Deciding when and how to claim Social Security is one of the most important financial choices you will make in retirement. Many people understand the basic ideas, such as claiming at age 62 or waiting until full retirement age. However, fewer people know about certain lesser-known rules that can increase monthly payments and improve lifetime benefits. Understanding these details can help you avoid costly mistakes and make better long-term decisions.

The Earnings Test Does Not Permanently Reduce Your Benefit

Some people begin collecting Social Security before reaching full retirement age, which is usually between 66 and 67 depending on birth year. If they continue working and earn above a certain yearly limit, part of their benefit may be temporarily withheld. This rule is known as the earnings test.

At first glance, it may seem like those withheld benefits are lost forever. In reality, they are not gone. Once you reach full retirement age, Social Security recalculates your payment and gives you credit for the months when benefits were reduced. This results in a higher monthly payment going forward. After full retirement age, the earnings limit disappears completely, and you can earn any amount without reducing your Social Security income.

You Can Suspend Benefits After Full Retirement Age

Many people do not realize that once they reach full retirement age, they can voluntarily suspend their Social Security benefits. This option allows their payments to grow through delayed retirement credits. Each year you delay, your benefit can increase by up to about eight percent until age 70.

This strategy can be helpful for someone who claimed benefits early but later decided they do not need the income right away. By suspending payments, they allow their monthly amount to grow. Inflation adjustments continue to apply during this period, which further increases the future benefit. Payments can be restarted at any time before age 70 if circumstances change.

Divorced Individuals May Be Eligible for Spousal Benefits

Divorce does not always mean losing access to benefits based on a former spouse’s work record. If you were married for at least ten years, are currently unmarried, and meet age requirements, you may qualify for a divorced spousal benefit. This benefit can be worth up to half of your former spouse’s full retirement amount.

One important point is that claiming a divorced spousal benefit does not reduce your former spouse’s payment. They will still receive their full benefit. This rule can be especially helpful for people who earned less income during their careers or spent years out of the workforce. In some cases, the spousal benefit may be higher than the benefit based on your own work history.

There Is a One-Time Withdrawal Option

If you claim Social Security and later regret the decision, you may have one opportunity to change your mind. Within twelve months of first claiming, you can withdraw your application. To do this, you must repay all benefits received so far. Once repaid, your record is reset as if you never claimed.

This allows you to reapply at a later age and potentially receive a higher monthly payment. However, this option can only be used once in your lifetime. Because it requires full repayment, it is important to carefully consider whether it makes financial sense before proceeding.

Cost of Living Adjustments Still Apply If You Delay

Some people hesitate to delay claiming benefits because they worry about missing annual cost of living adjustments. These adjustments are designed to protect benefits from inflation. The good news is that even if you delay claiming, all applicable cost of living increases are included in your final benefit calculation.

When you eventually claim, your payment reflects both delayed retirement credits and past inflation adjustments. This means waiting does not cause you to lose protection against rising prices. In fact, delaying can result in a significantly higher monthly amount that continues to grow with inflation over time.

Why These Rules Matter

Social Security is more flexible than many people realize. Small decisions about timing, work income, and marital history can lead to meaningful differences in retirement income. Taking time to understand these lesser-known rules can help you make confident and informed choices.

A careful claiming strategy may increase your monthly payments and provide greater financial security throughout retirement. Before making final decisions, reviewing your options and understanding how each rule applies to your situation can make a lasting difference.

Disclaimer

This article is for general informational and educational purposes only and does not provide financial, legal, or tax advice. Social Security rules, eligibility requirements, and benefit calculations may change over time. Individual circumstances vary. Always confirm details with the official Social Security Administration or consult a qualified financial professional before making retirement claiming decisions.