Stopping Your Social Security Benefits

How to Un-Retire

Have you heard of the cliché of the person that was a workaholic her whole life and once she retires, she doesn’t know what to do with herself so a couple months into retirement, she UN-retires and goes back to work? Honestly, this will probably be me.

There are other common reasons for people to un-retire. Typically they involve the financial reality of taking early Social Security. Many people are so excited about the prospect of getting their long-awaited Social Security at age 62, that they retire without giving it enough thought.

Before you decide to start drawing your Social Security, think through these scenarios to help you proceed into retirement.

Scenario One: Misunderstanding Medicare

Often, it is assumed that you could choose to start Medicare early since you know of a few people who are on Medicare that are under the age of 65. This is rarely the case! Only people who have qualified for disability get Medicare prior to age 65. 

Scenario Two: Health Insurance is Too Expensive

If you are able to remain on your spouse’s employer health plan, then health insurance isn’t a hurdle. But if you were the one providing health insurance for your family and you retire at age 62 this might be a problem. They can ride out COBRA a bit (which might be more expensive than the ACA) but all of you will end up enrolled into the Affordable Care Act (ACA), also known as Obamacare. The ACA is priced based on your income, so you might receive a heavy government subsidy. Average income Americans turning 62 will have sticker shock when enrolling. The average cost is about $700 for a single 62 year old with a very high deductible. Of course prices vary based on the plan you choose, but it isn’t very affordable to the majority of retirees.

Scenario Three: Going Back to Work Full-Time

If the price of health insurance didn’t scare you, you might be one of the retirees who lost their job only to get a new job offer a few months after starting to draw Social Security. Early retirement comes with a stiff earned income limit, in 2023 it is $21,240. Do not take your new job and continue to receive your Social Security or you are harming yourself. For every $2 you earn over $21,240, your Social Security will be reduced by $1. A full-time job can end up reducing your Social Security to $0. In order not to create this type of mess, you want to contact the Social Security Administration in advance of exceeding the earning’s limit and withdraw your benefits.

If you’re in any of these situations, here’s the roadmap for stopping your social security benefits and un-retiring.

The Nitty Gritty of Un-Retiring & Stopping Your Social Security Benefits

You can probably guess the first step. It’s call the Social Security administration. You’ll have to file to withdraw your benefits. As with anything government related, this isn’t going to be easy. Don’t be discouraged, many people go through this every year!

Something most people don’t realize is you must repay all the Social Security payments that you have already received! If anyone is drawing benefits off your work record (spouse or kids) they must agree for you to stop. Then you must make a lump-sum repayment (no interest is charged) to withdraw your benefits. This allows your benefits to continue to grow again, while you go back to work. You can only use this route if you haven’t been receiving benefits for more than a year. This is also available to you only once in your lifetime.

Un-Retiring Vs Suspending

Lets say you re-retire and after 2 more years a great consulting job lands in your lap, you can suspend your Social Security, which isn’t the same as withdrawing it. Basically, suspending it just stops your payments. Once you reach your full retirement age, you can continue to work full-time and collect your full Social Security payment.

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Sylvia Gordon and her sister, Rebecca, run Gordon Marketing, one of the nation’s largest Medicare FMO/NMA offices. They have a team of over 100 that train and support independent insurance agents in all 50 states. You can find Sylvia’s weekly posts on LinkedIn and the sisters' Youtube channel posts 2 training videos each week. Contact Sylvia at sgordon@gordonmarketing.com or 800-388-8342.

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