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What if you signed up for Social Security benefits and now regret the decision? Is a “do-over” possible?
Suppose, for example, you didn’t work during the pandemic, and you applied for Social Security because you needed the income. Now, you are able to return to work and want to let your Social Security benefits keep growing so your retirement checks will be bigger.
Can you stop taking the benefit and sign up again later? Yes, some people — but not everyone — can do this.
We asked Russell Settle, an expert on Social Security claiming strategies, how this option — known as withdrawing your Social Security retirement application — works, and who is eligible. Settle is a partner in Social Security Choices, a company that helps workers plan how to maximize benefits.
Settle recommends following these steps if you are thinking of withdrawing your application.
1. Get to know the rules
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First, find out if you are eligible and how withdrawing would affect you.
Call your local Social Security office and ask what is at stake. Here are some basic rules:
- Not everyone is eligible. “With the current law, you’ve got 12 months once you start your benefits to change your mind,” Settle says. If you aren’t eligible to withdraw, another option — “suspending” benefits — might work for you.
- It will cost you. You’ll have to pay back the money you received from Social Security. This includes:
- Monthly Social Security retirement checks you’ve received
- Medicare premiums withheld from benefit checks
- Money that your family, including a spouse or children, received based on your Social Security application
- Income tax withheld from your benefit checks
- Money garnished from benefit checks to make court-ordered payments for child support, alimony or victim restitution, or to repay certain debts you owed to the federal government
- Just one do-over is allowed. Only one withdrawal from Social Security is allowed in a lifetime. Before 2010, things were different. At that time, you could start, stop (repaying what you had received) and restart any number of times. This allowed you to treat Social Security, “basically, (as) an interest-free loan that you could start up again at a higher benefit,” Settle says.
- Your Medicare may be affected. Social Security and Medicare are closely linked. If your Medicare Part B premiums are paid out of your Social Security checks, you’ll have to pay those premiums out-of-pocket after withdrawing. Settle recommends setting up an automatic payment with your bank, since …….