The One-Year Rule for Withdrawing Social Security Benefits Explain

Social Security benefits can start as early as age 62, but waiting until 70 can get you the maximum monthly payment. However, not everyone finds it financially practical to wait. What if you’ve already applied for benefits and suddenly come into unexpected funds, like an inheritance, or decide to keep working full-time? You may have the option to withdraw your application if you’ve been receiving benefits for less than a year.

Let’s explore why someone might withdraw their Social Security application, how the process works, and what you need to know before making a decision.

Why Withdraw Your Social Security Application?

There are a few key reasons to consider withdrawing your Social Security application:

1. Improved Financial Situation
   If you land a high-paying job or receive unexpected money (like an inheritance or lottery win), you may no longer need Social Security benefits right now. In such cases, continuing to receive benefits could result in a reduced monthly payment or suspension.
2. Changing Your Mind
   Some people decide they’d rather wait and claim benefits later for a larger monthly payout. Waiting until full retirement age or even 70 can significantly boost the amount you receive.

How Long Do You Have to Withdraw?

You have up to one year from the date you received your benefit approval letter to withdraw your application. If you change your mind shortly after applying, you can even submit a withdrawal request before approval.

However, this option comes with restrictions:

• One-time Withdrawal: You can only withdraw your application once.
• Time Limit: If you’ve been receiving benefits for more than a year, withdrawing is no longer an option.

If you’ve reached full retirement age but are under 70, you can ask the Social Security Administration (SSA) to suspend your benefits instead.

What Happens When You Withdraw?

If you withdraw your Social Security application before approval, there’s little to worry about. But if you’ve already started receiving benefits, things get more complicated.

You’ll need to pay back everything you’ve received to reset your benefits. This includes:

• Payments made to you, your spouse, or children, even if they don’t live with you.
• Deductions for Medicare premiums, taxes, or garnishments.

If you’ve been receiving Medicare benefits, you can choose to keep them or withdraw from Medicare as well. If you keep Medicare Part B, you’ll need to make payments to The Centers for Medicare & Medicaid Services (CMS) separately.

Withdrawing vs. Suspending Benefits

While withdrawing and suspending Social Security benefits sound similar, they are quite different:

1. Withdrawing Benefits
   • Can be done at any age within one year of approval.
   • Requires repayment of all benefits received.
   • Includes withdrawing your application entirely.
2. Suspending Benefits
   • Available only after reaching full retirement age.
   • No repayment required.
   • You can pause benefits and restart them later.

If you’re eligible for suspension, you don’t need to fill out a form—just call the SSA, and they’ll handle the process for you.

How to Withdraw Your Social Security Application

If you decide to withdraw your application, here’s how to do it:

1. Download Form SSA-521
   Get the “Request for Withdrawal of Application” form from the SSA website.
2. Fill Out the Form
   • Provide the reason for your withdrawal request.
   • If you’re receiving Medicare, state whether you want to keep it or withdraw.
3. Submit the Form
   • Send the completed form to your local Social Security office.
   • If you need help, call the SSA at 1-800-772-1213.

After submitting your request, the SSA will review it and notify you of their decision. They’ll also inform you of the total amount you need to repay.

Important: Once your withdrawal is approved, you have 60 days to change your mind and cancel the withdrawal request.

Key Takeaways

• Withdrawing your Social Security application can provide a fresh start if your financial situation improves or you decide to delay benefits for a higher payout.
• The process has a one-year time limit and requires full repayment of all received benefits.
• Suspending benefits might be a better option if you’re eligible and want to avoid repayment.

If you’re considering withdrawing your Social Security application, weigh your options carefully and consult a financial advisor if needed.

Disclaimer – Our team has carefully fact-checked this article to make sure it’s accurate and free from any misinformation. We’re dedicated to keeping our content honest and reliable for our readers.