There are millions of American citizens who rely on Social Security as a vital source of their income. Once they start collecting benefits and if it’s claimed before Full Retirement Age (FRA), people believe that their benefits are reduced permanently.
However, it’s important to remember this isn’t entirely true. Deep down in the Social Security rule book is an option referred to as the “do-over” option. This is a one-time opportunity to cancel your claim and start collecting again at a later stage, potentially undoing that cut completely.
It’s called the Withdrawal of Application, and it’s one of the most powerful tools the Social Security Administration (SSA) offers.
The Secret ‘Do-Over’ Rule Explained
The Withdrawal of Application rule allows anyone who has started collecting Social Security to withdraw their claim within 12 months of their first payment.
The government then erases your record, making it appear as though you never filed in the first place. You may reapply later, ideally when you’re older, and get a considerably larger monthly benefit.
The one major condition is that you have to repay all the money you’ve received so far, including any benefits paid to a spouse or dependents based on your claim.
Why the Rule Exists
The rule was initially introduced to help retirees who claimed benefits early, perhaps by mistake or because they didn’t understand the rules at the time.
It has developed into a useful “safety net” for those who later regret making an early claim. Many people are unaware of how much more they may get by waiting a few years, and this rule allows them to correct that mistake before it becomes irreversible.
Because the SSA has so many rules, the one sometimes gets pushed under the carpet and not many are aware of it.
How to Use the Do-Over Option
If you want to take advantage of this rule, the process is simple but requires careful planning.
- Submit Form SSA-521
- Make sure you repay all benefits you’ve received
- Wait for approval from the SSA.
- Reapply when ready.
Key Rules to Keep in Mind
Before you rush to request a do-over, remember these important details:
- It’s important for you to remember that you are only allowed to do this one time.
- Make sure you act within 12 months. You must file the withdrawal request within a year of your first claim.
- You must repay all benefits.
- No interest or penalties.
Once this is approved, you can thereafter reapply for your benefits when you are ready.
Why a Do-Over Can Be Worth It
Many financial experts refer to this as the Social Security reset. People must be sure to use this rule wisely. It’s important to remember that this do-over rule can turn a small monthly benefit into a much larger benefit later on.
If you live well into your 80s or 90s, that higher monthly amount could add up to tens of thousands of dollars in extra income.
The Bottom Line
There are millions of American families who live on fixed incomes and rely on Social Security benefits for their essential expenses. Claiming Social Security benefits is important but knowing when to claim is even more important. Thanks to this rule, if you have made a mistake, you are allowed to withdraw your application but just remember that it’s only allowed one time.
If you claimed too early or your financial situation has changed, you may still have a chance to start fresh and boost your lifetime benefits.
Make sure you follow all the rules and understand what is expected of you before making an application.