Monday Money Tip: Timing is key to getting the most out of Social Security benefits

Financial planners around Philadelphia and the nation are urging clients not to miss out on tens of thousands of dollars in Social Security simply because they can't figure out the best time to claim benefits.

The calculus behind claiming Social Security is so complex that local advisers like Clark & Goshow Financial Strategies Group L.L.C. of Malvern are holding seminars called "Understanding Social Security Claiming Strategies."

Advisory websites such as Financial Engines made online Social Security planners available free (www.financialengines.com).

"Social Security is incredibly complex, and most people miss out on tens of thousands of dollars in benefits," says Christopher Jones, Financial Engines chief investment officer. By estimating Social Security benefits in combination with your 401(k), "You can unlock hidden value and dramatically increase your retirement income," he said.

The median additional benefit amount found for a typical married couple is well over $100,000, according to the Sunnyvale, Calif., investment advisory firm.

Delaying Social Security can be "a screamingly good deal, especially in today's low-interest rate environment," adds Jones. "For each year participants defer claiming Social Security, they receive a 6 to 8 percent increase in lifetime benefits, under current conditions, which can make a big difference in their quality of life in retirement."

T. Rowe Price Group of Baltimore also outlines when to claim Social Security benefits based on marital status. T. Rowe Price offers its Social Security Benefits Evaluator tool online to examine the trade-off between taking early Social Security benefits and waiting until the latest possible age, 70, while tapping savings in the meantime.

Retirees have two goals that often compete: Lock in the highest Social Security benefit and, if married, the highest benefits for the surviving spouse. This generally entails delaying, ideally to the latest possible age.

They should also minimize savings withdrawals, especially in the early years of retirement, particularly before 70. This entails taking benefits as early as possible.

"You can't do both," says Christine Fahlund, a senior T. Rowe Price financial planner. "So you should be looking for the best compromise for your situation."

Even for middle-income retirees, benefits can vary by hundreds of thousands of dollars. I tried Financial Engines and the T. Rowe Price Social Security Benefits Evaluator tool (troweprice.com/social security), and, thankfully, neither one asks for Social Security numbers.

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@erinarvedlund