One of the hardest financial decisions you might have to make as retirement nears is when to claim Social Security. That’s because your filing age will have a big impact on the amount of money you receive each month.
Let’s say your full retirement age (FRA) is 67, at which point you’re entitled to $2,000 a month in Social Security. If you file for benefits early, those monthly checks will be reduced. If you file after FRA, those benefits will be boosted.
The earliest age to claim Social Security is 62. With a $2,000 benefit at FRA, filing at 62 means whittling your monthly checks down to about $1,400.
On the other hand, if you delay your claim until age 70, your $2,000 monthly benefit becomes roughly $2,480. There’s no sense in delaying Social Security beyond age 70, since your benefits can’t grow after that age.
Financial experts Dave Ramsey and Suze Orman have opposing views when it comes to claiming Social Security. Here’s what they each say — and whose advice you should listen to.
When Ramsey says to claim Social Security
According to Dave Ramsey, age 62 is the optimal age to claim Social Security. Although that results in smaller monthly checks, Ramsey’s logic is that filing at that point makes sense since you get to collect benefits for as long as you’re alive. If you file as early as possible, you may get more money in your lifetime from Social Security compared to filing later, especially if you pass away at a relatively young age.
Plus, Ramsey says that if you don’t need your benefits right away, you can invest your Social Security checks and grow them into more money. With the right portfolio, you could potentially boost those checks beyond what you’d get by waiting.
When Orman says to claim Social Security
Suze Orman is a fan of claiming Social Security at 70. Her logic is that you never know when you might end up living a longer life than expected. Boosting those Social Security checks is a good way to avoid a potential financial shortfall.
Plus, if you end up living a long life, delaying Social Security could result in more lifetime income from the program. And if you’re married, the larger your monthly benefits are, the larger a survivor benefit your spouse may be entitled to.
Whose Social Security advice should you follow?
If you’re wondering whether you should listen to Ramsey versus Orman, the answer may be neither. There’s really no such thing as a “perfect” Social Security filing age. The optimal age to take benefits depends on your personal circumstances.
Here are some factors to consider when making your choice:
- Your health. If it’s poor, filing early like Ramsey suggests could be a good idea. If it’s great, you may want to delay your claim as long as possible.
- Your savings. If you don’t have much money saved for retirement, delaying Social Security for larger checks could pay off. If you have plenty of savings, an earlier filing is less risky.
- Your marital status. If you’re single, you may be inclined to start getting benefits sooner. If you want to take care of your spouse after you pass, waiting could be the better move.
All told, neither Ramsey or Orman is right or wrong on Social Security. It’s important to understand the logic behind their stances. But beyond that, it’s up to you to make your own decision on what to do.
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