A report featured in The Motley Fool, a financial news website, dealt with options for retirees if they claimed their Social Security benefits too early.
How Claiming Your Social Security Benefits Too Soon Can Hurt You
The earliest you can collect your Social Security retirement benefits is age 62. However, claiming it at that age is considered early retirement. The full retirement age according to the Social Security Administration (SSA) is 66 or 67. The reason why claiming your Social Security benefits too soon can hurt you is because it can limit your annual retirement income for the rest of your life.
For instance, per a CNBC report, a person’s Social Security income could increase by anywhere from 20 to 35 percent from age 62 to age 67. This means that if you start collecting benefits at 62 instead of 66 or 67 you could receive 20 to 35 percent less than you would have if you had waited.
Options If You Claimed Your Social Security Benefits Too Early
Per the report in The Motley Fool, if you started collecting Social Security benefits too early, you may be able to stop receiving benefits and start over when you are full retirement age. If you applied for benefits less than a year ago, you can simply file a form with the SSA canceling your application. Then all you have to do is reapply when you are 66 or 67 to receive your full benefit amount.
Another option is for those who claimed their Social Security benefits early but have already reached their full retirement age of 66 or 67. If you fall under this category, the SSA will allow you to suspend your benefits. Then for every year that your benefits remain suspended your future Social Security payments will increase by 8 percent. For example, if you suspend your Social Security payments at 67 and then resume them at 70, then your monthly payments will be 24 percent higher going forward.
If you are considering canceling or suspending your Social Security retirement benefits, you should speak with an experienced Social Security attorney first. A lawyer can review your situation, answer your questions and tell you your options.
In the video below, Tulsa Social Security Disability attorney Steve Troutman explains how people with lower incomes can afford to hire a lawyer.