The decision to claim Social Security can be a tough one. You're allowed to sign up for benefits at any time once you turn 62. But if you're not eligible for your full monthly benefit based on your personal wage history until you reach full retirement age (FRA). That age is 66, 67, or somewhere in between, depending on when you were born.
For each month you claim Social Security ahead of FRA, your benefits get reduced. But on the flipside, for each month you delay your claim past FRA, your benefits get a boost.
Once you turn 70, you can't grow your Social Security benefits any longer. That's why 70 is often referred to as the latest age to file, even you won't be forced to sign up at that point.
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Now age 62 is a popular choice for claiming Social Security because it's the earliest point at which you can get your benefits. And a lot of people aim to file at age 66 or 67 because that's when FRA kicks in. There are also those folks who are able to be patient and claim Social Security at 70 for the highest monthly benefit they can snag.
But what about age 68? It may not be a very common choice for claiming Social Security. But it's an age you may want to strongly consider.
The upside of taking benefits at 68
Boosting your Social Security income by delaying your filing beyond FRA can be a very good thing. When you bring savings with you into retirement, you never really know whether that money will eventually run out. With Social Security, the monthly benefit you lock in at the time of your claim is the benefit you're supposed to get for life.
However, waiting until age 70 to claim Social Security may not be your most ideal choice. If you need your Social Security income to live on in the absence of a paycheck from work, then delaying your filing until 70 could mean having to continue working until age 70. You may not want to do that. And it may not even be a good thing health-wise if your job is stressful.
Also, the longer you wait to claim Social Security, the more you risk shorting yourself on lifetime income. Remember, a delayed filing will only result in more lifetime income than an earlier filing if you live a long enough life to make up for a delay in getting your payments. But there's really no way to predict your lifespan definitively.
That's why claiming benefits at age 68 may be your best bet. This way, your monthly payments get a modest boost. At the same time, you're not forcing yourself to wait too long to get your money. It's a pretty good compromise if you want the financial security that comes with higher monthly checks without having to sit tight for an unreasonable period of time.
A small boost could go along way
If your FRA for Social Security purposes is 67, filing for benefits at age 68 will result in an 8% boost. But that could be huge.
The average Social Security recipient today gets $1,907 a month. If you're in line for that benefit at an FRA of 67, an 8% boost brings that sum up to about $2,060. That's roughly an extra $150 per month, or an extra $1,800 of retirement income per year. That gives you more wiggle room for paying bills. Or, it could serve as your vacation money.
Of course, there are advantages to claiming Social Security at ages other than 68. But you may want to consider age 68 if you like the idea of a boosted benefit but you don't want to wait too long to get your money.
