- The stakes are high when it comes to claiming Social Security benefits. That's because the timing of your decision helps determine how big your monthly check will be.
- You may decide to take your benefits, and then regret it. As long as it has been less than one year, you may be able to undo your decision.
- A do-over will cost you, especially because you will have to pay back any benefits you received. Here's what you need to know if change your mind.
It's the gift that everybody wants: the ability to get a do-over when you make a mistake.
In golf, it's called a mulligan, or the chance to redo a stroke.
With Social Security, it's called a withdrawal of application.
However, the circumstances under which you can exercise this option are limited. And you only get one withdrawal per lifetime.
The stakes for making the wrong claiming decision with regard to your retirement benefits are high.
That's because you first become eligible to take Social Security at 62. But if you wait to claim to as late as age 70, your benefits get increasingly bigger.
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That's why many experts caution you to delay.
For instance, it's possible you may not have had all the information you needed to factor into your decision, or your personal circumstances could change.
In that case, you may be able to withdraw your claim — as long as it's been less than 12 months since you made your initial decision.
"It's a difficult process to go through, one that you wouldn't make casually," said David Freitag, financial planning consultant and Social Security expert at MassMutual.
Ideally, you want to be educated and make the right choice the first time.
"You need to make the decision on purpose, rather than by accident," Freitag said.
Of course, your circumstances can change, and that could warrant reversing your claiming decision.
For example, you may have been laid off from your job, which prompted you to take benefits, only to subsequently find a new position with great pay.
Or, you may have had health issues, which have since improved.
One big catch is that to reverse your decision, you need to repay all the benefits you received.
That includes any money your spouse or children received through either spousal or dependent benefits.
It also includes money withheld from your checks, such as Medicare premiums, voluntary tax withholdings or garnishments.
And you can't repay those benefits over time. It must be paid in one lump sum, Freitag said.
"You can't do it with a Visa card," Freitag said. "You have to write a check and pay it back, and that's very difficult for people to do, particularly when you're talking about sizable amounts of money."
For example, if a 64-year old who is receiving $2,000 per month changes their mind after about a year, that's $24,000.
To withdraw your benefits application, the Social Security Administration requires you to first fill out a form. Then it will notify you whether your request has been approved and how much you are required to pay.
You do have 60 days to cancel an approved withdrawal.
In addition, you can also choose to withdraw your Medicare coverage, but are not required to. Medicare eligibility starts from age 65. If you do withdraw your Social Security benefits, you will not automatically be enrolled in Medicare when you turn 65.