Following Suze Orman’s Social Security Advice Over Dave Ramsey’s Could Make You $182,370 Richer

When should you claim Social Security benefits? Everyone who is retiring must grapple with this question, and because you can claim Social Security benefits at any time between age 62 and 70, it’s a hard decision that prompts many seniors to look to experts for help.

Unfortunately, experts don’t always agree on the best age. In fact, Suze Orman and Dave Ramsey have both made recommendations about when to start your checks for the first time. The issue is, their recommendations are as opposite as you could get.

If you listen to or trust both experts and are confused about which one to listen to on this issue, it’s worth noting that Orman’s position ends up being the one that most outside data supports. In fact, listening to Orman over Ramsey could actually leave you with $182,370 more in lifetime discretionary spending. 

Here’s why. 

Ramsey vs. Ormn on when to claim Social Security 

When it comes to the optimum Social Security claiming age, Ramsey has made clear that claiming at 62 is the best choice. His position is that you may as well start collecting benefits ASAP because you don’t know how long you’re going to live. If you wait, there’s a good chance that you won’t earn enough higher benefits later to make up for the income that you missed out on. 

Ramsey also suggested a strategy where you claim Social Security ASAP at 62 even if you don’t need the money, and you then invest it. He believes you can earn better returns than if you just leave your benefits unclaimed and allow them to grow by avoiding early filing penalties and earning delayed retirement credits. Those penalties and credits apply depending on whether you claim Social Security before or after your full retirement age as you only get your standard benefit if you claim right at FRA. 

Orman, on the other hand, advises waiting as long as you can, and ideally waiting until the latest possible claiming age, stating, “As I have explained many times, when you wait to claim Social Security, you are promised a bigger payout. A much bigger payout.” Orman says the odds are you will live long enough that delaying results in more lifetime benefits, and that having the highest possible benefit will be important if your savings start to run out later in life. 

Here’s why following Orman’s advice could leave you with more cash in retirement

Orman is absolutely right in her arguments, and the data backs her up. Most people do outlive the life expectancies that were put in place when Social Security’s system of early filing penalties and delayed retirement credits was created. Because of that, most people end up better off if they wait for benefits.

In fact, research from the National Bureau of Economic Research revealed that “virtually all” American workers who are between the ages of 45 and 62 will end up in a better financial position by waiting beyond the age of 65 to get benefits and over 90% should wait until the age of 70. Since only 10.2% actually do this, the median loss in discretionary spending among people in this age group is around $182,370.

No one wants to lose almost $200,000 in lifetime spending, so it is pretty clear in this case that listening to Orman’s advice is going to be the right financial choice for most retirees.