Personal Finance

Dave Ramsey's Advice To Take Social Security at 62 Is Actually Spot On - Here's Why

Christy Bieber

Published: March 16, 2025 11:12 am

Finance expert Dave Ramsey has made his position on Social Security clear. He believes that you should claim your benefits at 62, which is the earliest age that they become accessible. This may seem like odd advice from the finance guru, especially since many experts recommend waiting to claim benefits until you turn 70 (or at least for as long as possible). 

Experts typically recommend delaying your claim because each month you wait, up until age 70, will increase your payments. However, Ramsey suggests taking a different approach. Here’s what he thinks you should do — along with some insight into why he’s spot on. 

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 right away and then invest the money into a good mutual fund. 

“That one account will make you more than enough to cover up the difference between your 66 account and your 62 account,”  Ramsey said on his podcast about investing your benefit.  

Ramsey believes you can earn a better ROI by investing the money than just waiting for your benefits to grow over time, as they do if you sit back and wait. He thinks this in part because he believes that the Social Security benefits system is broken. 

Why Ramsey may be right

Ramsey has a good point about the benefits of investing Social Security rather than just waiting to claim to increase your checks. 

When you claim Social Security before your full retirement age (which depends on your birth year), you shrink your benefits by a small amount each month, which adds up to a 6.7% benefits reduction for each of the first three years you’re early and a 5% benefit reduction for each prior year before that. The ROI you get by waiting is avoiding these penalties.  On the other hand, if you wait beyond FRA, you increase benefits by 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.  You also benefit from compound interest once you invest your money, which means that your returns earn added returns. This helps your money to grow more quickly. 

Not only that, but 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 because it underestimates the true inflation retirees experience. The result of this problematic formula is that benefits have lost 20% of buying power since 2010, according to the Senior Citizens League. 

If you’d rather place your faith in your own investment ability rather than just sitting back and letting benefits inch up slowly a little bit each month even as their overall value erodes over time, then following Ramseys’ advice is the way to go.  Just be sure you have a very solid investment strategy and you actually commit to investing the funds. 

A financial advisor can help you to decide if this strategy is right for you, and can work with you on determining where you should put your money so you can make the most of Ramsey’s solid advice.