Can you stop social security benefits? Yes. But there are only two instances when this can be done. The first time you can stop social security benefits is prior to your full retirement age, which is an age assigned to you by the Social Security Administration usually between 66 and 67. During the first year in which you are drawing social security prior to your full retirement age, you can file to have your benefits suspended by filling out form SSA 521. It is available on the social security website. However, any income you have received during the first year, you have to give it all back to the social security. The funds are not lost forever, they will get put back into your benefit and an updated social security benefit gets calculated when you start taking social security again, later.
The second time you can stop receiving social security benefits is if you have been receiving social security benefits prior to your full retirement age, once you reach retirement age, you can again suspend benefits. The reason why someone would do stop social security benefits is between 67-70 each year you defer social security benefits you earn an additional 8% per year in credits/income you suspend benefits. Making it at least 24% in additional monthly benefits if you suspend benefits from age 67-70. There is no claw back of benefits or penalty for suspending benefits after you reach your full retirement age. After the age of 70, no further social security/credits can be earned, your social security benefit will not get any higher by waiting to take later than 70.
Why would someone want to defer social security after they had started taking it? Possibly a job offer that is desirable comes into play, and the anticipated income to be earned from this job is much higher than the annual social security earnings test allowed which would generate a penalty levied by the Social Security Administration, while concurrently drawing social security. You can work and collect social security benefits at the same time. Prior to your full retirement age each year there is a limit on the amount of annual wages you can receive which as of 2024 is $22,360. Each year this amount goes up by roughly 050-1.0% I have a separate article that explains the annual earnings test. The first year, and only the first year, you receive social security benefits, the earnings test is a monthly annual earnings test, called the Grace Year. It’s important to understand the Social Security Grace Year. Also, the calendar year you reach your full retirement age, the annual earnings test amount for that year is almost three times as high as the prior years, then the years following your full retirement, there is no more annual earnings test, you can earn as much as you can while taking social security benefits, without penalty.
Once you start taking social security benefits and you are past your first year of benefits, you can’t suspend social security benefits again until you reach your full retirement age. So, to answer the question, can you stop social security benefits, the answer is yes but with some necessary caveats that need to be known. If you have any questions, please feel free to leave me your scenario on the form below and I will answer your question promptly.
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KW
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