For many retirees, Social Security inevitably becomes an important income source. And if you don't want those benefits reduced, you'll need to wait until full retirement age to file for them. Full retirement age is 67 for anyone born in 1960 or later.
However, you're allowed to sign up for Social Security as early as age 62. And while taking benefits before full retirement age will result in a permanent reduction to your monthly checks, for some people, it's easy to justify an early filing.
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But what if you claimed Social Security before full retirement age and are now regretting it? If so, all isn't lost. There may be a way to avoid a lifelong benefit reduction, but you'll need to act quickly.
Don't forget about the do-over option
One of Social Security's lesser-known rules is that each filer is allowed a single lifetime do-over. What this means is that if you claimed benefits already, you get one chance to undo your filing and sign up again at a later time.
But to take advantage of this option, you need to follow two rules:
- You must withdraw your application for benefits within 12 months of signing up.
- You must repay all of the benefits you received from Social Security.
Both of these rules could be a problem, depending on the circumstances. If you didn't realize you could undo your claim and you're beyond the 12-month mark, you may be out of luck. And if you have no idea where you'll get the money to repay the Social Security Administration, you may not be able to undo your filing.
Otherwise, you can get a second chance at claiming Social Security and potentially lock in much larger monthly checks in the process.
Think carefully before taking benefits
Some people get excited over the idea of becoming eligible for Social Security and rush to file for benefits right away. If you're about to turn 62, don't assume that you should claim benefits immediately. Instead, run the numbers to see what you have to gain and lose by filing at different ages.
In fact, you should run the numbers on any filing scenario you're thinking about. Maybe you're planning to take benefits at 65 in conjunction with signing up for Medicare. Even then, you'll be looking at a notable reduction compared to waiting until full retirement age, so it's important to know exactly what the numbers look like.
But sometimes, even careful decision making can become a source of regret. So if you're bemoaning your Social Security claim, no matter what age it happened at, know that you may have options for undoing it.
