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Can I stop my Social Security & restart later?

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MoMo Productions/Getty Images

Have you begun to second guess your decision to start taking Social Security benefits? There are several reasons that may cause you rethink your timing, including:

  • You retired in a bad economic climate, but now the economy is rebounding and you want to work again to avoid running out of money in retirement.
  • Your employer may have offered you early retirement incentives, but you realize you'd actually like to continue working, even if it's for a different employer.
  • You may have received a financial windfall and you no longer need your Social Security benefits to live comfortably.
  • You may have realized you can manage your expenses without a Social Security check each month and would rather have a larger payment later down the road.

So, can you stop Social Security and restart later? The short answer is yes. But there are some caveats. We’ll review the two options that the Social Security Administration offers if you're reconsidering your timeline for taking Social Security benefits.

Options for stopping & restarting Social Security

If you want to stop your Social Security benefits and restart later, there are two options to consider: withdrawing your benefits and suspending your benefits.

Option 1: Withdrawal of benefits

Withdrawal of benefits is available only in the first 12 months after you become eligible for Social Security benefits. That means this option is available only before you've reached full retirement age. It is a one-time option; you cannot do it again later.

In addition, you'll have to pay back in full the amount you've been paid. Think of this process as a true Social Security do over. Be aware that if you withdraw your benefits, your family members (including ex-spouses living outside your home) will no longer receive benefits, and all received benefits will need to be paid back. It truly will be as if you hadn't applied for benefits at all.

Calculate how much you've received in benefits so far, including any benefits paid to your children or spouse and withholdings for Medicare premiums to get a sense of what you will owe back.

When to consider the withdrawal of benefits option

Withdrawing your benefits can be helpful if a new source of income or work emerges soon after your retirement, particularly if you took benefits at a fairly young age. The next time you apply, you'll be older and have a correspondingly higher monthly payment, which can help you get the most out of Social Security.
 
For instance, let's say for a 62-year-old who was born after 1960, the retirement benefit would be 30% less for retiring at 62 compared with the full retirement age of 67. And if they waited until 70, they'd receive 124% of their full retirement age benefit. The difference between 70% and 124% of your benefit can amount to hundreds of dollars a month. Choosing a Social Security do-over can be a wise financial choice if you can support yourself without Social Security until an older age. 

Be aware, however, that if you choose to withdraw benefits, you should be confident with your decision: You'll only have 60 days to cancel the withdrawal request if you change your mind again and realize you need to keep receiving the benefits. Failing to cancel in time means you'll have to reapply for benefits; the process could take a while, and you could miss some payments.

Option 2: Suspension of benefits

Suspension of benefits is only available if you've reached full retirement age. It means you will stop receiving monthly payments until you reinstate them. Unlike withdrawal, you don't have to pay back any prior benefits, and this can happen even if you have been retired for several years. If you've found a new source to make money in retirement, for example, it could make sense to suspend your benefits.

When to consider the suspension of benefits option

The benefit of this approach is that each suspended benefit month earns you "delayed retirement credits" that will increase your benefit when you eventually reinstate them. If you don't reinstate them yourself, they automatically will be reinstated the month you turn 70. Each monthly payment will be higher than the payments you received before suspending benefits.

Unlike withdrawal of benefits, if you suspend your benefits, your family members won't have to pay benefits back. But they also won't receive more benefits until you reinstate them. An exception is for divorced spouses, who can continue to receive benefits even if you've suspended them.

How withdrawing or suspending Social Security impacts Medicare

Your eligibility for Medicare usually isn't affected by withdrawing or suspending your Social Security benefits. However, premiums for Medicare are withheld from your monthly Social Security check. It's important to calculate how much your premiums will be after you choose a Social Security do over because any premiums will need to be paid out of pocket instead of from your Social Security benefit.

If your reason for withdrawing benefits is that you're going back to work, you'll want to evaluate your employer-provided health care options. Employer-provided health care coverage can vary in how comprehensive it is and how much it costs you per month, so you'll want to weigh which plans you are eligible for against any benefits and premiums you might have through Medicare. It makes sense to choose whichever option is the best fit for your unique needs.

Work with a financial advisor on timing your Social Security benefits

Either option of stopping and restarting Social Security benefits has trade-offs. It's usually the loss of some income now in exchange for a larger monthly payment in the future. Your local Thrivent financial advisor can discuss how this change will affect you and help you consider optimal timing of your Social Security benefits.

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Thrivent financial advisors and professionals have general knowledge of the Social Security tenets. For complete details on your situation, contact the Social Security Administration.
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