Did you claim social security too early? Here are your options – The crazy Motley

Claiming social security as soon as you are eligible may seem wise when you reach the age of 62 and are about to retire. Why not start putting a monthly government check to use? After all, it's your money that you've contributed to the program throughout your professional life.

The problem is that if you apply for benefits before you reach retirement age (FRA), you will see a reduction in benefits for the checks you will receive all your life. Depending on the timing of your claim, your social security income could be 30% lower than what it would have been if you had waited for your FRA. And the more you are able to wait even after your FRA, the more you accumulate delayed retirement credits, until the bonus reaches its maximum, up to 70 years. All of these expectations translate into greater Social Security audits when you start claiming them.

So what happens if you discover that you have claimed social security too soon and that you prefer to wait for more benefits later? The good news is that you have some options.

1. You can withdraw your request.

If it's been less than a year since you apply for your Social Security benefits, it's not too late to press the reset button and cancel your application by completing a SSA-521 form. If you do, it will be as if you have never claimed.

Unfortunately, there is a trap. You must repay the benefits you have already received to withdraw your application. Depending on how long you receive benefits and how much you have already been paid, this could mean earning several thousand dollars to give back to the Social Security Administration (SSA).

Nevertheless, if you are able to find the money and you are within one year limit, withdrawing your application is the easiest way to restore your ability to increase income security. while waiting to claim benefits.

2. You can go back to work.

Another way to recover some of the benefits you have lost by claiming earlier is to return to the job market.

If you have not reached your FRA, return to work will result in reduced benefits, provided you earn a certain annual income. For 2019, your benefits are reduced by $ 1 for every $ 2 above $ 17,640.

If you can earn enough money, your benefits can be significantly reduced or potentially reduced to $ 0. You are credited for benefit reduction, so your social security checks will be more important later.

Earning extra money now can also allow you to put more money into your retirement savings, which will increase your retirement income from investments. Any turbocharge you can offer to your portfolio will help offset the benefit reduction resulting from an untimely social security claim.

3. You can suspend your benefits.

If you have already reached your FRA and realize that you have applied for benefits too early, you have the option to suspend your benefits. If you do that, you can start accumulating deferred retirement credits, as you would never have asked. Deferred retirement credits can be earned up to 70 years. Once you turn 70, waiting to claim social security will no longer increase your benefits.

Unfortunately, many people who claim to have reached social security too early have not yet reached the FRA. This is not an option for everyone. However, if you are between 70 and your FRA and want to increase your benefits later, suspending your application is a simple way to do so.

You can ask the SSA to suspend your suspended services orally or in writing. You can also contact the Social Security Administration (SSA) at 1-800-772-1213 or make a request in person to your local Social Security Office, which you will find here.

Which redesign is best for you?

If more than 12 months have elapsed since you claimed Social Security for the first time and you wish to cancel your application, your only option would be to try to work and reduce your benefits – unless you have Have more age of retirement but less than 70 years old.

Unfortunately, if you can not find work and can not suspend your benefits or withdraw your application, you really have no option but to live with your reduced Social Security benefit. You can Find ways to further expand your retirement fund, such as moving to a state that will not tax your income on social security.

Since it is difficult to cancel an early claim, make sure you understand how Social Security works before you decide to apply. Then you will make the most informed choice for your financial future.