Is Dave Ramsey Right About Claiming Social Security at 62? The Math, Tested

Key Points:

• Financial expert Dave Ramsey advises claiming Social Security benefits at age 62 and investing the payments early to potentially grow retirement savings through market returns, assuming an average return of over 8%.
• Social Security rewards delaying benefits with higher monthly payments, increasing about 8% per year after full retirement age (FRA) up to age 70, along with cost-of-living adjustments, providing a guaranteed income boost.
• The break-even age to recover the total lifetime benefits from waiting versus claiming early is around 80-82; those with shorter life expectancy may benefit more from early claiming, while longer-lived individuals gain from delayed benefits.
• Risks to Ramsey’s approach include stock market volatility, the impact on survivor benefits for spouses, and the Social Security earnings test that can reduce benefits if working before FRA, potentially disrupting investment plans.
• Early claiming may be suitable for individuals needing immediate income, those in poor health, or without dependents, highlighting the importance of personalized retirement planning rather than a universal rule.