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3 of the Most Helpful Social Security Rules You Should Know About

By Maurie Backman - Dec 22, 2020 at 6:07AM

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These aspects of the program could really work to your advantage.

Social Security is loaded with rules -- so much so that you could probably spend an entire day reading up on the program and still have some knowledge gaps. But while some of those rules do tend to work against seniors, others actually work to their benefit. Here are a few important ones that fall into the latter category.

1. You can undo your filing if you change your mind

The Social Security Administration (SSA) gives all filers one do-over in their lifetime. This means that if you claim benefits too early and slash them in the process, you'll have the option to take it back. There is, however, a catch. You must not only withdraw your application for benefits within a year, but also, repay the SSA every dollar it paid you. For some seniors, that's a difficult ask. However, if you claim Social Security at 62 (which means getting stuck with the maximum reduction in benefits you could get) and regret that decision six months later, you can undo it and wait until full retirement age to file, thereby avoiding any sort of hit.

Loose pile of Social Security cards

Image source: Getty Images.

2. You can get a raise from year to year

Social Security recipients are entitled to annual cost-of-living adjustments, or COLAs, that are designed to help them maintain their buying power in the face of inflation. Now COLAs aren't always so generous, and they're also not guaranteed (it's possible to have a 0% COLA). Since they're calculated based on fluctuations in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), during periods when the cost of common goods and services doesn't increase, benefits remain stagnant. But when the CPI-W does rise, benefits follow suit, which helps seniors keep up with their bills year after year.

3. You can boost your benefits by delaying your filing

You're entitled to your full monthly benefit based on your personal wage history at full retirement age, which is either 66, 67, or somewhere in between those two ages, depending on the year you were born. But if you want to score a higher monthly benefit, you have the option to delay your filing past full retirement age. For each year you do, your benefits will grow by 8%, up until age 70, at which point you can't accrue those delayed retirement credits any longer. While holding out that long for benefits isn't easy, the fact that the option exists is a good thing, especially for seniors who rely on Social Security as their main source of retirement income.

Many people feel that Social Security has its share of shortcomings -- benefits don't pay enough, and the fact that they're taxable for a large number of seniors only adds insult to injury. But there are some aspects of Social Security that really are quite helpful. Whether you're close to filing for benefits or are still in the midst of your career, it pays to read up on the program and learn about the many ways you can make the most of it.

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