The decision facing many seniors about when to claim Social Security can be daunting. Claiming at age 62, when most people first become eligible for benefits, is a popular choice. You'll get an infusion of cash to supplement any income and retirement savings you have, which could enable you to retire earlier.
There's a price, however. Your monthly benefit will be permanently reduced by claiming early. You'll receive just 57% or so of the benefit you would have received if you had waited until age 70, when your benefits max out.
Numerous studies show most people would be better off waiting until age 70 to claim Social Security benefits. At the same time, everyone's personal circumstances are different, so it might make sense for you to claim much earlier.
Adding to the challenge is that your circumstances could change after you decide to start Social Security. That could make what was a good decision at the time result in a poor outcome for you and your family.
Luckily, the Social Security Administration understands the importance of the decision and provides a bit of lenience for anyone claiming benefits early. There are two rules that could help you mitigate any negative outcomes of that choice. Knowing them before you claim can make you more confident in your decision.
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Social Security has an "undo" button
The first rule to know before reaching age 62 and potentially claiming Social Security is that you can withdraw your application if you change your mind.
You get one year from starting Social Security to withdraw your application by filing form 521. If the Social Security Administration accepts your withdrawal, you'll have to return everything you received from the program up to that point. That includes the monthly benefit plus any amount withheld for Medicare premiums or taxes.
The Social Security Administration will let you know exactly how much you'll need to repay when they send you a notice that your withdrawal is approved. If you realize you're unable to repay your benefits, you'll have 60 days to cancel an approved withdrawal application.
If you successfully withdraw your application, you'll completely undo your initial Social Security claim. You'll become eligible for a bigger monthly benefit, and that benefit will increase every month you wait to apply again, up until age 70 (when benefits stop increasing each month).
The Social Security rules allow you to withdraw your application just once per lifetime. If you claim benefits again, you'll be stuck with that decision, even if you change your mind again. The good news, though, is you can do something about it once you reach full retirement age.
What to do when you can't withdraw your application anymore
If you've already withdrawn your application previously or you're past the deadline, you can still take advantage of another rule in the Social Security laws. Once you reach full retirement age, you can suspend your benefits.
Your full retirement age depends on when you were born. Those born between 1943 and 1954 reached full retirement age at 66. Your full retirement age will increase by two months for each year you were born after 1954 until maxing out at age 67 for anyone born in 1960 or later.
If you decide to suspend your benefits, you'll stop receiving a Social Security check each month. Instead, the government will credit your account with delayed retirement credits, which are worth 2/3 of a percentage point of the benefit you were previously receiving for each month you delay benefits.
You'll stop accruing delayed retirement credits at age 70. That means that someone with a full retirement age of 67 who suspends their Social Security the month of their 67th birthday could increase their monthly benefit 24%. That's on top of the annual cost-of-living increase (COLA) you'll still receive.
There are a few drawbacks to suspending benefits besides no longer receiving monthly checks from the program. First, anyone collecting benefits based on your earnings record (a spouse or minor child) will revert to collecting benefits based on their own record, if eligible. Second, if you're on Medicare, you'll be responsible for paying Part B premiums out of pocket. The Social Security Administration generally deducts your premiums from your monthly check, but it won't have a check to deduct that payment from if you suspend benefits. Medicare Part B premiums start at $185 per month in 2025.
If you don't resume your benefits before reaching age 70, the Social Security Administration will automatically restart your benefits the month of your 70th birthday. That's when you'll receive your new, bigger payout.
Make a confident decision knowing there's a safety net
Maybe you're on the fence about whether you should start Social Security or not. Being able to withdraw your application or suspend benefits down the line can help you avoid getting stuck with the wrong decision. As long as you know the rules, you can do what's best now and act accordingly if things change in the future.
