Your client has claimed their Social Security benefits – but now, they regret it. Life circumstances change; maybe the client’s financial picture has improved. No matter the reason, there’s good news: Recipients can “unclaim” their benefits – withdraw their application for Social Security, in other words, and stop receiving benefits.
Beth Blecker, founder, CEO and managing partner of Eastern Planning, says this can sometimes make sense if a bigger payout could come down the road. She gives a scenario by way of example.
“If the client began claiming at age 62 and can pay it back within one year, he or she may wish to do so because he or she is still then able to get the 8 percent increase per year through age 90,” she said.
Once an individual elects to withdraw their claim, they’re required to immediately repay the amount they’ve received to date.
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“You don’t have to pay interest on the amount, but the entire amount must be immediately paid back to the Social Security Trust Fund,” says David Peterson, managing director at United Capital.