Why does Dave Ramsey say you should take social security at 62?
Asked by: Bartholome Adams | Last update: February 8, 2026Score: 4.1/5 (70 votes)
Dave Ramsey says to take Social Security at 62 and invest the money because you could potentially earn higher returns in the market than the guaranteed annual increase from waiting, and Social Security benefits stop when you die, so you might as well get the money sooner to grow it, but this advice comes with major caveats, including the risk of lower spousal benefits and the need for disciplined investing. He emphasizes taking the money and investing it aggressively in the market for potentially better, faster growth.
Does Dave Ramsey suggest taking Social Security at 62?
Dave Ramsey recommends claiming Social Security at 62 to invest the money for potentially higher returns than delayed benefit growth. Ramsey warns delaying benefits risks dying before breakeven. Someone claiming at 70 and dying at 77.5 may not recoup missed payments.
What does Suze Orman say about taking Social Security at 62?
Suze Orman strongly advises against taking Social Security at 62, calling it a "costly cut" that permanently reduces your monthly benefit by up to 30% compared to your full retirement age, urging people to delay until at least full retirement age (FRA) or ideally age 70 for the highest possible payout, especially if in good health, though she acknowledges claiming at 62 might be necessary if you have no other income and poor health. She emphasizes that the higher payments from delaying offer greater lifetime security, benefit your spouse, and that waiting helps you "be kindest to your future self".
What is Dave Ramsey's warning about Social Security?
Dave Ramsey has a dire warning about Social Security
He explained that 62% of current retirees report Social Security is a "major source of income," but just 35% of today's workers expect the same from their benefits by the time they retire.
What does Warren Buffett say about Social Security?
Warren Buffett's core message on Social Security is that cutting benefits is a major mistake, and Congress must act to fix the program's funding issues, advocating for higher taxes on high earners by raising or eliminating the wage cap and even suggesting increasing the retirement age, viewing Social Security as a crucial societal safety net for dignity, not just an investment. He stresses the need for prompt action to prevent future benefit cuts that would hurt millions, emphasizing that the country can afford the solution, which involves higher contributions from the wealthy.
When Is The Best Time To Start Collecting Social Security? - Dave Ramsey Rant
Do wealthy people take Social Security?
The short answer is yes. Under the current law, an individual's wealth or current income level has no impact on their eligibility to receive a Social Security retirement benefit. In other words, even if you have $10 billion in assets, you could qualify for Social Security as long as you meet the requirements.
Why does Dave Ramsey not recommend whole life insurance?
Dave Ramsey dislikes whole life insurance because he sees it as an expensive, complicated financial product with low investment returns, high fees, and a poor structure compared to buying cheap term life insurance and investing the savings separately. His main criticisms are that it's overpriced (up to 10x term), its cash value grows slowly (low ROI like 1-2%), and the insurance company keeps the cash value when the insured dies, making it an inferior way to build wealth compared to traditional investing, he argues.
What is the smartest age to collect Social Security?
The best age to take Social Security depends on your situation, but age 70 maximizes your monthly benefit, with studies suggesting it's optimal for most people, while claiming at Full Retirement Age (FRA) (around 67 for recent birth years) provides 100% of your benefit, and claiming as early as age 62 permanently reduces it but provides income sooner if needed. Waiting until 70 adds roughly 8% annually for each year past FRA, making it ideal for those who live long and can afford to wait, while 62 suits those needing immediate income, and FRA offers a balance.
What is the $1000 a month rule for retirement?
The $1,000 a month rule for retirement is a simple guideline stating you need about $240,000 saved for every $1,000 of monthly income you want from your investments, assuming a 5% annual withdrawal rate and a 5% annual return. It's a basic planning tool to estimate savings goals, suggesting you save $240,000 for $1,000/month, $480,000 for $2,000/month, and so on, but it doesn't account for inflation, taxes, or other income like Social Security, making it a starting point, not a complete strategy.
What are the 4 funds Dave Ramsey recommends?
And to go one step further, we recommend dividing your mutual fund investments equally between four types of funds: growth and income, growth, aggressive growth, and international.
Why do most people take Social Security at 62?
Five Reasons You Should Take Social Security At 62 (and Five Reasons You Should Wait)
- Health issues. ...
- You no longer want to work. ...
- You need cash now. ...
- You need to cover expenses and get out of debt. ...
- You fear benefits will dry up. ...
- Benefits are permanently reduced. ...
- Smaller cost-of-living adjustments. ...
- Penalty for working.
What is Dave Ramsey's 8% retirement rule?
Dave Ramsey's 8% rule suggests retirees can withdraw 8% of their starting retirement portfolio value annually (adjusted for inflation) by investing 100% in stocks, assuming a 12% average return to cover withdrawals and inflation, but it's highly controversial, differing sharply from the traditional 4% rule and exposing retirees to high risk from early market downturns (sequence of returns risk), though some argue it works with specific high-yield assets or if debt-free.
