[Noozhawk’s note: One in a series of Social Security-related columns by Ameriflex representatives. Click here for a related article.]
Q. If early Social Security benefits are taken, is the amount prorated by month or year?
A. If you elect to take your Social Security benefits early (as early as age 62), the amount of your benefit will be prorated by month. For example, if you file when you are age 62 and 3 months, the benefit amount will be 76.3 percent of your full retirement benefit amount, instead of the 75 percent you would receive in the month of your 62nd birthday.
Q. Once Social Security benefits are received, is it possible to change your mind?
A. Once a person begins receiving Social Security benefits, it is possible to change his or her mind and withdraw the application. In doing so, benefits can be postponed until a later time and allowed to begin re-accumulating. This strategy is allowed only once per lifetime.
However, the withdrawal of application must take place within 12 months of receiving benefits. In addition, you will be required to repay any benefits received, including any benefits paid to spouses or children, and Medicare premiums. The tax consequences of this withdrawal will need to be evaluated and weighed against the reasons for wanting to withdraw an application — perhaps a windfall of money due to an inheritance.
— Justin Anderson, CFP, CRC, CLU, is a financial planner and Bibi Taylor, MBA, is the Social Security project coordinator at AmeriFlex, 3700 State St., Suite 310, in Santa Barbara. Call 805.898.0893 for more information. Financial advisors and registered representatives associated with AmeriFlex Financial Services offer securities and advisory services through SagePoint Financial Inc., member FINRA/SIPC. Insurance services offered through AmeriFlex Financial Services, which is not affiliated with SagePoint Financial Inc. or registered as a broker-dealer or investment advisor. Registered representatives may only discuss and/or transact securities business with residents of the following states: AR, AZ, CA, CO, FL, GA, IL, IN, MI, MO, NC, ND, NJ, NM, NV, NY, OH, OR, PA, PR, SC, TX, VA, WA, WI.