Have you been receiving Social Security retirement benefits but have a change of heart and wish to reverse your decision? Whether it’s due to a new job opportunity, boredom with retirement, or financial needs, there are options available in these situations. This post explores two avenues for reversing Social Security retirement benefits and provides important considerations.
Withdrawing a Social Security Retirement Application
Within 12 months of becoming entitled to retirement benefits, you can withdraw your Social Security application. This can only be done once. To withdraw the application, a written request must be submitted, and everyone receiving benefits based on the application must consent in writing. Any benefits received, including those by family members, Medicare premiums, tax withholding, and garnishments, must be repaid. Form SSA-521 is used to request the withdrawal from a local Social Security office. You have 60 days to cancel an approved withdrawal if you change your mind.
For example, Beth retired early at 64 and 7 months later realized she would receive higher monthly benefits if she waited until her full retirement age. Within 12 months of approval, Beth decided to reverse her retirement decision, repay the benefits received, and file Form SSA-521 to rescind her application.
Voluntary Suspension of Retirement Benefit Payments
If you have reached full retirement age but are not yet 70, you can request a voluntary suspension of retirement benefits. This allows you to earn delayed retirement credits, resulting in higher benefit payments when you resume receiving benefits. The suspension period lasts until you reach age 70 or earlier if requested. Others receiving benefits on your record, except for divorced spouses, will not receive benefits during the suspension period. Suspended benefits can be reinstated the month after the request is received. Medicare Part B premiums must be paid directly during the suspension period.
Important Considerations
- If 12 months have passed or the withdrawal request is denied, options may be limited.
- Suspending retirement benefits may affect others receiving benefits based on your record, except for divorced spouses.
- Suspension of benefits also suspends benefits received on someone else’s record.
- Medicare Part B premiums must be paid directly during the suspension period.
- Suspension of retirement benefits may make you ineligible for Supplemental Security Income (SSI).
If you regret your decision to start collecting Social Security retirement benefits, you have options to reverse your choice. Withdrawing a Social Security application within 12 months is possible, while voluntary suspension of retirement benefits is available if you have reached full retirement age but not 70. It’s important to consider the implications of these options and seek guidance from your tax preparer or financial advisor to understand how your choices will impact your retirement benefits and tax liabilities.
How to reverse course on collecting Social Security – Journal of Accountancy
