Dear Rusty: I will be 67 next month and reached my full retirement age in July 2022. My wife and I are discussing whether we should take Social Security now or wait until we are age 70 to get a higher benefit. I remember reading that you can start Social Security and, if not needed, pay it back within a year and then “reset” to get a higher benefit by waiting longer. Please describe the steps of this process to take now and repay the year’s benefits if we do not need them. Signed: Uncertain
Dear Uncertain: Well, to exercise the so-called “do over option” (which is essentially withdrawing your application for benefits), you need to contact Social Security (1-800-772-1213 or your local SS field office) and request that your application for benefits be withdrawn. You can also download and complete form SSA-521 and deliver the same to your local Social Security office. You can get that form at this link: www.ssa.gov/forms/ssa-521.pdf.
This “do-over option” is only available within 12 months of the date you submit your application and can only be done once in your lifetime. If you use it, you will be required to repay Social Security for all payments made on your behalf, including not only your monthly payments but also any income taxes you had withheld, and any Medicare premiums which were withheld from your monthly payments (Social Security will inform you how much you must repay). Once the repayment is made, it will be as though you never applied for benefits, meaning your benefit amount will be higher when you later re-apply (which would also be the case if you simply didn’t apply – your benefit entitlement continues to grow until you claim, up to age 70 when your maximum SS benefit is attained). This process would be the same for both you and your wife.
However, I suggest you consider whether you really need to withdraw your application. Be aware that since you’ve already reached your full retirement age (FRA) you can claim now and, if you later decide you don’t need the monthly SS money, you can simply temporarily suspend your benefit payments to avoid repaying Social Security everything they’ve already paid to you and on your behalf (you don’t need to formally withdraw your application). By simply suspending (and not withdrawing), your benefit amount will start growing again with each month your benefits are suspended (about .67% more for each month you do not get benefits) and you can keep everything you’ve already received to the point you suspend your payments. To suspend your payments just call Social Security at the number provided above and tell them you wish to suspend your benefits and grow your payment amount. While you can only use the withdrawal process once in your lifetime, you can temporarily suspend your benefit payments multiple times if necessary.
Russell Gloor is an Association of Mature American Citizens certified social security advisor. To submit a question, visit amacfoundation.org/programs/social-security-advisoryor email ssadvisor@amacfoundation.org.
