With a rapidly growing aging population, securing Social Security funds is now more crucial than ever. But how did we get here in the first place?


Social Security offers the choice to take the benefit as early as age 62 —an option that may appeal to more older Americans given high rates of unemployment in the pandemic. But some people may regret that decision if they resume working as the economy improves. Luckily, they may be eligible for a do-over.

Recessions and a jump in early Social Security claims go hand-in-hand, according to research from the Center for Retirement Research at Boston College. Already, there’s evidence that some older workers are getting pushed into retirement, with a 7-percentage-point increase in the number of Americans claiming they had retired after the pandemic, according to research published earlier this year from the University of Chicago’s Becker Friedman Institute.

That’s the case for Edgar Freeberg, 66, of Palatine, Illinois. He says he was planning on claiming Social Security when he turned 70, the age at which benefits reach their maximum payout. But after his job was outsourced earlier this year, he says he made the decision to take the retirement benefit four years earlier than planned.

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“I was going for the 70 thing,” Freeberg says. But, he adds, it’s more difficult to find a job in his field of computer programming as an older worker, which is part of the reason he filed for Social Security. “I just accepted it.”

The coronavirus recession was particularly hard on older workers. The jobless rate for workers over 55 jumped to 13.6% in April, higher than workers between 35 to 54 years old, according to the Labor Department. But by August, the jobless rate for the 55-plus group has recovered to 7.7% as older workers were recalled from furloughs or found new jobs.

Returning to the workforce may prompt some to rethink their decision to claim Social Security early — and many could qualify for a do-over, says Kelly Campbell, the CEO of Campbell Wealth Management, which focuses on investors over 55. There’s a very real benefit to asking for a reset because it reverses the decision, allowing you to reapply for the benefit when you’re older and can collect higher benefits.

At “full retirement age” — between 66 or 67 years old, depending on your birth year — workers can receive 100% of their entitled benefits. But they can receive an additional 8% per year if they wait to claim until they are 70.

Opting for a do-over “could be a big deal — that’s why you have to look at it,” Campbell says.

By claiming Social Security at the earliest age — 62 — the typical household loses out on about $111,000 in lifetime benefits, according to a 2019 study from United Income. A worker with a $725 monthly benefit at 62 would see that payout increase to $1,280 a month if they waited until they turned 70 to claim, or a 77% increase, the study noted.

How to take a do-over

Social Security do-overs aren’t available to everyone. First, you can only do it once in your lifetime. Secondly, you can only get one if you’ve received less than one year of Social Security benefits and repay all those benefits to the agency, Campbell adds.

To request a do-over, you’ll have to fill out a Form SSA-521, a “request for withdrawal of application,” and send it to your local Social Security office.

The agency will then contact you about the decision and let you know how much you need to repay — which will include your Social Security benefits, any benefits your spouse or children received, money withheld for Medicare payments and a few other items, such as voluntary tax withholding.

Anyone who receives benefits through your Social Security application, such as a spouse, must consent in writing to the do-over, the Social Security Administration says.

‘Word has gotten out’

Social Security is the “best” source of income for retirees because it acts as a lifetime annuity that’s indexed to inflation and thus rises with the cost of living, says Alicia Munnell, the director of the Center for Retirement Research at Boston College. The best way to maximize that benefit is to delay claiming, she notes.

Claiming Social Security as soon as possible may be the best choice for some, especially for older people who find themselves out of work and have no other savings to fall back on, experts say.

As for Freeberg, the worker who retired earlier than expected, he’s aware of the do-over option, he says, but he isn’t planning on going through the paperwork to reverse his decision if he finds another job. He notes that he had reached what’s considered “full retirement age” by the Social Security Administration, and that his benefits are better than many others.

Despite the uptick in early claims during recessions, there’s a long-term trend of Americans waiting longer to claim their Social Security benefits, Munnell notes.

“The word has gotten out that it’s better to claim later if you can,” she adds.

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