You may have recently been forced to apply for Social Security earlier than planned thanks to an unexpected job loss or other economic hardship, but if you are dreading that decision you should know there are some ways to stop Social Security.
Of course, it’s not a choice to be taken lightly. But talking to a financial adviser can help you create a unique plan for pressing pause on the benefits program.
Let’s look at some ways to stop Social Security, and if it’s the right call for you right now.
Should You Stop Social Security?
The coronavirus pandemic and subsequent economic restart has put a lot of people in a tough spot, and you may have turned to Social Security as a safety net while the economy gets rolling again.
If you’ve managed to get back on your feet with a new job or figured out how to make ends meet without Social Security, one thing you may want to consider is submitting a withdrawal application, also known as a form SSA-521.
Withdrawing from Social Security
There are a few huge caveats to know about using this tactic to stop Social Security. For one, you have to do it within 12 months of being approved for benefits. If it’s been more than a year, you’re out of luck.
You’re also limited to only one withdrawal in your lifetime. This shouldn’t be an issue if you are already on Social Security because the timeline to withdraw doesn’t give you a lot of wiggle room, but it’s good to know about the limit in case you’re taking Social Security soon.
Arguably the biggest aspect of withdrawing is you have to pay back everything you and your beneficiaries received. That includes, per the Social Security Administration:
- Benefits your spouse or children received, whether they live with you or not.
- Money withheld from your Social Security retirement checks for:
- Medicare Part B, Part C, and Part D premiums.
- Voluntary tax withholding (VTW) of federal income taxes for closed tax years. Contact the Internal Revenue Service (IRS) or your tax advisor about any tax implications.
- Garnishments.
Withdrawing is the most drastic way to stop Social Security, and that’s likely why it has such a short time frame attached to it.
If you have been temporarily laid off and know you’ll be rehired, or you have some form of guaranteed income coming in the future, you could apply for Social Security as a kind of loan. Just remember you can only withdraw once.
Suspending Benefits
A less extreme way to stop Social Security is to suspend benefits, but you must be at full retirement age to do so. If you are 62 or 63, and your FRA is somewhere between 66 and 67, you’ve got some waiting to do.
Suspending Social Security after reaching your FRA can be a great way to boost your monthly checks because you earn delayed retirement credits for every month you wait to restart. Your benefits will then increase by two-thirds of 1% for every delayed retirement credit you accrue (8% per year) up to age 70.
If you want to suspend Social Security, it’s as easy as quick phone call to the SSA, and you can have your benefits restarted again at any time. You won’t have to repay anything, but any family benefits will be suspended as well.
If you took Social Security early and want to maybe boost your monthly checks a bit, you could consider suspending benefits for now and restarting when you turn 70.
These are the two most obvious ways to stop Social Security if you regret your filing decision. If you haven’t filed for benefits yet, knowing all the ins and outs means you’ll be more confident when you finally do apply.
• You can find all of the latest and most important news about Social Security here on Money & Markets.
