The Social Security Claiming Age That Could Cost Retirees the Most

Dave Ramsey has built a huge following by giving clear, confident retirement advice, including when Americans should claim Social Security. His recommendation is easy to understand and appealing for future retirees who want a simple answer.

But Social Security timing is one of the most important retirement income decisions many people will make, and the best answer is not always the most popular one. When you compare Ramsey’s advice with research on lifetime benefits, the numbers suggest some retirees could give up meaningful income by claiming at the wrong age. Before locking in your benefits, it is worth looking at what the data says and how it compares with Ramsey’s approach.

Dave Ramsey has consistently advised his audience to claim Social Security as early as possible. On his podcasts and through Ramsey Solutions content, he has argued that starting benefits at age 62 is the smartest move for most people.

His advice is built around the idea that claiming early gives retirees more control over their money and reduces the risk of missing out on benefits later in life.

Ramsey offers several justifications for claiming Social Security at 62. First, he suggests that retirees should take benefits early and invest them, arguing that market returns could outperform the increase in benefits earned by waiting.

Second, he emphasizes that Social Security payments stop when you die, meaning money left unclaimed is money lost. Third, Ramsey believes that based on average life expectancy, most people will collect more total income by starting benefits earlier rather than delaying.

Age 62 is the earliest possible time to claim Social Security, but it also comes with the steepest penalties. Claiming before your full retirement age permanently reduces your monthly benefit.

At the same time, claiming early means giving up delayed retirement credits, which increase benefits for each month you wait beyond your full retirement age. Once you claim early, those higher future payments are gone forever.

For anyone born in 1960 or later, full retirement age is 67. Claiming at 62 results in a benefit reduction of about 30 percent compared to your standard benefit.

Delayed retirement credits work in the opposite direction. Waiting until age 70 increases your benefit by roughly 24 percent. The difference is substantial. Someone eligible for a $2,000 monthly benefit at full retirement age would receive about $1,400 per month at 62, compared to roughly $2,480 per month by waiting until 70.

Ramsey argues that delaying benefits only makes sense if you live long enough to make up for the payments you skipped. If you die early, he says, waiting was a losing decision.

This idea appeals to people worried about health or longevity, but it assumes that most retirees will not live long enough to benefit from higher monthly payments. The data suggests otherwise.

Multiple studies contradict Ramsey’s conclusions. A 2019 United Income study found that only 6.5 percent of retirees received more lifetime income by claiming before age 64. Meanwhile, 57 percent earned more by waiting, with early claimers leaving an average of $111,000 uncollected.

Research from the National Bureau of Economic Research found that about 90 percent of younger workers are better off delaying Social Security. Optimizing benefits by waiting until age 70 increased lifetime household wealth by more than $180,000.

Ramsey’s strategy relies heavily on successful investing late in life to make up for permanently reduced benefits. That approach adds risk at a time when most retirees need stability, not volatility.

The data shows that delaying Social Security, when possible, significantly improves the odds of maximizing lifetime income. For retirees who can afford to wait, patience tends to deliver far better results than claiming early and hoping investments fill the gap.