3 Ways to Get a Do-Over on Social Security, #140
Do you need a redo on your Social Security? If you started collecting your benefits too early or spent the money too quickly: fear not! Your retirement isn’t ruined. On this episode, I’m answering a listener question and discussing three ways you can have a do-over with your Social Security benefits.
You will want to hear this episode if you are interested in...
Can you get a Social Security do-over?[1:34]
The power of delayed benefits [3:01]
How to get a lump sum Social Security payout [5:07]
Back to the drawing board
Choosing when to start collecting Social Security benefits can be tough. Not every answer is right for every retiree. In general, I recommend that single people with a reasonable benefit or the highest-earning spouse in a relationship delay their benefits until age 70. This is because, between full retirement age and age 70, you’re earning an extra 8% credit for every year that you wait to start collecting. But what happens if you don’t wait? What if you’re like one of our listeners who started collecting benefits at 62, but now they have a job offer and are considering returning to work? Thankfully, there are three ways you can get a redo with your Social Security.
Second chances
One way to rewind the clock on Social Security is to pay it all back. Social Security allows you to start over by paying back everything within 12 months of collecting your initial benefits. If your spouse is collecting a spousal benefit off of you, or if you have minor children who receive a benefit, you will have to repay that as well. If you elected to have Medicare Part B or D coverage, those premiums would need to be paid directly because they typically are deducted from your Social Security check.
Usually, people don’t wait until they turn 70 to start collecting Social Security benefits because they are afraid they won’t live until then. The good news is studies show retirees that make it to their full retirement age have a 95% chance of making it to age 70. The other good news is the little-known lump sum option that Social Security recipients have at their disposal. By waiting up to six months after your full retirement age, you can receive a lump sum payment of up to 6 months of benefits. Knowing that you could collect that lump sum at any time if needed can act as a mental safety net while you wait to reach age 70. Listen to this episode for more on getting a do-over with Social Security!
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