What is the average 401k balance for a 65 year old?
The average 401(k) balance for those 65 and older is around $299,000, but the median is significantly lower at roughly $95,000, meaning many people have much less, with data from late 2024/early 2025 showing figures like $299,442 (average) and $95,425 (median) for the 65+ group. This difference highlights that a few very large balances skew the average, making the median a more representative figure for what a typical retiree might have saved.
What is the 80 20 rule Dave Ramsey?
Dave Ramsey's 80/20 rule in personal finance is that success is 80% behavior and only 20% head knowledge; knowing what to do (the 20%) isn't enough, you must have the discipline to do it (the 80%) through actions like living on less than you earn, avoiding debt, and budgeting, which is the real challenge for most people. It emphasizes that financial discipline and controlling your actions, rather than just understanding financial concepts, are the keys to building wealth and achieving financial peace.
What is Dave Ramsey's recommended retirement amount?
Dave Ramsey suggests saving 15% of your gross income for retirement, aiming for a large nest egg (often around $1 million or more) that generates enough passive income for your lifestyle using a safe withdrawal rate like 4% or 8%, depending on your risk tolerance, to cover expenses without depleting the principal. The exact amount depends on your retirement spending goals, health care costs, and Social Security, but following the 15% rule and avoiding debt is key to reaching a substantial sum.
Can I retire at 62 with $400,000 in 401k?
Yes, you can retire at 62 with $400,000 in a 401(k), but it's tight and highly depends on your spending, lifestyle, investment mix, and other income like Social Security; it might be sufficient for modest living with careful planning, but working a few more years or drastically cutting expenses offers more security, with a financial advisor being key for success.
How many Americans have $1,000,000 in retirement savings?
Only a small fraction of Americans retire with $1 million or more, with figures often cited around 3-4% of all retirees, though some sources suggest a slightly higher number for those nearing retirement (around 9-10% for ages 55-64). Data from the Federal Reserve's Survey of Consumer Finances shows that while many aspire to this goal, the reality is that most fall short, with average savings for older households being significantly lower than $1 million.
How long will $500,000 last you in retirement?
$500,000 in retirement can last anywhere from under 15 years to over 30 years, depending heavily on your withdrawal rate (e.g., $20k/yr lasts ~30 yrs vs. $40k/yr lasts ~12-15 yrs), investment returns (higher returns extend life), inflation, taxes, and if you have other income like Social Security, with the 4% rule suggesting $20,000/year for 30+ years for a balanced portfolio.
What is a good monthly retirement income?
A good monthly retirement income is generally 70-80% of your pre-retirement income, aiming to maintain your lifestyle, but it varies greatly by location, healthcare needs, and spending habits; for many, this translates to $4,000 to $8,000+ monthly, covering basics to a comfortable life, with averages around $5,000/month for individuals and $8,300/month for couples, though median figures are lower, highlighting the importance of personal budgeting.
What does Suze Orman say about when to take Social Security?
Suze Orman strongly advises against taking Social Security at the earliest age (62) and recommends waiting as long as possible, ideally until age 70, for the highest monthly benefit, especially for the primary earner in a household, to provide a larger, inflation-adjusted income stream for a longer retirement. She emphasizes that delaying past your Full Retirement Age (FRA) of 67 (for most) until 70 offers a significantly higher, permanent monthly payment, making it a powerful tool for long-term financial security, even if it means tapping other retirement savings in your 60s.
What is one of the biggest mistakes people make regarding Social Security?
One of the biggest mistakes people make with Social Security is claiming benefits too early (at age 62), locking in a permanently smaller monthly check, rather than waiting until their Full Retirement Age (FRA) or even age 70 to receive significantly higher payments and larger cost-of-living adjustments (COLAs) over their lifetime. This decision permanently reduces benefits by up to 30% and forfeits substantial annual increases, creating a lasting financial shortfall.
Is Dave Ramsey a Trump supporter?
Ramsey supported Donald Trump in the 2024 United States presidential election.
What does Warren Buffett say about life insurance?
Warren Buffett loves the insurance business for the "float"—premiums collected upfront that can be invested for Berkshire Hathaway before claims are paid—making it a core part of his conglomerate, but he's been cautious about some life insurance products like variable annuities due to risky guarantees, even as his companies offer life insurance and reinsurance. While he uses life insurance for his own estate planning, the focus for Berkshire Hathaway (which owns GEICO, National Indemnity, etc.) is on the strategic advantage of this float for long-term investments, not necessarily selling standard policies.
At what age should you stop buying term life insurance?
You should stop term life insurance when your financial responsibilities end, typically in your 60s or 70s, after paying off your mortgage, raising dependent children, and having enough retirement savings to cover final expenses and support survivors. While there's no single "magic" age, dropping coverage around retirement makes sense as the need to replace income lessens, but consider your specific debts, assets, and beneficiaries before canceling, as premiums for new policies become expensive later in life.