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7 Good Reasons to Claim Social Security Early

Motley Fool Staff, The Motley Fool
A person filling out a social security benefits application form.

Source: Getty Images


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The most important decision senior citizens will make

There’s arguably no decision that’s more important for seniors than deciding when to take Social Security benefits. After all, more than 3 out of 5 aged beneficiaries today is reliant on Social Security for at least half of their monthly income.

But deciding when to take benefits isn’t as cut-and-dried as you might think.

Ideally, retired workers who’ve earned the prerequisite 40 lifetime work credits needed to qualify for benefits will wait until age 70 before claiming their payout. The reason is simple: Though workers qualify to begin receiving a benefit as early as age 62, their payout will grow by approximately 8% for each year they hold off on their claim, up until age 70. All factors considered (length of work history, earnings history, and birth year), waiting until age 70 is the way to maximize your monthly Social Security check.

However, waiting doesn’t always make sense. For some people, claiming early, despite the permanent reduction to their monthly check, can lead to a higher lifetime payout than if they were to wait. And the key to success with Social Security is to maximize what you receive over your lifetime, not just per month.

With this in mind, here are seven good reasons claiming Social Security early might make sense.