Changing Your Mind About Delaying Social Security Retirement

Waiting to collect Social Security retirement benefits doesn't have to be a permanent decision – if you suspend your benefits.

If you claim but suspend your own retirement benefit payments when you reach full retirement age, you can later choose to begin collecting them at any time simply by notifying Social Security. What happens if you delayed collecting retirement benefits until after full retirement age, but at some point before age 70 your finances suddenly change for the worse, or you become seriously ill and your life expectancy greatly shrinks? A special Social Security rule allows you to “undo” your earlier decision to delay collecting benefits.

Delaying Retirement Benefits

First, some background. Relatively few people delay claiming their Social Security retirement benefits until after they reach full retirement age (currently 66). But if you can hold off, waiting can really pay off, because for each year you wait to collect, up to age 70, your retirement benefits will be permanently increased by 8%. But delaying retirement until age 70 makes sense only for those in good health; it doesn't make sense for those who aren't likely to live past age 70 or so. Of course, it's hard to foresee the future, and the majority of people end up claiming benefits by age 65, either because they need the money or they think they can collect more Social Security benefits in total by collecting a smaller amount earlier rather than a large amount later. You can find out which makes more sense for you by asking Social Security for your break-even age, the date after which you will start earning more money in cumulative Social Security benefits if you delay rather than claiming at age 62. For many people, this date is in their late 70s or early 80s.

Changing Your Mind

If you decide to delay collecting Social Security until after your full retirement age, you can reverse this decision if you become ill and either need the money right away or expect to die sooner than you had hoped…but only if you plan ahead.

Those who claimed benefits at full retirement age but "suspended" collecting them before April 30, 2016 can reverse the suspension at any time before age 70 and request a lump sum equal to all the retirement payments they would have received if they had actually begun collecting benefits at full retirement age. (And the amount of their ongoing monthly benefits would permanently return to the amount they would have been at full retirement age.)

While those who suspended collecting their benefits after April 30, 2016 can still "undo" their suspension of benefits and begin collecting them, they will be able to collect only those benefits they are entitled to beginning with the month after they file their request to undo the suspension. Benefits they might have collected during the suspended months may not be collected retroactively.

How to Reverse Your Suspension of Social Security Benefits

Contact Social Security to undo your suspended claim. Social Security calls reversing your suspension of retirement benefits a "reinstatement" of your benefits.

Based on an excerpt from Social Security, Medicare & Government Pensions: Get the Most out of Your Retirement & Medical Benefits, by Attorney Joseph Matthews.

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