Explaining Social Security’s “do-over” option
Few would argue that Social Security is not included in the list of most important social benefit programs available to America’s senior citizens. The fact is that over 62 million Americans rely heavily on Social Security, with some of them (about 34%) relying on the program for nearly all of their retirement income. Against that backdrop, it certainly makes sense that recipients would want to maximize their benefits. But suppose Social Security was claimed early (for example at age 62) and the circumstance that induced you to apply early went away, effectively leaving you wishing you hadn’t claimed early. Well, in that case, Social Security does have a “do-over” option which allows you to withdraw your claim and let your benefit continue to grow until a later time. There are some strings attached, but it is possible, as this Motley Fool article by Sean Williams explains. NOTE from AMAC SS Advisory Staff: Be aware that the author overstates annual benefit growth prior to one’s full retirement age as 8% when it is actually about 6.7% (and maybe even less if more than 36 months early). And also be aware that another option to grow ones benefit exists after full retirement age when early benefits can be suspended and allowed to grow by 8% per year up to age 70. Nevertheless, this Motley Fool article is a valuable explanation of an important option for those who regret applying early. Click here to read more.