Navigating Social Security at 62? Uncover This Unexpected Rule to Escape a Significant Benefits Reduction
Absolutely, here's a rewritten version of your article that adheres to the guidelines provided:
Gotta love the draw of Social Security at 62, right? It's the earliest age you can claim benefits. And it's no wonder why so many people jump on that bandwagon. Claiming at 62 means getting your hands on your money sooner, but it comes with a catch: a reduced benefit. You won't be entitled to your full monthly benefit based on your earnings history until the big 67 (or later, if you were born in 1960 or later).
The hitch? Once you claim and leave the workforce, you might realize your retirement expenses are a tad heftier than anticipated. At that point, you're sort of stuck with your smaller benefit check for life. Or are you?
Believe it or not, there's a lesser-known rule that permits you to rethink your Social Security claim and opt for a more substantial benefit at a later age. But wait, it's not as simple as it sounds.
Want a second chance?
The Social Security Administration (SSA) won't allow you to file, undo, and keep reclaiming benefits continually. However, they do grant all filers one do-over in their lifetime. So, if you've been receiving benefits since 62 and now regret your decision, you're not necessarily out of options.
Revoking your claim isn't a piece of cake, though. While it's easy enough to withdraw your application for benefits by downloading and mailing in the necessary form to your local SSA office, undoing your claim involves repaying the money the SSA has paid you in benefits. And time's a-ticking – you need to withdraw and repay the funds within 12 months of your filing date.
It becomes tricky if you realize, six months into your claim, that you should have waited to file for a more generous benefit. What if you've already spent the money the SSA has given you? That leaves you with just six months to come up with the required cash to repay the SSA and avoid losing your chance for a do-over.
Hooked on the idea of revoking your Social Security claim? Before you fill out the forms, devise a strategy. Options may not be ideal, but they're there: consider going back to work part-time or even tapping into your home equity to cover the costs.
The right decision from the get-go
It's a nice touch that Social Security recipients get one do-over, but the smart move is to pick the right filing age from the start. To do so, access your earnings statement on the SSA's website, set up an account if you haven't already, and estimate your monthly retirement costs. Based on your projected expenses, determine your minimum payday to cover your basics.
Consider the lifestyle you want during retirement, too. If you prefer not to pinch pennies, you might want to hold off on claiming until after 62, even if you can make ends meet on a smaller benefit.
Think twice about waiting until full retirement age to initiate your benefits. While there's a big difference between claiming at 62 versus 64 or 65, the gap narrows as you get closer to your full retirement age. So, consider the big picture before making your choice.
By doing so, you can make an informed decision about your Social Security benefits and avoid any need for a do-over.
After realizing that retirement expenses might be higher than anticipated, you might find yourself regretting your decision to claim Social Security benefits at 62 due to the reduced monthly benefit. Fortunately, the Social Security Administration allows for a do-over within the first 12 months of filing, but repaying the benefits received is necessary to take advantage of this opportunity.
To avoid having to revoke your claim and repay benefits, it's wise to carefully consider the right filing age beforehand. Access your earnings statement on the SSA's website, set up an account if needed, and estimate your monthly retirement costs. Based on these calculations, determine the minimum payday required to cover your basics and consider your desired lifestyle during retirement, as waiting until full retirement age could provide a more substantial benefit.
