Dave Ramsey’s Social Security Advice Could Cost You $182,370. Here’s Why

Dave Ramsey has weighed in on a wide range of personal finance topics, and not all of his guidance holds up under scrutiny. His position on credit scores is one example. His advice on when to claim Social Security is another, and for retirees who follow it, the consequences are permanent. Ramsey has repeatedly pushed the idea of claiming benefits as early as possible, a choice that research shows can cost the typical household more than $182,000 in lifetime income.

Here is what Ramsey actually recommends, and why the math argues against it in the current economic environment.

Ramsey’s Recommended Age to Claim Social Security

In a 2019 podcast, Ramsey recommended claiming Social Security at 62, the earliest age at which you can claim retirement benefits. Following that advice means starting checks well before your full retirement age.

This remains the official position published on the Ramsey Solutions blog. The argument is that since “retirement payments die when you die,” you should collect immediately and invest the proceeds. That logic, however, ignores the guaranteed, inflation-adjusted return that comes from delaying. For the typical retiree, overlooking it can cost $182,370.

Why Early Claiming Is So Costly

Research from the National Bureau of Economic Research shows that waiting until age 70 is the optimal strategy for more than 90% of Americans, yet only about 10% actually do so. Claiming early produces a median loss of $182,370 in household lifetime discretionary spending. That figure reflects the compounding cost of locking in a reduced base benefit for the entire length of retirement, and it understates the damage for higher earners.

For workers born in 1960 or later, full retirement age is 67. Claiming at 62 rather than waiting until FRA triggers a permanent 30% reduction in monthly benefits. Every future cost-of-living adjustment is then applied to that already-reduced base, so the dollar gap between an early claimer and a patient one widens with each passing year. The Social Security Administration’s January 2026 data illustrates this clearly: the average retired worker receives approximately $2,071 per month, a figure that reflects the 2.8% COLA that took effect that month but that assumes a mix of claiming ages. The gap between what early and late claimers actually receive is considerably larger.

The 2026 Numbers

The current economic context makes Ramsey’s one-size-fits-all recommendation look even weaker. The Social Security Administration announced a 2.8% cost-of-living adjustment for 2026, confirming the average retired worker’s monthly benefit at $2,071. That adjustment protects purchasing power, but it operates on whatever base benefit was locked in at claiming age. A retiree who claimed at 62 receives the same 2.8% applied to a check already reduced by 30%, so the dollar boost is smaller in absolute terms every single year.

Higher earners face additional headwinds. The maximum taxable earnings ceiling rose to $184,500 in 2026. For those attempting to work part-time while drawing benefits before full retirement age, the earnings test limit stands at $24,480 annually. For every $2 earned above that threshold, the SSA withholds $1 in benefits, a clawback mechanism that can quickly unravel the cash-flow math underlying Ramsey’s “invest the difference” strategy. Withheld benefits are not permanently lost: the SSA recalculates your monthly benefit after FRA to credit months when benefits were withheld. Even so, managing the cash-flow gap in the years before FRA is a genuine challenge for most retirees.

The Bridge Strategy and Sequence-of-Returns Risk

A more disciplined approach, often called the “bridge strategy,” has retirees draw down traditional 401(k) or IRA assets to cover living expenses between ages 62 and 70. That keeps Social Security benefits growing at roughly 8% per year in delayed retirement credits, the highest guaranteed real return available to most Americans. The practical payoff is significant: by deferring Social Security, retirees avoid being locked into a permanently smaller check. For the large share of households that depend entirely on Social Security, the stakes could not be higher.

Healthcare costs compound the problem for early claimers. Standard Medicare Part B premiums rose nearly 10% for 2026, reaching $202.90 per month, up from $185 in 2025. Those premiums are deducted directly from Social Security checks for most enrolled beneficiaries, so a retiree who claimed at 62 starts from a smaller base and then watches a rising mandatory expense consume a growing share of it. The cash available for Ramsey’s hypothetical market investments shrinks accordingly.

Spousal Coordination and the Reset Option

Blanket advice to claim early also tends to ignore the spousal dimension of Social Security planning. A common and often superior approach has the lower-earning spouse claim early to provide immediate household cash flow while the higher earner waits until 70. Because the survivor benefit is tied to the higher earner’s benefit at death, that delay protects the remaining spouse from a sharp income drop later in life. For married couples, this coordination strategy can add tens of thousands of dollars in lifetime household income over what either spouse could capture by both claiming early.

For those who have already taken Ramsey’s advice and now regret it, a limited remedy exists. Social Security Form 521 allows a one-time withdrawal within the first 12 months of claiming, provided the beneficiary repays all benefits received. That window is narrow, but it is available.

The Trust Fund Question

Fear that Social Security will “go bankrupt” is a common reason people cite for claiming early, and it is also one of the most misunderstood arguments in retirement planning. The 2026 Social Security Trustees Report, released on June 9, 2026, provides the clearest current picture of where the program stands. And that fear has already translated into costly action: Social Security applications surged approximately 13% in fiscal year 2025, according to Urban Institute analysis of SSA data, as many Americans rushed to file amid uncertainty about the program’s future and concerns about staffing reductions at the SSA. An AARP survey found that 49% of Americans age 50 and older who claimed or considered claiming early cited media reports that Social Security was “running out of money” as an influence on their decision.

The Trustees project the combined Old-Age, Survivors, and Disability Insurance trust funds will remain sufficient to pay 100% of scheduled benefits through the third quarter of 2034. At that point, ongoing payroll tax revenue is projected to cover 83% of scheduled benefits. The retirement-only OASI trust fund faces a tighter timeline: reserves are projected to run out in the fourth quarter of 2032, at which point incoming tax revenue would fund 78% of scheduled retirement benefits. Even at those dates, the program does not face a complete shutdown. Benefits continue, funded by ongoing payroll contributions from active workers.

The Trustees identified several forces driving the worsened long-term outlook. The assumed long-run fertility rate was cut, and projected net immigration was revised downward. Both demographic changes reduce the number of future workers paying into the system. The 2025 One Big Beautiful Bill Act also played a role, lowering income taxes on Social Security benefits and thereby reducing revenue flowing back into the trust funds. The Social Security Fairness Act, which repealed the Windfall Elimination Provision and Government Pension Offset, increased program outlays as well. Together, these factors pushed the program’s 75-year funding gap to 4.42% of taxable payroll, up 16% from the prior year’s estimate, according to J.P. Morgan Asset Management’s analysis of the Trustees Report.

Claiming at 62 out of solvency fear means locking in a permanent 30% reduction today. That self-imposed cut is far larger than the 17% shortfall that would arise from combined fund depletion in 2034 without any congressional action, and larger still than the 22% OASI-only cut that would result in 2032 under current law. Retirees who panic-claim are trading a certain, deep, and permanent loss for protection against a prospective and partial one that Congress has historically acted to prevent.

The evidence argues against the early-claim approach for most households. Guaranteed real returns from delayed benefits, survivor protections for spouses, and the structural resilience of Social Security funding all point toward patience over panic.

Editor’s note: This pass updated the Social Security applications surge figure from “roughly 11%” to approximately 13% in fiscal year 2025, per Urban Institute analysis of SSA data, and added an AARP survey finding that 49% of Americans age 50 and older who claimed or considered claiming early cited fears about the program running out of money. The unverified dollar figures for the program’s 75-year shortfall were replaced with the verified 4.42% of taxable payroll figure from J.P. Morgan Asset Management’s review of the 2026 Trustees Report, and the unverified trust fund reserve balance was removed.

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