Even if you've been saving for retirement, chances are Social Security will wind up being a significant income source for you. And that's why the decision on when to file isn't something to take lightly. Before you claim your benefits, be sure to answer these important questions that could steer you toward a better choice.

1. Do I need the money right away?

Your Social Security benefits will be calculated based on your 35 highest years of earnings, but the age at which you initially claim them will ultimately dictate how much you collect month after month. If you file for benefits at your full retirement age (FRA), you'll get the exact amount your earnings history entitles you to. That said, you can sign up for Social Security as early as age 62 and as late as age 70.

Older man fishing.


Filing at 62 will give you access to your benefits sooner, but know that for each month you claim benefits ahead of FRA, they'll be reduced by a certain percentage. Along these lines, you can delay benefits past FRA, and in doing so, you'll accrue credits that boost your payments by 8% a year, up until age 70. In other words, the later in life you claim your benefits, the more money you stand to collect from Social Security each month, so before you file, think about whether you really need that extra income right away. If you can hold off for even a few months, you'll snag yourself a higher monthly payout -- for life.

2. Is my health in decent shape?

We just learned that holding off on Social Security means boosting your benefits on a monthly basis. But that doesn't necessarily mean you'll get more from Social Security in your lifetime.

The interesting thing about Social Security is that the program is technically designed to pay you the same lifetime total regardless of when you initially file. The reason? If you file early, you'll reduce your monthly benefits, but you'll collect a greater number of individual payments. Meanwhile, if you file later in life, you'll boost your monthly benefits but collect a smaller number of individual payments.

That said, the whole concept of breaking even only applies if you live an average lifespan. If your health is poor, it generally pays to file for benefits as early as possible, because if you pass away at a younger age than the average senior, you'll come away with a higher lifetime total. On the flip side, if your health is great, it generally pays to follow the aforementioned advice and delay benefits for as long as you can.

If your health is mediocre, it's a tougher call, but in that case, you might settle on waiting until FRA to file for benefits. This way, you don't reduce them, but you also don't have to wait too long to start collecting, thereby increasing your chances of coming out ahead in your lifetime.

3. Have I considered my spouse's needs?

It's natural to consider your own needs when deciding when to apply for Social Security. But if you're married and have reason to believe your spouse will outlive you (say, you have health issues and he or she doesn't, or you're much older), you'll need to remember that the age at which you claim benefits could impact how much your spouse collects in the form of survivor benefits. In a nutshell, your surviving spouse's benefits will be based on your monthly benefit payments, so if you slash your benefits by filing before your own FRA, you might leave your spouse with a lower income stream for life.

Of course, this makes for a tricky situation if your health is poor but your spouse's health is great. When you're dealing with a shortened life expectancy, it's often best to file for benefits as early as possible to get the maximum lifetime payout from Social Security. But that logic really only applies if you just have yourself to worry about. If you have a spouse you're likely to leave behind, then it might actually pay to wait a bit and grow your benefits (or avoid a reduction) so that your spouse isn't shortchanged in his or her lifetime.

Clearly, there are many factors that will ultimately need to go into your decision about when to file for Social Security. Therefore, you'll need to answer the above questions not just individually but collectively to land on the right choice.