Dave Ramsey Says Claim Social Security at 62. Suze Orman Says 70. Both May Be Wrong

When it comes to claiming Social Security, you have choices. The earliest age to sign up for benefits is 62. But you won’t get your monthly payments without a reduction unless you wait until full retirement age (FRA) to file. That age is 67 if you were born after 1959.

You can also delay your Social Security claim past FRA for boosted checks. Each year you hold off, up until age 70, gives your monthly benefits an 8% increase.

If you’re not sure when to sign up for Social Security, you may be inclined to see what financial experts like Dave Ramsey and Suze Orman have to say. Interestingly, Ramsey and Orman have opposite views when it comes to the optimal time to claim Social Security. And their advice may also be wrong for you.

Ramsey’s Social Security advice

Dave Ramsey tends to be an advocate of claiming Social Security at 62 — the earliest possible age to sign up. This is actually a bit strange for Ramsey because he tends to be financially conservative, urging Americans to avoid debt at all costs. So it’s odd to see him pushing Social Security at an age when it’s guaranteed to result in reduced benefits.

But there’s a reason for Ramsey’s guidance. The earlier you start collecting benefits, the more individual monthly payments you might end up with. Also, if you don’t need the money for living expenses, you can invest it and grow it into a larger sum.

Orman’s Social Security advice

Orman has the opposite advice when it comes to Social Security. She’s a big fan of delaying benefits until age 70.

Orman’s logic is that locking in the largest possible monthly benefit could lead to more financial security throughout retirement. It’s also a great way to make up for a lack of savings — something many older Americans need to do.

As of 2022, the Federal Reserve put median retirement savings among Americans ages 65 to 74 at just $200,000. Now there’s a good chance the Fed would find a higher number if it were to survey older Americans today, largely because the stock market has enjoyed nice gains in the past few years.

But even if we were to double that median balance to $400,000, it’s still not a ton of money in the context of what could be a 20-year retirement or longer for many people. So it’s easy to see why Orman is a fan of holding off on Social Security as long as possible and scoring the largest possible monthly payday.

Why you may not want to claim Social Security at 62 or 70

While Ramsey and Orman’s suggestions on claiming Social Security have merit, you may not want to follow either one’s advice.

The problem with claiming Social Security at 62 is obvious. You’re going to be reducing what could be your primary source of retirement income on a monthly basis for life. Unless your health is very poor and you don’t expect to live very long, that could be a dangerous move.

Plus, let’s be real — you’re probably not going to invest the money you receive from Social Security. And if that’s the case, you’re not going to make up for the reduction that comes with filing early.

On the other hand, you may not want to wait until age 70 to file for Social Security like Orman suggests. Unless you have a lot of savings, filing for Social Security at 70 could mean having to work until 70. You may not have the physical energy to do that.

It’s also not a given that you’ll be able to work until age 70. Health issues could force you to retire sooner, or you may get pushed out of a job due to age discrimination, which is illegal but unfortunately very hard to prove.

Instead of going to the extreme of filing for Social Security at 62 or 70, you may instead want a more middle ground solution. That could mean signing up for benefits at age 65 in conjunction with your Medicare enrollment. Or, it could mean signing up at FRA so your benefits aren’t reduced, but they also aren’t increased.

The decision to claim Social Security is a very personal one. You may find that filing at 62 like Ramsey says or waiting until 70 like Orman says makes sense for you. But it’s important to consider your own needs carefully before making that choice.