There's a reason it's so important to put a lot of thought into your Social Security filing. The monthly benefit you lock in at the time you sign up is generally the same monthly benefit you can look forward to for life.
This doesn't account for cost-of-living adjustments (COLAs), of course, which are designed to help your monthly payments keep pace with inflation. But for the most part, if you file for Social Security at a point in time that renders you eligible for a $2,000 monthly benefit, you should expect to collect $2,000 a month plus COLAs as applicable.
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But what if you just received your first Social Security check and you aren't happy with the number? You might assume you'll have to manage with a monthly payment that's too low for comfort for the rest of retirement. But the good news is that there may be a way to score a higher benefit -- if you act quickly.
When you get a second chance
You're entitled to your complete monthly Social Security benefit based on your personal wage history at full retirement age (FRA). FRA is 67 for people born in 1960 or later. If you're a bit older, then FRA is either 66 or 66 and a specific number of months, depending on your year of birth.
Meanwhile, you're allowed to file for Social Security as early as age 62. But for each month you claim Social Security ahead of FRA, your monthly benefit is reduced on what's generally a permanent basis. And on the flipside, if you delay your filing past FRA, your Social Security benefit will get a permanent boost for each month you hold off, up until age 70.
So, let's say you decide to claim Social Security at age 62 to get your money as soon as possible. You may now be looking at a monthly benefit that's lower than what you're comfortable with.
But all isn't lost. That's because Social Security gives all filers one do-over in their lifetime. So if you've only gotten one Social Security check so far, all you need to do is withdraw your application for benefits immediately and return the sum of money you received in benefit form. It's that simple. (Technically, you have up to a year to withdraw your benefit application and repay the money, but why wait and risk missing that deadline?)
From there, you'll get the option to sign up for Social Security again at a later point in time. If you wait until FRA, you won't face a reduction in your monthly benefit at all. And if you're able to delay your claim beyond an FRA of 67, you could end up with a monthly benefit that's 24% higher at age 70.
Think carefully before you sign up
The fact that Social Security offers its do-over option has the potential to be a lifeline for seniors who file for benefits prematurely and regret it after the fact. But in reality, the best course of action is really to try to land on the right filing age from the start.
If you're in a situation where you've only received one monthly benefit payment from Social Security, paying back that sum may be doable. But it's harder to pay back eight or nine months' worth of Social Security checks.
So ultimately, your best bet is to put lots of thought into your claiming decision, and also, crunch the numbers to see what monthly benefit you'll get based on your filing age. That way, you won't get caught off guard if your first Social Security check is smaller than expected, and you won't then have to go through the motions of undoing your filing.
