Key Points
It’s hard to avoid the temptation to claim Social Security early. If you were born in 1960 or later, your full retirement age is 67. And that’s when you can collect your monthly checks without a reduction.
But since Social Security benefits become available starting at age 62, waiting for full retirement age could mean sitting tight for five full years. That’s not an easy thing to do when you want your money sooner.
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Usually, claiming Social Security at 62, or at any point before full retirement age, results in a permanent reduction in benefits. But it doesn’t have to be.
Thanks to a little-known rule, there’s a way to avoid having your Social Security checks slashed permanently due to claiming benefits early. But you need to act quickly.
Are you familiar with Social Security’s do-over option?
Some people are surprised to learn that Social Security offers all beneficiaries one do-over in their lifetime. If you claim benefits ahead of full retirement age, you can undo that decision and file again at a later age. This allows you to lock in larger monthly checks.
But to exercise that do-over, you only have 12 months to withdraw your application for benefits to take advantage of this little-known rule.
And there’s a second step: You’ll need to repay the Social Security Administration all the money you received if you want the option to undo your claim.
If you wait too long to start getting the money together, you might struggle to come up with it, thereby sentencing yourself to a smaller monthly retirement paycheck for life.
If you’re claiming Social Security early, make sure there’s a reason
You’re clearly not automatically stuck with a shrunken Social Security check if you file ahead of your full retirement age. But if you’re thinking of doing so, make sure you have a good reason.
That reason could be that you want the money to travel while your health is still good, and you have enough savings to cover your essential expenses. It could also be that your job is harming your health, and you need the money to quit. Or, it may be that you don’t expect to live very long and want to get your money sooner, so your lifetime Social Security paycheck is larger.
Just make sure to think things through before filing, because while undoing your Social Security claim is an option, it’s not necessarily an easy one. And the last thing you want is to get stuck with a filing decision you ultimately regret.
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