Is Dave Ramsey Right About Claiming Social Security At 62?

If someone were to offer you $90 now, or $100 in a month from now, which option would you choose? Chances are, you’d take the $70 and run.

Clearly, the $100 payday is a lot more substantial. But it’s not an easy thing to wait on money you could have right now.

Such is the dilemma Social Security claimants face all the time. Seniors are allowed to sign up for Social Security as early as age 62. However, if you don’t wait until full retirement age (FRA) to claim benefits, they get reduced permanently.

FRA is 67 for anyone born in 1960 or later. If you file for Social Security at 62 instead of waiting until 67, you could be looking at a 30% reduction in your monthly benefits — for life.

For this reason, seniors are often advised to proceed with caution before claiming Social Security early. And you’d think Dave Ramsey would tell retirees that filing for benefits at 62 is a poor choice.

Ramsey is known as someone who tries to help people attain financial security. He hates debt and is a strong believer in savings.

Surprisingly, though, Ramsey thinks it can be a very good idea to claim Social Security at 62. However, his advice comes with one big caveat.

Why Ramsey is a fan of claiming Social Security at 62

Even though claiming Social Security at 62 means reducing your benefits on a monthly basis, it could actually put more lifetime income in your pocket. Whether that happens depends on how long you end up living, which is something you can’t predict.

Ramsey recognizes that not everyone will live a long life. For this reason, he’s a fan of claiming Social Security early.

That said, Ramsey thinks an early Social Security filing makes sense when you don’t need the money per se. That way, you can invest your benefits and grow them into even more money.

It’s true that waiting on Social Security will result in larger monthly checks. However, Ramsey is convinced that smart investors can do better than the U.S. government when it comes to growing that money.

Take Ramsey’s advice with a grain of salt

Although it can be advantageous to claim Social Security at 62, Ramsey probably would not suggest doing so if you don’t have retirement income outside of those benefits. Also, if you’re not going to invest your benefits, then you may want to wait until FRA to sign up — especially if you have no health issues or reason to believe you won’t live a reasonably long life.

Remember, the one thing Ramsey hates is seeing people go into debt. If you claim Social Security early and find yourself struggling to cover your living costs as a result, you might land in debt accidentally.

That could be extremely problematic, because if you accrue debt as a retiree, you risk never paying it off in your lifetime. You also then have to deal with the stress of owing money hanging over your head.

If you’re having trouble deciding when to sign up for Social Security, talk to a financial advisor. A qualified advisor can review the details of your financial situation to help you choose a filing age that makes sense for you.