Can You Get a Lump Sum Social Security Payment?

Receiving a lump sum Social Security payment is possible under certain circumstances, but it depends on factors such as your age, benefit eligibility, and the specific type of Social Security benefits you are claiming. In some cases, retirees who delay claiming their benefits may be eligible for a retroactive lump sum payment, while others, such as surviving spouses, might qualify for a one-time death benefit. However, choosing a lump sum payment can impact future monthly benefits and overall financial planning.

A financial advisor can help you develop a strategy for claiming your Social Security benefits.

Lump Sum Social Security Benefit Basics

When the time comes to file with the Social Security Administration to start receiving Social Security retirement benefits, you get the option to receive up to six months’ worth of benefit payments in a single lump sum. These retroactive benefit payments aren’t available to everyone who claims benefits and seeking the lump sum payout may not always make good financial sense. However, in some cases, it can be a good way to maximize your Social Security benefits.

Social Security’s old age retirement benefits can be claimed by most people starting at age 62. By waiting a few years until full retirement age, you can become eligible to receive a larger monthly benefit. If you wait until age 70, you’ll get the maximum monthly benefit. From age 62 to 70, the benefit increases by 8% per year.

After you’ve reached full retirement age, you may be able to claim up to six months of benefits to be paid in a single lump sum. For instance, if you reach full retirement age in July and wait until the following January to start claiming your monthly benefits, you can request a check for the benefits you would have received if you had claimed them as soon as you reached full retirement age in July.

How Lump Sum Social Security Works

The lump sum could be sizable. In 2025, the average Social Security monthly benefit is $1,976. Someone who chose to receive a maximum of six months of retroactive benefits could theoretically expect a check for $11,856.

However, claiming retroactive benefits in a lump sum comes with a cost. If you do claim six months of retroactive benefits, then your claiming age would be set as if you’d claimed your benefits six months before you did. Since claiming age is a key factor determining monthly benefit size, it’s an important consideration. Here’s an example of how it would work:

If you claim six months of retroactive benefits the month you turn 68, your future benefits will be calculated as if you had claimed when you were age 67.5. Since benefits increase 8% annually, you will be giving up half the previous year’s increase or 4%.

In a scenario where your monthly benefit at 68 was $2,500, claiming six months of retroactive benefits would mean you are eligible to receive 4% percent less or $2,400 a month. And this decrease would be permanent. In exchange, you’d get a check for $14,400, which is six times the $2,400 monthly benefit you became eligible for at 67.5.

Whether this turned out to be a good idea or not depends on several factors, including your current financial situation and your health and life expectancy. For instance, it would take 144 months or 12 years for your $100 lower monthly benefits to equal the $14,400 lump sum payment. If you don’t expect to live that long because of a health condition, the lump sum could make financial sense.

Pros of Lump Sum Benefits

Opting for a lump sum payment from your Social Security benefits can have several advantages depending on an individual’s financial situation and needs. These notable advantages include:

You’d get the money now rather than receive it in small monthly chunks over several years.
You could use the lump sum to pay off high-interest-rate debt or satisfy a pressing financial obligation.
If you don’t live long enough to make up the difference with higher monthly payments, you would end up receiving more from Social Security than if you didn’t take the lump sum.
You might be able to invest the money and potentially significant returns.

Cons of Lump Sum Benefits

While a lump sum Social Security payment can be advantageous in certain situations, there are also several drawbacks to consider:

Your monthly benefit will be permanently lower.
The lump sum payment could push you into a higher tax bracket for the year, costing you more in income tax.
Investing the lump sum may not generate a return higher than the 8% annual benefit boost you get by waiting to claim.

While a lump sum payment can be beneficial, it is important to weigh these advantages against potential drawbacks, such as reduced monthly benefits, tax implications and the risk of quickly depleting funds.

Bottom Line

If you wait until after full retirement age to claim Social Security, you may receive up to six months of retroactive benefits in a lump sum. However, this locks in your monthly benefit at the lower amount from six months prior. Only those at full retirement age qualify, and it’s typically advisable only for urgent financial needs or serious health concerns that shorten life expectancy.

Retirement Tips

Deciding when to start claiming Social Security benefits is a decision with a lot of moving parts. You may want to consider discussing it with a financial advisor. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
SmartAsset’s Social Security Calculator can help you estimate how much you’ll receive in monthly benefits when you retire. Enter your birth year, annual income and anticipated retirement age and a few other details to get a figure that you can use when crafting your plan for a comfortable retirement.