Social Security lump sum option when filing at 70 after withdrawal?

Yes, there is a lump sum option, but it comes with a significant trade-off. When you file at age 70, you can request up to 6 months of retroactive benefits as a lump sum. However, your monthly benefit amount will be permanently calculated as if you had filed 6 months earlier (age 69.5 instead of 70). So you'd get a one-time payment (6 x your monthly benefit at age 69.5), but your ongoing monthly payment would be less than if you filed at exactly 70. This is because you'd lose 6 months of delayed retirement credits (DRCs). The key question is whether having that immediate lump sum is worth the permanent reduction in monthly benefits.

I went through this EXACT situation two yrs ago!! Applied at 68, withdrew, then reapplied at 70. When I talked to the SSA agent for my final application, they offered me 6 mths of retroactive benefits but I turned it down because the permanent reduction wasn't worth it for me. My sister took the lump sum though - it worked for her because she needed to replace her car immediately. Just know that once you make the choice you CANNOT change it later!!!!

you don't actually have to wait till EXACTLY 70 to file. you could file at 69 and 10 months if you want. the DRCs are calculated monthly not just at birthdays. but yeah lump sum means you get back pay but smaller checks forever.

Wait they OFFERED you a lump-sum at 70? I turned 70 in November and filed but nobody told me anything about lump sum options! I'm going to call them tomorrow. Social security never explains all your options clearly!!

I'm confused about something - if you already filed withdrawal request, doesnt that mean youve already made your decision? I thought once you withdraw you have to wait 12 months to reapply anyway. But maybe im misunderstanding your situation.

Let me clarify a few things about the lump sum option: 1. It's officially called "retroactive benefits" and is limited to 6 months maximum when filing after FRA 2. You must specifically request it when filing - it's not automatic 3. Your benefit amount will be permanently calculated based on the retroactive start date 4. This is different from suspended benefits (if you had suspended instead of withdrawn) One important consideration: The lump sum could potentially push you into a higher tax bracket for that year, so factor that into your decision. Also, if you're still working at 70, remember that there's no earnings test after FRA, so your benefit won't be reduced regardless of how much you earn.

I forgot to mention in my previous comment - make SURE you save a copy of your withdrawal confirmation!!! When I filed at 70, the SSA had no record of my withdrawal and tried to tell me I couldn't file again!! Took THREE visits to my local office to sort out. Keep ALL paperwork!!

As someone new to this community, I want to thank everyone for sharing their experiences! This is exactly the kind of detailed information that's hard to find elsewhere. One thing I'd add for Sofia - when you do file at 70, consider scheduling an appointment at your local SSA office rather than doing it online or over the phone. Based on what ElectricDreamer mentioned about record-keeping issues, having an in-person appointment might help ensure everything goes smoothly and you can ask about the retroactive benefit option directly. Also, you might want to request a new Social Security Statement (Form SSA-7005) closer to your 70th birthday to get updated benefit estimates. Your earnings between now and then could affect those projections, and it's good to have the most current numbers when making your lump sum decision. Good luck with your planning!

Welcome to the community! I'm also relatively new here but have been learning so much from everyone's shared experiences. One additional consideration for your lump sum decision: if you're planning to continue working past 70 (which it sounds like you might be given your mention of fluctuating income), remember that the lump sum could affect your Medicare premiums through IRMAA (Income-Related Monthly Adjustment Amount). A large lump sum payment could push your modified adjusted gross income above certain thresholds, resulting in higher Medicare Part B and Part D premiums for the following year. This is separate from regular income tax implications but worth factoring into your overall financial planning. Your tax professional should be able to help you model different scenarios when you get closer to your filing date. It's great that you're thinking ahead - having 3 years to plan gives you a real advantage in making the best decision for your situation!

As a newcomer to this community, I'm really impressed by the depth of knowledge and willingness to share experiences here! I wanted to add one more consideration that might be helpful for your planning, Sofia. Since you mentioned your financial advisor briefly touched on this topic, you might want to ask them to run some specific calculations comparing the lump sum versus waiting scenarios. The break-even analysis can be quite revealing - essentially, how many years would it take for the higher monthly payments (from not taking the lump sum) to equal the immediate cash benefit you'd receive? This calculation should factor in your life expectancy, potential investment returns on the lump sum, and the tax implications that others have mentioned. Also, given that you have three years to plan, you might consider how your other retirement accounts and income sources will look at age 70. If you'll need immediate cash flow for a specific purpose (home repairs, healthcare costs, etc.), the lump sum might make sense despite the permanent reduction. But if your other retirement income will cover your needs, maximizing the monthly benefit could be the better long-term strategy. It's clear you're approaching this thoughtfully - having this conversation now puts you in a great position to make an informed decision when the time comes!

As a newcomer to this community, I'm really grateful for all the detailed information shared here! I wanted to add one perspective that might be helpful - if you're planning three years ahead, consider setting up a meeting with your local Social Security office about 6 months before you turn 70, just for a consultation. Not to file yet, but to review your record and discuss your options in detail. This could help you avoid some of the record-keeping issues that ElectricDreamer experienced. Also, since you mentioned your income might fluctuate before 2028, keep in mind that your highest 35 years of earnings determine your benefit calculation. If you're still working and earning more than your lowest earning years on record, those new earnings could actually increase your benefit amount beyond what you're currently projecting. One last thought - document everything related to your withdrawal now while it's fresh. Take photos of all paperwork, note the dates and reference numbers from any SSA communications. Having a comprehensive file will make the process much smoother when you do file at 70. Planning ahead like this is so smart - you'll be well-prepared to make the best decision for your situation!

