There's a reason so many people rush to claim Social Security at age 62. That's the earliest age you can sign up to collect those monthly benefits. And for many people, filing for Social Security at 62 could be the ticket to a much-desired fairly early retirement.
But what if you've filed for Social Security at age 62 and aren't happy with your monthly check? Of course, it shouldn't come as a surprise that claiming benefits before full retirement age reduces them substantially. But you may be learning as you go that living on a much smaller Social Security benefit isn't as easy as you expected it to be, especially with stubbornly high inflation continuing to drive living costs upward.
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If you already regret claiming Social Security at 62 and locking in a lower monthly benefit as a result, here's some good news: You're not automatically stuck with that smaller monthly check. But you'll need to act quickly if you want that number to change.
A lesser-known Social Security rule gives you a second chance
One thing many people don't know about Social Security is that filers get a single do-over in their lifetime in the context of claiming benefits. Simply put, if you're unhappy with your monthly Social Security check at age 62, you can withdraw your application for benefits, repay the money you received from Social Security to date, and file again at a later point in time.
The do-over option must be acted on within a year of claiming benefits. But if you're still 62, it means you're within that year.
So if you haven't spent all of the money Social Security paid you, you have the option to undo your filing and sign up at a later age for a larger monthly check. It's an option worth considering if you can't imagine being limited to your current monthly benefit for the rest of your life -- but you'll need to plan for that do-over carefully.
You need a plan if you'll be giving up your Social Security checks
Undoing your Social Security claim could be a smart move. But you may need to make a big lifestyle change if you're no longer going to be receiving Social Security for the foreseeable future.
This assumes, of course, that you don't have a large nest egg to fall back on. If you feel you jumped the gun on Social Security at 62 but have a $1.5 million IRA, you may be just fine to undo your filing and live off of your savings for a while instead.
But many people who claim Social Security at 62 don't have large savings to fall back on. So if you're in that boat, you'll need to think about how you'll make up for those missing monthly payments.
One option is of course to go back to work. But don't assume that's a given. You may be surprised at how tough it is to break back into your former field once you've made your retirement official. A good bet is to put out feelers before you undo your Social Security claim and make sure there are some viable opportunities out there.
Of course, another option may be to work part-time, or even full-time, through the gig economy. This gives you a lot more freedom in your schedule. And it may be an easier option to cope with if you've already been retired for a few months and are no longer used to the daily grind.
Social Security is more flexible than you might think in that you're allowed to undo an early filing you regret. Going this route could set you up with more monthly income and fewer financial worries later on in retirement. But do make sure to think things through before giving up that monthly benefit.
