Social Security benefits are earnings-based, which means the monthly payments you receive as a senior will be a function of how much you earned during your career -- specifically, your 35 highest paid years on the job. That said, the age at which you initially file will affect your benefits, too.

If you file for Social Security at full retirement age, or FRA, you'll get the precise monthly benefit your earnings record entitles you to. But you don't have to file at FRA. You can delay benefits past that point and accrue credits that boost them by 8% a year up until age 70, or you can claim benefits as early as age 62, albeit with a reduction for each month you file ahead of FRA.

Senior man on couch with hand resting on chin


Not surprisingly, most seniors opt for the latter and file for benefits before reaching FRA. In fact, 62 remains the most popular age to start taking benefits despite the major reduction in income it causes.

If you're planning to claim Social Security early -- meaning, before FRA -- then you'll really need to think about whether that's a smart choice. Here are a few questions whose answers might influence your decision.

1. Do I need this money right away to cover essentials?

Many seniors are forced into early retirement, whether from losing their jobs or being physically unable to keep up with the demands of full-time work. If that happens to you before you hit FRA, you might be inclined to start collecting Social Security right away. But before you do, ask yourself whether there might be another source of income you can tap to cover your expenses and tide yourself over until FRA. For example, you might have savings in an IRA or 401(k), income from a pension, investments you can cash out, or good old cash in the bank. You might also have the option to rent out space in your home, or work in some capacity to generate income.

Now, if your financial resources are limited and you definitely don't have the money to cover your essential living costs, then you might have no choice but to file for Social Security early. But make sure that's really the case before making your claim official.

2. Am I planning to work at all in the coming years?

The Social Security Administration (SSA) will allow you to work and collect benefits at the same time. But unless you've reached FRA, you might see a portion of those benefits withheld if your earnings exceed a certain threshold.

For the current year, you can earn up to $17,640 before having your benefits impacted, but once your earnings exceed that level, you'll have $1 in Social Security withheld for every $2 you make. Meanwhile, if you're going to reach FRA at any point this year, you can earn up to $46,920 without having benefits withheld, but from there, you'll lose $1 in Social Security for every $3 in earnings.

The good news in either scenario is that the benefits you have withheld won't be lost permanently. Rather, they'll be added back into your monthly benefits once you reach FRA. What will be permanent, however, is the reduction in monthly benefits you'll face by virtue of having filed early. As such, you might ask yourself whether it really pays to claim Social Security if you're planning to work anyway.

3. Will taking benefits early cause financial struggles down the line?

Much of the time, the reduction you face in Social Security benefits for filing early will remain in effect for the rest of your life. The only exception is if you undo your application within a year of filing and repay every cent you received in benefits back to the SSA. As such, you'll really need to think about the long-term ramifications of filing early.

As you age, you might find that additional health issues creep up -- issues that cost money. You might also find that it's costlier to maintain your home, or that you need some form of long-term care. Therefore, when you think about claiming benefits early, don't just think of the short-term impact, but rather, the lifelong impact that decision might have.

There are plenty of scenarios where claiming Social Security early makes sense. On the other hand, while it is a fairly common practice, it's one that can also backfire. Contemplate these questions carefully before making your decision so that you don't wind up regretting it after the fact.