3 Radical Moves That Could Make a Major Impact on Social Security

If you've claimed your Social Security benefit and aren't happy with the amount, you aren't alone. Social Security benefits only replace 40% of pre-retirement income, and that ends up coming as a shock to many retirees.

The good news is that you have a couple of options that could make a huge impact on your monthly Social Security check. They require some pretty drastic moves on your part, though. Here's what you can do.

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1. Going back to work after claiming Social Security early

If you've claimed your benefits before your full retirement age (FRA), going back to work is one drastic move you could make to increase your monthly benefit.

There is a work limit that applies when you receive Social Security benefits before FRA. If you won't reach FRA all year, you are allowed to earn only $24,480 before you start losing $1 of annual benefits for every $2 above that limit. If you'll reach FRA sometime during the year but haven't yet, then you lose $1 for every $3 in benefits once your income exceeds $65,160.

When you lose benefits due to working too much, the Social Security Administration (SSA) stops paying monthly checks based on earnings. But that's actually not a bad thing. You get credit for early-filing penalties that reduced your Social Security check due to your early claim. Then, at FRA, your benefit is recalculated to make up for the missed income.

Working enough to cancel out your early-filing penalties could drastically increase the Social Security checks you receive in the future -- especially given that a claim at 62 when your FRA is 67 shrinks your checks by 30%.

Plus, if you work and earn more than you did in the past, you can also increase your benefit because your Social Security is based on your 35 highest-earning years (adjusted for inflation). If your new high income can replace some years of lower income that were previously included in your formula, your benefit will grow even bigger.

2. Rescinding benefits after a claim

Rescinding benefits is another drastic move to consider if you aren't happy with the size of your Social Security check. You can rescind benefits if you claimed them less than 12 months ago. This essentially means asking for a do-over on your benefits claim.

The catch here is that you have to pay back any benefits on your work history, including those you were collecting, as well as any spousal benefits that may have been paid out. That could mean paying back thousands of dollars. Still, this may be worth doing if you find that you'd prefer to get a larger benefit later than to stick with the smaller benefit you claimed.

3. Suspending your benefits

Finally, the last drastic step to consider involves suspending your benefits.

This is an option if you have reached FRA. It essentially pauses your ability to collect future Social Security checks. It also pauses any benefit payments going to others in your work history. But it doesn't require paying back benefits already collected.

Suspending benefits can make a huge impact, too. Say, for example, you were collecting benefits totaling $1,500 per month, but you suspended them at your FRA and didn't claim again until 70. You'd be entitled to three years of delayed retirement credits applied to your reduced benefit and could increase that payment by 24% or $360 per month for life.

All of these options require sacrifice, but the payoff can absolutely be worth it if you want to increase the money you're collecting from Social Security and have more stability throughout the rest of your retirement because of it. Consider these approaches as part of your future retirement planning to see if they'll work for you.

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