned until then. .
Sometimes, it makes sense to start your benefits prior to age 70 even if that does mean smaller checks. However, you may come to regret this choice if you realize you'd rather forgo benefits now in exchange for larger checks later. If you claimed Social Security early and wish you hadn't, you may have options. In fact, here are three possible solutions.
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1. Work and earn enough that you forfeit your benefits
If you're still under your full retirement age and can earn enough money from work, you can actually cause your Social Security benefits to stop. That happens because of the retirement earnings test (RET). Under the RET, those who work before hitting FRA will forfeit some of their benefits once their income exceeds a certain threshold. Then, at FRA, the amount of your check is recalculated to account for the benefits you didn't receive.
If you'll be under FRA for the entire year, you can earn up to $18,240 in 2020 (or $18,960 in 2021) without your benefits being affected. However, for each $2 you earn above these thresholds, you'll lose $1 in Social Security benefits. If you'll be hitting your FRA at some point during the year, you can earn up to $48,600 in 2020 (or $50,520 in 2021) before losing $1 in benefits for each $3 earned above the threshold.
When you forfeit benefits under the RET, Social Security withholds entire monthly checks -- so, for example, if your benefit is $1,500 a month and you're forfeiting $3,000 in benefits, you'd get no payments at all for two months. When you hit your FRA, your benefit is recalculated and you're credited back the early filing penalty for any month you got no benefit. That means if you can work enough to stop your benefits entirely, you should get credited back all the early filing penalties and the amount of your check will go up accordingly.
2. Rescind your claim if you're eligible
You get one do-over when you claim Social Security early, but you can only exercise it if you act before you've received a full year of benefits. If you started your benefits less than 12 months ago, you can withdraw your application and it will be as if it never happened.
The catch, however, is that you'll have to fully repay all benefits received. This includes not just checks you got from Social Security, but also any other benefits paid based on your work record, such as spousal benefits. This could mean repaying a large sum of money if you've received benefits for most of the year.
3. Suspend your benefits if you've already reached FRA
If you've already hit your full retirement age but haven't yet reached the age of 70, it's possible to suspend your benefits. If you do that, you can start earning delayed retirement credits again, which will boost your benefits after you resume them.
You can request a suspension of your benefits by phone, in writing, or at your local Social Security office when and if it is open (some offices remain closed due to COVID-19). Suspending your benefits means you won't get any more income coming in now, but you'll lock in higher benefits for the rest of your life.
Of course, this option works for you only if you have already reached full retirement age, while working to stop your benefits is possible only if you haven't reached FRA. And rescinding your claim is an option only for a limited period of time after you claim. That means none of these solutions will work for everyone. Hopefully, you'll be able to find one that works for you -- but if you haven't yet started to get your checks, think carefully before you claim them due to the fact that you may not always be able to undo your decision once you've made it.
