NEW YORK (MainStreet) — When it comes to people’s Social Security benefits and how they’re determined, most feel completely in the dark.

In fact, only 9% of consumers believe they are very knowledgeable about how Social Security benefits are determined, while just 1% of certified financial planners think their clients are knowledgeable about claiming their benefits, according to a new survey released by the Financial Planning Association and AARP.

“The Social Security knowledge gap has been created by many things including the complexity of the Social Security system, the role of the Social Security Administration and the lack of easy-to-use and understand maximization tools,” said Angela Deppe, a certified planner and founder of, which offers tools on how to maximize one’s benefits.

“The SSA is the expert on Social Security and the creators of this complex system; however, they are not advisors and are not able to provide advice on when and how to take Social Security,” Deppe said. “Therefore, those at or near retirement must educate themselves on Social Security or seek advice from their financial advisor.”

According to the research, while most acknowledge they know little about claiming Social Security claiming, the majority of consumers — 77% — and certified planners — 85% —say maximizing benefits is very important. Also, a whopping 83% of consumers overestimated or underestimated the amount of money they would receive if they waited to become beneficiaries at their full retirement age — with 67% underestimating.

“It is a tremendously complex government program that utilizes your highest 35 years of taxable Social Security earnings in a ridiculous formula,” said Troy Sharpe, president and co-founder of Oak Harvest Financial Group in Texas.

Sharpe said to perform a true analysis, an advisor should ask for the earnings history section of a client’s Social Security statement, and not just the amounts projected on statements at ages 62, 66 and 70.

“There are literally tens of thousands of different possible combinations of how and when to elect Social Security if you are married,” Sharpe said. “The difference in taking it at 62 versus maximizing benefits can be over $200,000 in cumulative retirement income.”

Sharpe said some of the strategies that can be utilized are file and suspend, restricted application and delayed retirement credits.

“Another key secret in this low interest rate environment is to make withdrawals from savings instead of activating Social Security, because the guaranteed increase in lifetime benefits is greater than you can achieve in a low risk investment given today's economic realities,” said Sharpe, adding this strategy assumes one is healthy, but it can result in between a six to eight percent increase to one’s annual income for life depending on their age.

Greg Smith, a certified planner at The Wise Investor Group at Robert W. Baird & Co. in Virginia, said one of the most important thing for anyone to remember when it comes to Social Security is that retiring and claiming benefits are two completely different things.

“Each are independent actions and decisions,” Smith said. “Someone’s age for qualifying for Social Security is not the same as an endpoint to working.”

He added it’s also important for consumer to remember they get no additional advantage by waiting past age 70 to collect benefits, and that age is not the only factor to consider when deciding to apply for Social Security.

“There is much more to consider, such as your need for the cash flow, your health, whether you’re married, whether you’re widowed or divorced, if there is an age difference between you and your spouse,” he added.

Lastly, Smith reminded Social Security benefits might not continue with the same set of rules that exist today.

“There does seem to be a large dislocation between Americans’ increasing life expectancy and the age at which they derive their full benefits,” Smith said. “A lot can happen over the course of a career.

“Hence the importance of keeping the financial plan current and up-to-date,” he added.