4 tools to help maximize your Social Security benefits - CNBC

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Choosing when to collect your Social Security benefits can have a large impact on your standard of living in retirement, especially if you didn't save enough on your own. According to the Social Security Administration, Social Security benefits represent 30% of retirement income for the elderly. Deciding when to collect is a complicated task — you'll have to consider factors like your spouse, your other sources of retirement income, your health status and the cost of Medicare deductions. 

Online tools, however, exist to make that task a little bit easier. There are a number of free and paid services out there to help people figure out when to collect their benefits.

"Because SSA maintains a neutral stance on the claiming decision, many other government, academic, nonprofit, and private groups have developed Social Security benefit calculators and tools for analyzing retirement finances to provide clarity on individuals' retirement decisions," states a 2016 report by the Social Security Administration. "The calculators may be very informative for older workers who have an established earnings record, but less so for younger workers whose future earnings may be unpredictable."

While these tools vary in how much information they collect and how accurate the earnings estimates are, online calculators and tools can still provide individuals with an estimate of how much they'll earn in benefits. The choice of when to collect could mean earning thousands or hundreds of thousands of dollars more. 

Below, Select highlights four online Social Security free and fee-based tools that people can use to figure out when to collect benefits. 

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The Social Security Administration website

This one is a no-brainer, but the Social Security Administration website provides a number of different benefit calculators — there's a tool to help you figure out when your full retirement age is and another that calculates how your earnings (before full retirement age) could impact your benefit amount. 

The most useful tool that the Social Security administration has is the retirement estimator which calculates your monthly benefits from the administration's own data on your earnings history. The closer you are to retirement, the more accurate the calculator will be because you'll have fewer earnings years ahead of you. 

However, most of the calculators on the Social Security Administration website don't account for many factors in the calculation of your monthly benefit. If you have a spouse or other sources of retirement income that could affect the percentage of your benefits that are taxable, you may have to use multiple tools.

Open Social Security

Open Social Security is a free calculator developed by Mike Piper, a CPA. This calculator, unlike the Social Security Administration calculators, is more complex, accounting for multiple factors like whether an individual has a spouse, the average lifespan of men versus women and the potential for benefits to be cut in the future. 

The tool also provides individuals with a rundown of their yearly Social Security benefits and their cumulative earnings with a spouse over the course of retirement.

AARP Social Security Calculator

The AARP Social Security calculator is a basic calculator that provides a graphical depiction of how much your monthly benefit is depending on when you choose to collect. The calculator also provides information on how much of your living expenses (based on an average retiree's monthly living expenses) your Social Security benefits will cover.

The major drawback of this calculator is that it determines your monthly benefit with your average annual salary, so it might not be entirely accurate if your estimate of your average annual salary is not correct. The calculator also determines cumulative benefits based on if an individual collected at age 70, a goal that may not be realistic for many.

MaxiFi Planner

MaxiFi Planner is a fee-based Social Security tool developed by economist Laurence Kotlikoff. The software focuses on helping retirees smooth consumption over time. In other words, it creates a plan for retirees that allows them to have a standard of living that stays constant once they're done working. 

The software allows for users to input information that many free calculators don't allow such as withdrawals from retirement accounts, mortgage costs and pensions. The software provides users with information on when to withdraw from other retirement accounts and when you and your spouse should file for benefits. 

This complex software, however, does come at a hefty price. The standard plan costs $109 for the first year of service, and then $89 each year after that.

Other retirement vehicles

Since Social Security is only meant to supplement people's retirement income, it's vital for people to save for retirement on their own. Pensions, 401(k)s, traditional IRAs and Roth IRAs are other popular sources of retirement income. If your employer offers matching 401(k) contributions, your first priority should be maxing out the match.

If your employer doesn't offer matching contributions or you have extra money leftover to save for retirement, you might consider opening a Roth IRA or a traditional IRA.

A Roth IRA has an income limit so not everyone is eligible. Individuals who make less than $144,000 and married couples filing jointly who make less than $204,000 are eligible to contribute to a Roth IRA. These accounts offer a unique tax advantage: You pay taxes on your upfront contributions so your investments grow tax-free over time. And when you do withdraw, you won't pay taxes on any of your distributions (as long as you withdraw after age 59 and a half).

For those who don't qualify for a Roth IRA, a traditional IRA is a good option because there are no income requirements. A traditional IRA offers a different type of tax advantage. With a traditional IRA individuals pay taxes on their investments when they withdraw that money in retirement. However, depending on your income and whether your employer offers a retirement plan, your traditional IRA contributions may be tax deductible. This means your contributions reduce your taxable income now and therefore how much you owe in taxes.

Select ranked Charles Schwab, Fidelity Investments, Vanguard, Betterment and E*TRADE as having the best IRAs based on factors like fees, the variety of investments options and usability. If you want a Roth IRA, Select ranked the following as the best options: Charles Schwab, Fidelity Investments, Ally Invest and Betterment.

Also, consider a robo-advisor like SoFi Invest, Wealthfront and Betterment, all of which offer a traditional IRA and Roth IRA. A robo-advisor will create a diversified portfolio for you based on your investing goals and retirement timeline and will automatically rebalance your portfolio over time.

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Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff's alone, and have not been reviewed, approved or otherwise endorsed by any third party.