As a newcomer to this community, I'm struck by how comprehensive and helpful everyone's responses have been! This is exactly the type of real-world guidance that's so hard to find elsewhere. I wanted to add one consideration that might be useful for your planning, Sofia. Since you have three years to prepare, you might want to track any changes to Social Security rules or policies that could affect your situation. While the basic structure of delayed retirement credits and retroactive benefits has been stable, there are occasionally minor policy adjustments that could impact your calculations. Also, consider creating a simple spreadsheet to track your projected benefits over the next few years. As your earnings change, you can update your estimates and see how they affect both your standard age-70 benefit and the reduced benefit you'd receive if taking the lump sum. This will help you make a more informed decision when the time comes. The fact that you're thinking this through so thoroughly now, combined with all the excellent advice shared here about documentation, consultation appointments, and comprehensive financial planning, puts you in a really strong position. You'll have all the information you need to make the choice that works best for your specific circumstances. Thanks to everyone for sharing such detailed experiences - this thread is a goldmine of practical Social Security knowledge!

As a newcomer to this community, I'm incredibly impressed by the wealth of knowledge and real-world experience shared here! This thread has been an amazing education on Social Security planning. Sofia, I wanted to add one more angle that might be helpful for your three-year planning horizon. Since you mentioned you're still working and your income might fluctuate, consider how the timing of your actual retirement (separate from when you claim Social Security) might influence your lump sum decision. If you plan to fully retire right at 70 and will need immediate cash flow, the lump sum could provide helpful bridge funding while you adjust to living on retirement income. But if you're planning to work part-time or have other income sources at 70, maximizing the monthly benefit might serve you better in the long run. Also, given all the excellent advice about documentation and preparation, you might want to start a Social Security file now with all your withdrawal paperwork, and add to it over the next three years. Include things like annual Social Security statements, any correspondence with SSA, and notes from conversations with your financial advisor about this decision. This community has provided such a comprehensive roadmap for making an informed choice - from the technical details of how retroactive benefits work to the practical tips about scheduling appointments and keeping records. You're definitely going to be well-prepared when decision time comes!

As a newcomer to this community, I'm absolutely blown away by the depth of knowledge and practical experience shared in this thread! This is exactly the kind of real-world guidance that's impossible to find in official SSA publications. Sofia, one aspect I haven't seen mentioned yet is the psychological factor of the lump sum decision. After years of delaying gratification to maximize your benefits, that immediate lump sum payment can feel very appealing when you finally reach 70. But it's worth preparing mentally for that moment now - knowing that the emotional pull of immediate cash might influence your rational financial planning. Consider writing yourself a letter now outlining your current thinking and reasoning, then seal it to read again when you're 70. Future you will have access to updated information about your financial situation, but current you has the benefit of clear, long-term thinking without the pressure of an immediate decision. Also, given all the great advice about documentation, you might want to take screenshots of this entire thread! The collective wisdom shared here about retroactive benefits, tax implications, Medicare considerations, and filing strategies creates an incredibly valuable reference guide for your future decision-making. Thank you to everyone for sharing such detailed experiences - this community is truly a goldmine for Social Security planning!

As a newcomer to this community, I'm absolutely amazed by the comprehensive discussion that's developed here! This thread has become an incredible resource covering every angle of Social Security lump sum planning. I wanted to add one practical consideration that might be helpful for your three-year planning window, Sofia. Since you mentioned working with a financial advisor, consider asking them to help you model how the lump sum decision would interact with your overall retirement withdrawal strategy. If you're planning to follow a systematic approach like the 4% rule or bucket strategy with your other retirement accounts, the lump sum could either complement or complicate that plan. For example, if taking the lump sum would allow you to delay withdrawals from tax-advantaged accounts during a market downturn, that could be valuable. Conversely, if the reduced monthly Social Security benefit would force you to withdraw more from other accounts over time, that might outweigh the immediate benefit of the lump sum. Also, given all the excellent advice about record-keeping and preparation, you might want to create a simple checklist now of everything you'll want to review before making your final decision at 70. This could include updated Social Security statements, current tax brackets, Medicare premium thresholds, your overall asset allocation, and any changes in your health or family situation. The fact that this community has provided such thorough guidance - from technical details to practical tips to psychological considerations - really demonstrates the value of learning from people who've actually navigated these decisions. You're going to be incredibly well-prepared when the time comes!

As a newcomer to this community, I'm truly grateful to have discovered such an incredible wealth of knowledge and experience! This thread has been an absolute masterclass in Social Security planning that goes far beyond what you'd find in any official guide. Sofia, reading through all these responses, it's clear you're approaching this decision with exactly the right mindset - planning well ahead and considering all angles. One additional thought I'd offer is to consider how your decision might be influenced by your family situation and legacy goals. If you have a spouse who would benefit from survivor benefits, maximizing your monthly payment (by not taking the lump sum) could provide more financial security for them long-term, since survivor benefits are based on what you were actually receiving. Also, given the complexity of all the factors discussed here - from tax implications to Medicare premiums to overall retirement strategy - you might want to consider getting a second opinion from a fee-only financial planner who specializes in Social Security optimization when you get closer to your filing date. Having an independent analysis could provide additional confidence in your decision. The documentation and preparation advice shared here is invaluable. Between keeping detailed records, scheduling consultation appointments, creating decision checklists, and even writing yourself a future reference letter, you'll have every tool needed to make a well-informed choice. Thank you to everyone who has shared their experiences and expertise - this community is truly special in how it provides practical, real-world guidance for such important financial decisions!