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A podcast designed to help retirees and those nearing retirement navigate finances and life planning with expert insights from financial advisor Trevor Lawson. Tune in for practical strategies and inspiring ideas to ensure your retirement years are purposeful, fulfilling, and truly your best chapter yet.
*Securities and investment advisory services offered through Osaic Wealth, Inc. member FINRA/SIPC. Osaic Wealth is separately owned and other entities and/or marketing names, products or services referenced here are independent of Osaic Wealth. Branch phone: 919-546-0400.
Trevor Lawson: [00:00:00] Welcome to The Retirement With and On Purpose Podcast. I'm your host, Trevor Lawson, and this show is all about helping you not just reach retirement. But truly thrive in it. You've put in the work. Now let's make sure you can enjoy every moment to the fullest.
Today's episode is all about social security and more specifically social security. Do-overs. Many of you, myself included, uh, until recently may be unaware that you are. Able to change your mind. So there's two, two ways you can change your benefit claim once you start Social Security. And we're gonna talk about what that looks like today.
So most people still, despite seeing, uh, a lot of [00:01:00] articles and calculators out there showing how. Waiting oftentimes gives you more from social security. Most people st tend to still start their social security benefit before full retirement age. And the main reason for that is because they fear that social security is going to go away at some point.
And recently, with all the, the noise around social security and how it could could change over time, there's. You know, more fuel to that fire to start it early. But sometimes people will start their social security early prior to their full retirement age and end up going back to work. And if they earn more than a certain amount, they're charged a penalty by social security until they reach full retirement age.
We're gonna talk about those two do-overs and the inspiration for, for today's podcast is from a. Article back in May from Military Officer Magazine. [00:02:00] So, um, I'll link to it in the show notes for for more details. But if you are one of those people that happen to start Social Security early, or thinking about starting it early and you happen to stumble into a, a job, um, after you've started Social Security that you just can't turn down or frankly, you've gotten bored and are ready to go back to work, here's your two opportunities to.
Do over your social security. So one is a withdrawal of benefits, so you can cancel your benefit application up to 12 months after the Social Security Administration approves your benefit. You can only do this once in your lifetime. So if you've received payments and you're within that initial 12 month period, you'll have to repay them as well as any money that was withheld for taxes or payments made to your spouse, children, or, or Medicare.
So that withdrawal of benefit option, um, is, is available during that first 12 month, [00:03:00] month period. And once you withdraw your benefit, it's as if you never filed in the first place. Your potential benefit will continue to grow and you can refile for benefits at a later date. If you wait until your full re retirement age to file, you will receive your full benefit.
If you wait beyond your retirement age, your benefit will continue to grow by 8% a year until you reach age 70. So that's one option. Withdrawal your benefit if you're in the first 12 months of initially receiving it. The second option is to suspend your benefit. If you took benefits before your full retirement age, and you have now reached full retirement age, but are not yet 70 years old, so you started it before full retirement age, you've reached full retirement age but aren't yet 70 years old.
You can suspend your benefit and earn delayed retirement credits for each month. They are suspended until you reach 70 years of age. So for each month between full retirement age and 70, your benefit increases by. Point six six, [00:04:00] 6% or the 8% annual rate, that's in addition to any cost of living adjustment.
There might be. So again, this is, this is worth noting, especially for those who end up deciding to take on a job. In, in, in their, what were supposed to be their retirement years, and they don't necessarily need their social security income or the social security income is just being turned around and, and put in their savings account That's earning a very low interest rate.
Why not think about suspending that benefit? Let it grow by the 8% deferral rate that you get by waiting on social security each year and then start it again later. But that's it for today. That's, um, just food for thought for those out there that are, you know, thinking about retiring earlier that have already retired but may want a, a mulligan when it comes to their social security, those are two options for, for exercising that mulligan when it comes to social security.
I hope you found this helpful [00:05:00] and I'll look forward to being with you again soon for. Another topic that'll likely center around 4 0 1 Ks and the ins and outs of 4 0 1 Ks in retirement. Take care.
Thanks for tuning in to the Retirement With and On Purpose podcast. I hope you're walking away with new ideas and a fresh perspective on how to make the most of your retirement journey. And remember, retirement isn't the end. It's your time to live with purpose. Until next time, I'm Trevor Lawson. Here's to a fulfilling and thriving retirement.