Your filing age plays a big role in determining what monthly Social Security benefit you'll be able to collect in retirement. If you wait until full retirement age, you'll get your complete monthly benefit, based on your personal wage history, without a reduction. Full retirement age is 66, 67, or somewhere in the middle, depending on the year in which you were born.
Many seniors, however, opt to claim Social Security at 62, which is the earliest age to sign up for benefits. The upside in doing so is getting those monthly payments sooner. The downside, of course, is locking in a reduced monthly benefit -- potentially for life.
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If you filed for Social Security before full retirement age, you may be regretting that decision. But thanks to this lesser-known rule, you may not be stuck with a lower monthly benefit for the rest of your retirement.
You get a do-over -- but only one
Social Security gives all filers a single do-over in their lifetimes. If you filed for benefits early but aren't happy with that choice, you can undo that decision as long as you:
- Withdraw your application for benefits within a year
- Repay all of the benefits you received to the Social Security Administration
From there, you can sign up for benefits at a later age, potentially avoiding a reduction.
You only get to take advantage of this do-over option once in your lifetime. So if you're going to undo your filing, make sure to think things through the next time you sign up. You may want to push yourself to wait until full retirement age so a reduced monthly benefit isn't something you're stuck with.
You may also want to consider delaying your Social Security filing past full retirement age. For each year you do, up until age 70, your monthly benefit gets to grow 8%. And that's definitely a nice incentive for waiting.
