Dave Ramsey’s Advice to Take Social Security at 62

Dave Ramsey is known for offering bold, straightforward financial advice. Though his advice is smart, it sometimes challenges conventional wisdom. One of his more debated positions involves when to claim Social Security benefits. While many financial experts recommend delaying benefits for as long as possible to maximize monthly payments (especially if you are likely to live to an advanced age), Ramsey has suggested that most people would benefit from claiming as early as age 62 and putting that money to work elsewhere.

His approach centers on the idea that consistent and disciplined investing can very likely outperform the guaranteed increases that come with waiting. However, this strategy isn’t without risks and trade-offs, especially when factors like market performance come into play. Afterall, returns are never guaranteed. Here’s a closer look at Ramsey’s advice, how it works, and whether it makes sense for your financial situation.

Ramsey says you should claim Social Security early for one key reason

Ramsey doesn’t believe you should grab your Social Security check at the youngest possible age and start living a life of leisure with it. Instead, he believes that the best course of action is to start your payments as soon as you’re eligible and then invest the money into a good mutual fund. 

Ramsey argues that, if invested successfully, those funds could potentially outpace the increase in benefits from delaying.

Though delaying benefits effectively increases your guaranteed monthly income, Ramsey believes you can earn a better ROI by investing the money you take from early withdraw. 

Why Ramsey may be right

Ramsey has an interesting point about the benefits of investing Social Security.

When you claim Social Security before your full retirement age (which depends on your birth year), your monthly benefit is permanently reduced. The reduction is about 6.7% per year for the first three years you claim early, and about 5% per year beyond that. By waiting until your full retirement age, you avoid these reductions. If you delay benefits beyond that point, your payments increase by about 8% annually until age 70.

There are a number of safe, reliable mutual funds and ETFs that have historically produced better returns than the ROI from a delayed claim (but results are not guaranteed and depend on market conditions). You also benefit from compound interest once you invest your money, which means that your returns earn added returns and your money grows more quickly. 

Social Security’s Cost of Living Adjustments, or periodic benefit increases designed to help benefits keep pace with inflation, are calculated using a formula that many believe is faulty. The CPI-W index underestimates the true inflation retirees experience by failing to accurately weight the fastest-inflating costs like healthcare, housing, and utilities. The result of this problematic formula is that benefits officially lost 13.7% of their purchasing power between 2016 and 2026, according to the Senior Citizens League. 

However, recent inflation spikes add a layer of complexity to Ramsey’s strategy. Following a jump in April 2026 inflation to 3.8%, the projected 2027 COLA was heavily revised upward to 3.9%. A higher COLA means guaranteed, inflation-adjusted growth on a larger baseline check if you delay. If you claim early at 62, that 3.9% boost applies to a permanently shrunken benefit, making it much harder for mutual funds to outpace the real-world compounding loss.

The 2032 Solvency Crisis and Benefit Caps

Another major factor that could support Ramsey’s “take the money early and control it yourself” advice is the looming threat to the system’s solvency. The Congressional Budget Office recently warned that the trust funds face depletion by 2032, which would trigger an automatic 28% across-the-board benefit cut if Congress fails to act.

To prevent this, policymakers are debating drastic measures, including a newly proposed “Six-Figure Limit” by the Committee for a Responsible Federal Budget (CRFB). This proposal would cap maximum benefits for a wealthy couple at $100,000 (or $50,000 for individuals) to close the funding gap. For high earners facing potential means-testing or future benefit caps, Ramsey’s advice to claim early and invest independently suddenly looks incredibly attractive.

Understand the Risks of Investing Your Benefits

Ramsey’s strategy of claiming early and investing the money depends on several important factors. Market performance plays a major role, and returns are never guaranteed, especially over shorter time frames. If you believe Ramsay’s plan to be fool proof, take a second to check your expectations.

This plan also requires discipline; you must consistently invest the money rather than spend it, which is straightforward in theory, but can be difficult in practice. If these conditions aren’t met, the strategy won’t outperform simply delaying benefits, making it important to carefully evaluate your financial habits and risk tolerance before choosing this approach.

Furthermore, many retirees treat Social Security like a bet on their lifespan, obsessing over “break-even” math. According to AARP, the break-even point for claiming at age 62 versus Full Retirement Age is 78 years and 8 months. Compared to waiting until age 70, the break-even age is 82 years and 6 months. However, the Social Security Administration recently discontinued its online break-even calculator because it frequently led beneficiaries to claim too early. Financial experts warn that treating Social Security purely as an investment completely ignores its primary function: providing longevity insurance against the financial risk of outliving your savings.

Editor’s Note: This article contains newly added sections addressing the revised 3.9% COLA projection for 2027 and the Senior Citizens League’s updated data showing a 13.7% loss of purchasing power between 2016 and 2026. The text also incorporates details regarding the AARP break-even milestones, the Congressional Budget Office’s 2032 solvency timeline, and the Committee for a Responsible Federal Budget’s proposed benefit caps for high earners.