Q & A
I filed for Social Security and now I regret it. Do I have any options?
Complete Question: Unfortunately, I was under the impression that I should file for Social Security at age 62 just because I was newly eligible. As I talk to more people my age (I am 64 now), I am realizing that was a bad idea, especially since I didn’t even need the monthly payments at the time, and I still don’t need them, because I haven’t retired from my job yet. I’m hoping there’s something I can do about this. I’ve heard something about withdrawing an application, but am not sure what’s involved, especially since I filed over two years ago. Do I have any options or am I just stuck with my mistake?
Answer: First of all, there is such a thing as withdrawal of application; however, it has to be completed within one year of the original application filing date and you are obviously past this time frame. You do have another option if you are willing to wait a while because it won’t be available to you until you are full retirement age (66). This option is voluntary suspension. If you choose to do this, you submit a request to stop receiving your benefits until either you request them to start again or your 70th birthday, whichever comes first. In the meantime. your benefit amount will earn delayed retirement credits (DRCs) at a rate of 8% per year pro-rated for each month your benefit is suspended. You should understand, however, that the DRCs will be based on the benefit amount you are receiving at the time you suspend your benefit. For example, if you would have received $2,000 at age 66 if you did not file early, but are actually receiving much less at age 66 because of early retirement reductions, the DRCs will be based on the reduced amount.
Two years to wait to voluntarily suspend your benefits may seem far away, especially if you feel that you do not need the cash now, but you may retire and need the cash by then. However if you plan ahead, you can make sure you save enough to take advantage of this. After all, your Social Security was never meant to be all of your retirement funding anyway.
C.J. Miles, MSA, MBAHCM
Research Analyst & Social Security Advisor
AMAC Foundation