Many financial experts tell all retirees to delay Social Security for as long as
possible. However, Dave Ramsey takes a different view. He has repeatedly said
that claiming benefits at 62 can make sense, even though doing so reduces your
monthly check.
The catch is that Ramsey’s advice comes with a condition that’s easy to
overlook. He isn’t suggesting retirees claim early so they can spend the money.
In fact, he says the strategy only works if every dollar is invested. For
retirees trying to avoid money
mistakes, that distinction matters.
Here’s a closer look at what Ramsey actually says, and who this strategy may or
may not fit.
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Ramsey’s Social Security advice goes against conventional wisdom
The standard Social Security playbook is straightforward: Wait if you can.
For people born in 1960 or later, claiming at age 62 reduces benefits by about
30% compared to waiting until full retirement age. Delaying beyond full
retirement age can increase benefits even further through delayed retirement
credits.
That said, Ramsey has argued that a retiree may come out ahead by taking
benefits at 62 and investing the payments instead. The strategy is based on
investing, which is likely to lead to a higher return than waiting.
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The entire argument depends on investing every dollar
Ramsey’s math assumes that Social Security payments are immediately directed
into investments rather than used for living expenses. He has suggested that
diversified mutual funds could generate returns that exceed the benefits of
waiting to claim.
That’s a very different story from what many retirees actually face.
If a retiree claims at 62 and uses money for groceries, housing costs, travel,
or other expenses, the opportunity to generate investment returns disappears. At
that point, they’re simply locking in a smaller monthly benefit for life.
The strategy only works as intended if the Social Security checks become
investment contributions rather than retirement income.
Waiting provides something the market cannot
One reason many financial planners recommend delaying Social Security is that
the benefit increase is guaranteed. For someone whose full retirement age is 67,
claiming at 62 reduces benefits by roughly 30%.
Waiting beyond full retirement age increases benefits further through delayed
retirement credits.
Investment returns are never guaranteed, though. The stock market has
historically produced some strong long-term returns, but those arrive unevenly.
A retiree claiming at 62 could encounter a major market downturn early in
retirement, significantly impacting results.
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The break-even point is closer than many people realize
One reason this debate never seems to go away is that both approaches can work
depending on how long someone lives.
Actuarial calculations generally place the break-even point around age 78 to
78.5 for someone deciding between claiming at 62 or waiting until full
retirement age.
That’s the age when the cumulative benefits from delaying begin to exceed the
total benefits received by someone who started early.
Of course, the challenge is that no one really knows how long they’re
going to live.
The earnings test creates a major problem for working retirees
One practical obstacle often gets overlooked in discussions about Ramsey’s
strategy.
Many people are still working at 62. But claiming Social Security before full
retirement age while earning a substantial salary can trigger benefit reductions
under Social Security’s earnings test.
In 2026, workers who are below full retirement age and earn more than $24,480
lose $1 in benefits for every $2 earned above that threshold.
That means a 62-year-old cannot necessarily continue earning a full salary,
collect every Social Security check, and invest those payments at the same time.
For many households, the math becomes much less attractive once the earnings
test enters the picture.
Who Ramsey’s strategy may actually work for
Ramsey’s approach tends to fit a fairly specific type of retiree.
The ideal candidate would:
Have substantial savings already available
Not need Social Security for everyday expenses
Be comfortable with stock market risk
Have the discipline to invest every payment consistently
That’s a relatively narrow group. Many retirees rely on Social Security to help
cover monthly bills. Others continue working into their mid-to-late 60s. For
those households, delaying benefits may provide a larger guaranteed income
stream without requiring investment risk.
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Why this advice fits Ramsey’s broader philosophy
Ramsey’s Social Security position isn’t really about Social Security itself.
It’s an extension of how he views retirement planning generally.
He has long argued that retirees should build enough wealth through investing
that Social Security becomes a supplement rather than a primary income source.
He also frequently expresses concern about the program’s long-term financial
challenges and encourages people to focus on assets they can control directly.
Seen through that lens, recommending early claiming and investing is consistent
with the rest of his retirement philosophy.
Bottom line
Dave Ramsey’s advice to claim Social Security at 62 is more nuanced than it
first appears. The strategy depends entirely on investing every dollar of those
early benefits rather than spending them. For retirees who need Social Security
to cover monthly expenses, the math behind the recommendation may not hold up.
Don’t forget about longevity risk. A healthy 62-year-old today has a real chance
of living well into their 80s or beyond, which can make a larger guaranteed
benefit more valuable later in retirement. Before deciding when to claim, it may
be worth reviewing your broader retirement
plan, so the decision fits your overall income needs and expected retirement
timeline.
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