It is common for individuals to have a change of heart regarding decisions made when transitioning to retirement. It might be the fact that you are not ready for early retirement, you were overconfident that you could retire, you desire to reenter the workforce, or you prefer to delay receiving retirement until full retirement age. This article will navigate the process of how to reverse course on when social security payments commence.
How to withdraw a previously filed Social Security retirement application
Once you are entitled to retirement benefits, you will generally have a period of 12 months to withdraw your application. Please keep in mind that this request can only be carried out once, and you must request in writing to formally withdraw the application. In addition, any benefits that might have already been received will need to be returned to the Social Security Administration (SSA). Those benefits to be returned include money withheld for Medicare premiums, benefits received by family members and money withheld for voluntary tax withholdings. The process starts with filing Form SSA-521, Request for Withdrawal of Application, with a local Social Security Office. The SSA will then notify the individual when they have made a decision regarding your request; and if such request was granted, they will instruct the individual to pay back any identified money previously received. If the individual has a change of heart and wants to rescind a granted request for withdrawal of application, they will have 60 days to cancel the approval.
What happens if your request for withdrawal is denied by the SSA, or you have passed the 12-month submission requirement?
Another option exists if you have reached full retirement age but are not yet 70 years old, you can request that the SSA suspend your retirement benefits. By suspending your benefits, you will earn delayed retirement credits for each month your benefits are suspended; thereby increasing your benefit payments when retirement benefits resume. Benefits will resume automatically when you reach the age of 70, or when a formal request is made for payments to resume. The effective date of voluntary suspension of benefits will not occur any earlier than the month after the suspension request. When the benefits are suspended, the individual must pay the Medicare Part B premiums directly if enrolled in such coverage. Note that late payment of Medicare Part B premiums could result in loss of coverage. Lastly, those who suspend retirement benefits will also suspend Supplemental Security Income (SSI) benefits, making the individual ineligible for SSI.
Part II of this Social Security Benefits article will appear in a future issue of our newsletter. Click here to sign up to receive future issues of our quarterly newsletter.
For more information on this topic, contact Joseph Becht, CPA, CGMA, Senior Manager, Tronconi Segarra & Associates LLP at 716.633.1373 or email@example.com.