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2 good reasons to claim Social Security at 68

The Motley Fool logo The Motley Fool 11/6/2017 Maurie Backman
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When we think about when to file for Social Security, age 68 doesn't often come to mind. After all, it's not a particularly notable age on the spectrum of when to claim benefits.

Here are some of the more popular ages to apply for Social Security:

--62, which is the earliest age you're allowed to take benefits

--66-67, which constitutes full retirement age for those born between 1943 and 1960

--70, which is the latest age to accrue delayed retirement credits

But while 68 may not be the most common age to file for Social Security, it's actually a good one to consider nonetheless. Here are two reasons why.

1. You want to boost your benefit payments without having to wait too long to collect them

Though your Social Security benefits are based on your earnings record (specifically, your 35 highest years of earnings), you have the power to lower or boost those payments based on the age at which you first start collecting them. If you wait until your full retirement age, you'll get the base amount your earnings render you eligible for. File before that, however, and you'll reduce your benefits in exchange for getting your hands on that cash early.

On the other hand, if you delay your benefits past full retirement age, you'll get an automatic 8% increase in your payments -- an incentive you can capitalize on until age 70. In fact, many people wait until 70 to claim Social Security to get the maximum benefit, but let's face it: The older we get, the less energy we're apt to have to enjoy retirement to the fullest. That's why 68 might serve as a reasonable compromise between boosting your benefits without having to wait too long to use them.

Though everyone is different, in some cases, even a couple of years could spell the difference between optimal health and mobility versus the start of a decline. So if your full retirement age is 67, at which point you start experiencing a few health issues, but you really want to boost your benefits, waiting until 68 is a less risky prospect than holding off until 70.

2. You don't have much in the way of savings

Setting money aside for retirement is often easier said than done. Even if you're an otherwise responsible person, you could end up nearing retirement with only a minimal amount saved. In fact, more than 40% of U.S. households 55 to 64 have no retirement savings at all, according to the Economic Policy Institute, and many older workers who have saved haven't saved that much.

That's why claiming Social Security at 68 often makes sense. If you're entering retirement without much savings, and you really need those benefits to stay afloat financially, then boosting them becomes critical. Granted, you won't get the same increase as you would by waiting until 70, but you'll get between an 8% and 16% boost by going this route, which is much better than no boost at all.

Now you may be thinking: If I'm hard up for cash, wouldn't waiting until 70 be a better idea? And in some cases, it might. But even if you plan to work until age 70, it may not end up happening. An estimated 60% of U.S. workers wind up being forced to retire earlier than expected, according to data from Voya Financial. The reasons for this run the gamut from getting laid off to experiencing a decline in health to needing to care for a loved one.

Of course, it could be that you settle on 68 as your retirement age and are forced out of your job a year prior. But the earlier you aim to retire, the greater your chances of getting to work up until that point. In other words, 68 may not be the optimal age for taking Social Security if your goal is to increase your benefits -- but it's a good middle ground.

Though most Americans don't claim Social Security at 68, if you want to boost your benefits somewhat, it's a smart age to consider. You may even want to tell your friends about it, so that they rethink their own strategies and ponder yours instead.

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