Why Dave Ramsey Is Absolutely Right About Taking Social Security at 62

What’s the best time to take Social Security? If you listen to finance guru Dave Ramsey, the answer is clear. Ramsey recommends that you start benefits at age 62. Since that’s the earliest age when benefits begin, he’s urging his audience to start getting checks ASAP. 

Here’s why Ramsey has made this suggestion, along with some reasons why he may be exactly right about telling retirees to take this approach.

Here’s why Ramsey thinks you should take Social Security at 62

Dave Ramsey has commented on video that the best age to take Social Security is 62, and there is also an article on the Ramsey Solutions website addressing this issue. The Ramsey Solutions article advises taking benefits at the earliest possible age of eligibility for a few key reasons.

“In most cases, it actually makes more sense to take your retirement benefits sooner instead of waiting later. Why? Because your retirement payments die when you die… so you might as well take the money and make the most of it while you can,” the article said. It goes on to explain that there are many situations where delaying would give you lower lifetime benefits, including if you die at or before the average life expectancy. And, the article said that you’re better off claiming ASAP so you can enjoy your benefits for more years of retirement. 

Ramsey also recommends claiming the benefits early and investing them, even if you don’t need them right away. “After all, you can do a much better job investing that money than the government ever could,” the article read — and the advice mirrors what Ramsey said in a video to a caller who asked about the optimum time for a benefits claim.

Here’s why Ramsey is right

Ramsey’s advice is spot on for many retirees. The reality is that delaying a benefits claim beyond the age of 62 does increase the amount of your monthly check, but that doesn’t mean it’s the right choice.

Many people need to start Social Security checks ASAP so they can retire without draining their retirement accounts or without waiting all the way until their late 60s, or even until 70, which is the age you’d need to claim benefits in order to max out your monthly income.

Putting off retirement and staying in the workforce for longer may not make sense, as most people only have so many years when they can enjoy a healthy retirement. Giving up those years just to get a slight increase in Social Security benefits may be a decision that seniors come to regret if their health declines during that time and they can’t enjoy traveling or living their dream retirement.  Likewise, if you spend too much out of your retirement plans too quickly and drain those accounts dry, you’ll end up worse off in terms of your overall financial situation than if you’d just claimed Social Security in the first place. 

Social Security benefits are also specifically designed to equalize out lifetime income for early and late claimers. In other words, there’s not supposed to be a benefit to doing one or the other. That’s why the system of early filing penalties and delayed retirement credits exists. Sure, you may end up with more lifetime benefits if you wait, but that requires beating the expectations for how long you’ll live. And, in order to earn a meaningful amount of additional income from delaying your benefits claim, you’d need to live a long time after you finally claim benefits to collect enough from the extra amount in your check each month that resulted from waiting.

Of course, if you can claim early and invest the money, that can also make good sense as well, since relatively safe investments like the S&P 500 have historically produced 10% average annual returns — which is a higher ROI than you get from a delayed claim. 

For all these reasons, if you’re trying to decide when to claim Social Security, you should seriously consider following Ramsey’s advice and claiming benefits at 62. However, Ramsey also advises talking to a financial advisor about your particular situation, as there could be other factors in play as well, such as the impact of an early claim on survivor benefits. A conversation with your advisor will help you to make the best choice given your age, marital status, health status, income, and goals for your retirement, so you can have the most secure future possible.