MYTH: Once you start receiving Social Security income you cannot change your mind.
Many people believe this to be true but the reality is quite different. There is a 12-month window, once you start collecting Social Security benefits, in which you can indeed change your mind.
During this grace period, you can decide to delay benefits in order to increase the amount you will eventually receive each month. You’ll have to pay back the full amount that you received in Social Security income before you can start the clock again, but in most cases it’s worth it.
Almost 50% of Americans choose to start collecting retirement benefits from Social Security at the age of 62. That locks in a permanent reduction of 25-30% over the amount they could receive if they delayed benefits until their full retirement age.
Your full retirement age varies based on the year you were born. Each year you delay benefits past retirement age will yield 8% in annual increases – up to age 70, that is. At 70 everyone has to start collecting benefits, with no increase for continued waiting.
Since the annual Social Security cost of living increase is a percentage of your previous benefit amount, delaying the time you start benefits will mean even more in retirement income once you decide to claim Social Security.
If you thought you needed to take your Social Security benefits early but things change, or you realize that you can afford to wait after all, it’s a good idea to stop the clock, repay what you’ve received and wait until your full retirement age – or age 70, if possible. After all, you’ve paid into Social Security to earn these benefits. You might as well collect as much as possible from the program.
Not associated with or endorsed by the Social Security Administration or any other government agency.