Rethinking – and Redoing – Decisions to take Early Withdrawals of Social Security

There’s nothing like an economic recession brought on by a global pandemic to throw a wrench into your financial planning – or pretty much any planning, for that matter. Also, unfortunately, this unprecedented combination of realities creates a perfect environment for snap decisions and knee-jerk reactions fueled by the adrenalin of sheer panic.

A recent article in USA Today took a look at one such decision. Older Americans who sought respite in taking early Social Security withdrawals due to job loss or lack of opportunities and now are regretting it. Luckily, they may be able to do something about it.

The COVID-19 recession was particularly hard on older workers, the newspaper reported, with Labor Department stats showing that the jobless rate for workers over 55 jumped to 13.6% in April, higher than that for workers between 35 to 54 years old. By August, however, the jobless rate for the 55-plus group had recovered to 7.7% as older workers were recalled from furloughs or found new jobs.

This may well leave those re-employed individuals who claimed Social Security early rethinking that choice and upset with its consequences. What they may not know, however, is that rather than beating themselves up – (not sure about this, might be better to rework a round regret?), they can request a reset, which reverses the initial decision and allows them to reapply when they are older and can collect higher benefits.

According to the Social Security Administration (SSA), claimants who change their minds can cancel their application for up to 12 months after they became entitled to retirement benefits (which should cover any COVID-related actions). This process is called a withdrawal, and each person only gets one in their lifetime.

For those choosing this option, there are a few things the SSA wants beneficiaries to know before withdrawing their applications:

  • Anyone else who receives benefits based on your application must consent in writing to the withdrawal.
  • You must repay all the benefits you and your family received from your retirement application. This includes:
    • Benefits your spouse or children received, whether they live with you or not.
    • Money withheld from your Social Security retirement checks for:
      • Medicare Part B, Part C and Part D premiums.
      • Voluntary tax withholding of federal income taxes for closed tax years. Contact the Internal Revenue Service or a tax advisor about any tax implications.
    • If you are already entitled to Medicare, you may choose to also withdraw your Medicare coverage.

Click on the SSA link above for additional information relating to railroad or veterans benefits and Medicare coverage and to download Social Security Form SSA-521.

As early withdrawal can reduce the size of a monthly check by as much as 30 percent, this is a serious decision. It also is a complicated one, as personal factors muddy any clear “right choice.”

If you find yourself faced with this dilemma and are still unsure what to do, give us a call. We would be pleased to help you get a clearer view of your financial situation and best options for maximizing it.


This material is intended for educational and informational purposes only. It is not intended to provide specific advice or recommendations for any individual, nor should it be construed as tax advice.   Additionally, you should consult with your Financial Advisor, Tax Advisor or Attorney on your specific situation.  The views expressed in the material are that of the author and do not necessarily reflect those of any market, regulatory body, State or Federal Agency, Association.  All efforts have been made to report or share true and accurate information.  However, J.L. Bainbridge & Company, Inc., is unable to verify the content and the content is subject to change and become materially inaccurate without notice.  For additional information about J.L. Bainbridge & Company, Inc., (CRD # 108058) please visit the SEC Website at  For a copy of the firms ADV Part 2 Brochure and or Form CRS, please contact us at 941-365-3435.