Skip to main content

«  View All Posts


How the Social Security Do-Over Works

August 23rd, 2018 | 2 min. read

By Jacob Schroeder

How the Social Security Do Over Works - image

There aren’t many things in life that offer second chances. One, surprisingly, is filing for Social Security.

We all have past events that we would love to have the opportunity to do over. As a light example, the times you think of the perfect remark to say to someone, but only hours or days later. The wish is to apply lessons you’ve learned from experience or new information obtained to create a better outcome.

That desire to rewind the clock and do things differently exists in the finance realm, too. Sometimes we make mistakes or discover a strategy that would have been more successful. Fortunately, there are some options available to help rectify your financial missteps. Just think of all the times you have thankfully been able to return impulse buys you didn’t really need.

What you may not know is that a second-chance option exists for Social Security. This Social Security do-over allows you to withdraw your application and then re-apply later. It can come in handy if your financial situation unexpectedly changes.

However, there are several important rules you should know first.

Taking a Social Security Mulligan

If you file for Social Security and then change your mind, don’t fret. You can withdraw your application within 12 months of filing. You must, however, pay back the benefits, without interest, you’ve already received. (If you’ve been receiving payments for more than a year, you are not eligible for a do-over.)

So, let’s say you claim Social Security at age 62, which means your benefit is permanently reduced by 25%. Suppose a few months later you decide you don’t need the money right now and would rather not have the reduction that comes with claiming your benefit early. You can notify the Social Security Administration, pay back all the money you have received and then apply for Social Security again later. Your payments then will be in the amount you’re due at that age.

Suspending Social Security

There is another way to change your Social Security strategy in the event your situation changes. When you reach full retirement age, which is typically age 66, you can choose to suspend your benefit. You will then earn delayed retirement credits that will boost your benefit by 8% per year until you decide to restart payments or until age 70.

In this instance, you don’t have to pay back any benefits. Keep in mind though that if you elected to start payments early at age 62, the 25% reduction still applies.

Before You Take a Do-Over

It’s important to remember that you are only allowed to withdraw your Social Security application once. Further, if you’re enrolled in Medicare, you will have to pay for the premiums that would otherwise have been automatically deducted from your Social Security paycheck. 

Because Social Security is such an important source of income in retirement, you should plan ahead. By the time you’re eligible for Social Security and ready to retire, you should have a financial plan in place that considers your entire financial picture for essentially the rest of your life.

That includes the best age for you to file for Social Security. Don’t assume you should delay until age 70 for the maximum benefit. Contact the Social Security Administration to determine what options are available to you and work with a financial adviser to ensure your decision will help maximize your total income in retirement.

To learn more about how and when you should file for Social Security, download our free Guide to Social Security Benefits.  


Download the Social Security Guide Here