Workers who are eligible for Social Security can begin claiming benefits as early as age 62 and as late as age 70. But that's a pretty sizable window to work with.

Now one thing you should know is that if you file for benefits ahead of full retirement age, which for today's workers is 66, 67, or somewhere in between, you'll lose a portion of your Social Security income for each year you file early. On the flip side, if you hold off on benefits past full retirement age, you'll boost your payments by 8% for each year you wait.

Senior woman smelling flowers and smiling while standing next to a smiling senior man.


So what's the right age for you to file for Social Security? Here are three factors to take into account.

1. Your health

The interesting thing about Social Security is that it's designed to pay you the same amount in lifetime benefits regardless of when you initially file. How can this be? While filing prior to full retirement age means losing out on a portion of each benefit payment, you also collect a larger number of payments in your lifetime. Meanwhile, waiting beyond full retirement age means getting more money out of Social Security each month, but collecting fewer payments in total. The logic, therefore, is that these various impacts balance each other out.

This formula, however, assumes one key thing, and it's that you live an average life expectancy. If you pass away sooner than anticipated, you'll wind up collecting less money from Social Security in your lifetime.

Here's an example. Say your full retirement age is 67, at which point you'd get $1,600 a month in benefits. Filing at 62 instead will reduce each individual payment you collect down to $1,120, but you'll get 60 more payments. If you live until about age 78 1/2, you'll break even under both scenarios. But if you pass away at age 74, you'll come out nearly $27,000 ahead in your lifetime by filing at 62. And that's why your health needs to play a key role in helping you determine when to take benefits. If it isn't good, then you'll want to file sooner.

2. Your savings level

Most Americans are currently unprepared for retirement, with the average household aged 56 to 61 having just $163,577 in savings. At a 4% annual withdrawal rate, which has long been the standard, that's just over $6,500 a year of income, which clearly isn't enough for most folks to live on. Therefore, if you're behind savings-wise, and are counting on Social Security to cover a large chunk of your bills as a senior, you'll want to take steps to get as much money out of the program as you can. And as long as your health is good, that generally means waiting on benefits as long as possible to increase your monthly payments.

Imagine you're entitled to $1,600 a month from Social Security at a full retirement age of 67. If you hold off until you turn 70 to file for benefits, you'll increase each monthly payment to $1,984 -- for life. And that's sure to make a huge difference for you in retirement.

3. Your retirement goals

Maybe your dream is to travel the world in retirement. Or maybe your needs are simpler, and you're planning to spend your golden years exploring your city and spending time with friends and family. Either way, your retirement goals should play a significant role in determining when you file for benefits.

Let's assume that your savings are enough to pay the bills, and your Social Security income will be used mostly for leisure. If you're intent on traveling overseas, you might file for benefits at age 62 so you have the ability to globetrot when you have the most energy to do so. On the other hand, if your goal is to spend that money on gardening supplies and gifts for your grandkids, you may not be in such a rush to collect it early -- in which case holding off will give you more cash to work with. When you think about the right age to file for Social Security, it helps to decide how you're going to use that money, and then claim benefits accordingly.

Ultimately, there's no right or wrong age to file for Social Security. It really depends on your health, your financial needs, and your personal objectives. The key is to put a fair amount of thought into the decision so that you end up choosing the age that works out best for you.