I’ve applied for Social Security. Can I change my mind?
Rick Fingerman, CFP?, CDFA?, CCPS?, CBDA
? Helping Women in Transition ? Passionately Creating Financial Wellness for Recently Widowed or Divorced Women? and empowering those seeking a more secure financial life.
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During Thanksgiving this past year, Melinda* was chatting with her brother-in-law and since she was newly divorced, he recommended she start taking Social Security.
Was this good advice? No.? First, even though her brother-in-law may have had the best intentions, if one doesn’t know the rules, they shouldn’t be giving advice.
And, even if he worked for Social Security, was a Certified Financial Planner? practitioner, or was just really well versed on this topic, giving financial advice without knowing someone full financial picture, generally is not recommended.
Okay, first some rules:
1.??? If Melinda was at least 62, she could be eligible to apply for Social Security
2.??? If Melinda had been married for at least ten years, divorced for at least two years, and was unmarried, she may be eligible to collect on her ex spouse’s work history
3.??? If Melinda is under her Full Retirement Age for SS (in her case age 67) and still working, she could be subject to the earnings test which would take back benefits if earning above a certain limit
In Melinda’s case, she was just over 62 but not divorced for more than two years.?
Therefore, she applied under her own work record.? However, she was working and earning well over the Earnings Test limit of $21,240 in 2023.
Social Security would hold back $1 for every $2 she earned above the $21,240 limit.
So, what options does Melinda have?
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The Social Security Administration does allow an individual a once in a lifetime “do over”. This rule applies to those that are single, divorced, or married.
In the first 12 months of receiving benefits, one can request a withdrawal of benefits.
Melinda would need to pay back what she had received but then could reapply later on.
In her case, it would most likely make sense to wait until either she stopped working or her income dropped to a level where the Earnings Test would no longer apply.
Every situation is different, so it is highly recommended one sit down with a Certified Financial Planner? practitioner that is well versed in this area.
*Name has been changed
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Financial Planning Solutions, LLC (FPS) provides this blog for informational and educational purposes only. Nothing in this blog should be considered investment, tax, medical, or legal advice. FPS only renders personalized advice to each client. Information herein includes opinions and source information that is believed to be reliable. However, such information may not be independently verified by FPS.