Claimed Social Security at 62? This Little-Known Rule Could Help You Avoid a Major Cut to Your Monthly Benefits.

Source The Motley Fool

There's a reason so many people rush to file for Social Security at 62. That's the earliest age you're allowed to sign up for benefits. And it's easy to see why many folks would rather get their money sooner rather than later.

Of course, claiming Social Security at 62 means settling for a reduced benefit. You're not entitled to your entire monthly benefit based on your personal wage history until full retirement age arrives. That age is 67 for those born in 1960 or later.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. See the 10 stocks »

A Social Security application being filled out.

Image source: Getty Images.

Here's the problem, though. Let's say you claim Social Security at 62 and leave your job at the same time, but once you're in the throes of retirement, you realize your monthly expenses are higher than you thought they'd be. At that point, you're sort of stuck because you've already locked in your lower monthly Social Security payday for life.

Or have you?

Believe it or not, there's a lesser-known rule that allows you to undo your Social Security filing and claim benefits again at a later age. But pulling it off is easier said than done.

Are you eligible for a do-over?

The Social Security Administration (SSA) won't allow you to file for benefits, undo your claim, and keep repeating that process over and over again. However, the SSA does give all filers one do-over in their lifetime. So, if you've filed for Social Security at 62 and now regret it, you're not necessarily out of luck.

But undoing your filing also isn't so easy. Granted, it's not so hard to withdraw your application for benefits. You simply download a form and mail it in to your local Social Security office.

Rather, the hard part is that to undo your filing, you also have to repay all of the money the SSA paid you in benefits. You have to withdraw your application and repay those funds within 12 months of your filing date.

The latter could get tricky because, let's say, you realize six months into your Social Security claim that you filed too soon and that you'd like to get a chance to sign up at a later age for a more generous benefit. Well, what if you've already spent the money the SSA paid you to date? That only gives you six months to come up with the funds before you're out of time.

So, if you like the idea of undoing your Social Security claim, before you start downloading the right paperwork, you'll need a game plan. That could involve going back to work part-time or even tapping your home equity to come up with the funds to repay the SSA. You have options -- they just may not be optimal.

Think carefully before you claim Social Security in the first place

It's a nice thing that Social Security recipients are allowed one do-over in their lifetime. But a better bet is to choose the right filing age from the start so you don't end up in a position where you have to worry about repaying any benefits you receive.

Your earnings statement, which you can access by creating an account on the SSA's website, should show you what your monthly benefit will look like based on whether you sign up early, on time (meaning, at full retirement age), or late. Try estimating your monthly retirement costs before signing up for Social Security so you know what minimum payday you need to cover your basics.

And also, think about what you want your retirement to look like. If you don't want to be pinching pennies, it could pay to wait beyond age 62 to claim Social Security, even if you can technically get by with a reduced benefit.

Finally, you may not want to wait all the way until full retirement age to start getting benefits. But there's a big difference between claiming Social Security at the earliest age of 62 versus 64 or 65. So, think through the big picture carefully before making your choice.

The $22,924 Social Security bonus most retirees completely overlook

If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $22,924 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

View the "Social Security secrets" »

The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
What Crypto Whales are Buying For May 2025Crypto whales are making bold moves heading into May 2025, and three tokens are standing out: Ethereum (ETH), Artificial Superintelligence Alliance (FET), and Onyxcoin (XCN).
Author  Beincrypto
Apr 21, Mon
Crypto whales are making bold moves heading into May 2025, and three tokens are standing out: Ethereum (ETH), Artificial Superintelligence Alliance (FET), and Onyxcoin (XCN).
placeholder
Gold price snaps selling off after fresh Trump comments on tariffsGold price (XAU/USD) is turning positive, recovering above the $$3,300 level at the time of writing on Thursday after two days of firm selling pressure since it topped at $3,500 on Tuesday.
Author  FXStreet
Apr 24, Thu
Gold price (XAU/USD) is turning positive, recovering above the $$3,300 level at the time of writing on Thursday after two days of firm selling pressure since it topped at $3,500 on Tuesday.
placeholder
Gold price surges past $3,300 on trade jitters, yield slump reviving haven demandGold price snapped two days of losses on Thursday and rose $50, or more than 1.50%, amid renewed concerns about the US-China trade war.
Author  FXStreet
Yesterday 03: 51
Gold price snapped two days of losses on Thursday and rose $50, or more than 1.50%, amid renewed concerns about the US-China trade war.
placeholder
Gold price consolidates in a range; bulls have the upper hand while above $3,300Gold price (XAU/USD) struggles to capitalize on the previous day's move higher and oscillates in a narrow trading band during the Asian session on Friday amid mixed fundamental cues.
Author  FXStreet
Yesterday 03: 53
Gold price (XAU/USD) struggles to capitalize on the previous day's move higher and oscillates in a narrow trading band during the Asian session on Friday amid mixed fundamental cues.
placeholder
Gold edges down amid clash over status of US-China trade talksGold price is on the back foot on Friday, almost erasing all of Thursday’s gains, and looks set to close off this week in the red.
Author  FXStreet
20 hours ago
Gold price is on the back foot on Friday, almost erasing all of Thursday’s gains, and looks set to close off this week in the red.
goTop
quote