This Little-Known Social Security Rule Could Boost Your Lifetime Benefits, but Too Many Retirees Miss It

When it comes to claiming Social Security, it's important to get your timing right. That's because your filing age has a direct impact on the monthly benefits you're paid.

If you claim Social Security at full retirement age (FRA), which is 67 for anyone born in 1960 or later, you're awarded the monthly benefit your earnings history renders you eligible for. But if you file earlier -- which you can do starting at age 62 -- your monthly benefit will typically be permanently reduced.

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In some cases, though, that may not happen. Thanks to a little-known rule, it may be possible to boost your Social Security benefits after claiming them early. But it's important to know how the rule works so you can take advantage of it.

How the do-over rule works

The decision to file for Social Security carries a lot of weight. If you make what you feel is the wrong filing decision, you're allowed to undo your claim once in your lifetime. But there are rules to follow.

First, you must withdraw your application for Social Security benefits within 12 months of filing for them. You also have to repay every dollar you received in Social Security. Depending on when you decide to exercise your do-over option, that could end up being a significant sum of money.

However, if you have the means to repay your benefits and regret filing early, Social Security's do-over option is a lifeline. It allows you to reset your claim, file at a later age, and lock in substantially larger checks for the rest of your life.

Not only can you wait until full retirement age to claim Social Security after exercising your do-over option, but if you so choose, you can delay your claim beyond that point. Each year you hold off on Social Security beyond full retirement age until age 70 boosts your monthly checks by 8%.

An option that could make a huge difference

Social Security's do-over rule isn't so well-known, so this may be the first time you're hearing about it. But if you claimed Social Security early and now regret that decision, you may still have a window to withdraw your benefits application, repay the money you received, and start fresh in a few years.

Of course, you'll need to make sure you can generate enough income to take the place of the Social Security benefits you'll be stopping. That could mean having to return to work. But if you're willing and able to do that, you may find that undoing your Social Security claim puts a lot more money in your pocket on a lifetime basis and spares you a world of financial stress.

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