As I have previously written, the simplest way to boost your Social Security earnings is to simply wait to take your payouts from the government. Each additional year you wait to take your payout adds 8% to your Social Security checks, up to a maximum of 24%.
And with the economy being the way that it still is, I know that tons of people out there hitting age 62 have decided to take their payments sooner as opposed to later, even though this can cause your payouts to decrease significantly. The reasons vary from the loss of a job to just not being able to make ends meet.
But regardless, this decision to take Social Security early could have dramatic long term consequences for your payments from Social Security as you age.
For that reason, more and more people are looking for a way for a way to reverse this earlier decision and, after having started to take the earlier payments, now wish to cancel this. And there are a few ways to do this…
Request for Withdrawal
There is a form you fill out from the IRS that allows you to opt out of your early payments within 12 months of originally claiming benefits. If is necessary for you to pay back all of previously paid benefits to Social Security, including any spousal benefits paid out. But this certainly is one way, and probably the simplest, to overcome your “buyer’s remorse” from taking your Social Security early.
Suspend Your Benefit Payments
This one is best utilized by couples, but it involves suspending your payments until you hit your normal Social Security age. In this scenario, you don’t pay back the funds that you received from the government.
Instead, you end up earning delayed retirement credits at the 8% a year rate until age 70. In this way, you can end up with your full benefits, or even a little more, without paying back the earnings you have already received from the government.
One Spouse Now, The Other Later
With this idea, the older spouse (typically the husband) will take their benefits now. This helps the couple survive financially right now. The younger spouse delays their payouts until age 70 so they can receive the maximum 24% addition to their social Security payments.
This simple idea really encompasses the best of both world’s…getting your money now and later.
The problem with giving advice on this type of financial topic is that everybody’s situation is different. What is good for one person isn’t necessarily good for another. That’s why before making any financial decision I would recommend getting proper financial advice from your financial adviser, CPA or an elder law attorney before making a decision like this.