Dave Ramsey’s Social Security Advice Is Unpopular Among Experts – But It’s Probably Right for a Very Specific Reason Quick Read – Ramsey’s “invest the checks” logic is flawed because delaying Social Security delivers a guaranteed 8% annual increase, beating risk-adjusted stock…
rket returns every time. – Waiting until 70 pays roughly $13,000 more per year than claiming at 62, with the break-even point falling at ages 80 to 82, which is well within average life expectancy. – Most Americans claim at 62 out of necessity. With average 401(k) balances around $246,500 at retirement, burning savings to delay Social Security creates dangerous sequence-of-returns risk. – Dave Ramsey has spent years telling listeners that the conventional wisdom on Social Security is wrong
His position: claim at 62, the earliest age you can, and invest every check. “It usually makes sense to take it earlier and invest it,” he has argued on his show, calling the program a “mathematical disaster” he wants out of as fast as possible. Almost every retirement planner disagrees. The Social Security Administration mechanically increases your monthly check by about 8% for each year you delay claiming up to age 70, and reduces it by up to 30% if you claim at 62.
Following Ramsey and getting the math wrong means locking in a smaller check for the rest of your life, with no take-backs. The verdict: right answer, wrong reason Ramsey is probably right that most Americans should claim early. His reasoning, that you’ll beat the system by investing the checks, does not hold up.