This Could Be the Single Most Important Factor When Deciding When to Claim Social Security

Whether you're counting on Social Security to provide just a portion of your retirement income or the majority of it, you no doubt want to get the most money out of the program as possible. And that's why you'll need to be strategic about when you file for benefits.

Though your benefits themselves are calculated based on how much you earned during your career (specifically, during your 35 highest-paying years on the job), the age at which you file for them could cause them to go up, go down, or stay the same. If you take benefits at full retirement age (FRA), you'll get the exact amount your earnings record entitles you to month after month. Your FRA is based on your year of birth, as follows:

DATA SOURCE: SOCIAL SECURITY ADMINISTRATION. 

That said, you don't have to claim benefits at FRA. You can file for them as early as age 62 or as late as age 70. Opt for the former and you'll get your money sooner, but you'll also reduce your monthly benefits in the process. Opt for the latter and you'll grow your benefits by 8% for each year you delay past FRA.

Either way, you'll want to put some thought into the decision, because the age at which you file for benefits will generally dictate how much monthly income you collect for life. And if there's one factor you really want to consider when making that determination, it's none other than the state of your health.

IMAGE SOURCE: GETTY IMAGES.

Why your health matters

The interesting thing about Social Security is that it's designed to pay you roughly the same lifetime total regardless of when you first claim your benefits. Imagine your FRA is 67 but you file for Social Security at 62 instead. In doing so, you'll reduce your monthly payments by 30%, but you'll also collect 60 more payments than you would by waiting. On the flip side, if you wait until 70 to file for benefits, you'll boost them by 24%, but you'll collect 36 fewer payments.

These factors are, in theory, designed to cancel each other out. But that only applies when you're dealing with an average life span. If you have reason to believe you'll pass away sooner or later than the average senior, then you'll need to adjust your strategy.

Imagine your health is in bad shape, and you therefore think you'll pass away sooner than your peers. In that case, it generally pays to file for benefits as early as possible so that you get the highest total lifetime payout from Social Security. If your health is great, on the other hand, the opposite holds true -- you'll generally get a higher total lifetime payout by waiting as long as possible to claim benefits.

Let's say you're entitled to a $1,500 monthly benefit at a FRA of 67. Here's what your total lifetime payout might look like based on when you file, assuming you live until age 72:

TABLE AND CALCULATIONS BY AUTHOR.

As you can see, when you're dealing with a shortened life expectancy, you stand to walk away with a higher lifetime total by filing for Social Security as early as you can. But now let's assume that you live a longer life than the average senior. Here's what those same numbers look like if you live until age 90:

TABLE AND CALCULATIONS BY AUTHOR.

Clearly, in the latter scenario, it pays to wait on your benefits as long as you can.

While it's impossible to predict your own mortality, the state of your health is a strong indicator of how long you're likely to live. And that's why your health should absolutely be a driving factor in determining your Social Security filing age.

Of course, this logic assumes that you just have your own needs to think about. If you expect to leave behind a surviving spouse, know that his or her benefits will be based on yours, and that the more you collect each month, the more he or she stands to collect upon your passing. If you're single, however, be realistic about your life span and file for benefits accordingly. It's a good way to increase your odds of getting the most money from Social Security in your lifetime.