Is Dave Ramsey Wrong About Claiming Social Security Early? Here’s What Critics Say

Dave Ramsey often recommends taking Social Security as soon as you're eligible — which is currently age 62 — as a way to start extracting value from the system early. Yet many financial experts challenge this view, advising people to wait because of the permanent benefit reduction and risks involved. Knowing both sides is essential if you want to avoid money mistakes in retirement.

Here are five strong counterarguments to Ramsey's early claim philosophy.

One of the biggest criticisms is that if you claim benefits before your full retirement age (FRA), your monthly benefit is permanently reduced. For example, claiming at 62 instead of FRA, which for some is 67 depending on your birth year, may result in a roughly 30% smaller benefit for life.

In an article authored by financial experts Gary Smith, author and Fletcher Jones Professor of Economics at Pomona College, and Margaret H. Smith, Ph.D., a Certified Financial Planner (CFP®) professional, they both explain that the most relevant question to ask yourself is simply which starting age will maximize the present value of your lifetime Social Security benefits.

Remember that it's not just about getting income sooner; it's about how much you may need now and how much you may give up in later years.

Those who delay claiming until age 70 will collect larger monthly benefits over their lifetime than early claimants. If you live well into your 80s or 90s, this may prove to be a financially strategic decision. One critic opposes Rasmey's point of view, explaining that it's crucial not to underestimate the value of that longevity insurance.

"Considering that one of the biggest retirement concerns people have is outliving their money, waiting to collect Social Security benefits begins to make a lot more sense than it might have in the past," explained Ben Storey, director of Retirement Research & Insights at Bank of America. "Waiting to claim benefits can be a way of gaining a measure of protection against your risk of longevity."

In other words, delaying your benefits could prove wise if you end up living a very long life.

Although Social Security benefits are adjusted for inflation via COLA, smaller base amounts (from early claiming) grow more slowly in dollar terms. If you start with a reduced benefit, all future COLA increases will be applied to that lower base. 

As a result, over decades, the compounding effect can make delayed benefits increasingly larger in real terms. Another critic argues that it is critical not to downplay how inflation can amplify differences in benefits between early versus late claimers.

"If one is comfortable thinking about Social Security as a fixed-income asset, then delaying Social Security provides a higher present value of fixed-income assets on the household balance sheet," highlighted by Wade Pfau, Ph.D., CFA.

The longer you wait to claim benefits, the more your benefit will compound each year for life.

If one spouse claims early and receives reduced benefits, spousal and survivor benefits based on that work record will also be lower. That means that the financial safety net for a surviving spouse could be significantly smaller if the benefit for the spouse with the larger benefit was reduced by claiming too early.

"It often makes sense for the higher earner — let's say it's the husband — to wait until 66 or even 70 to claim benefits," highlighted Ben Storey, director of Retirement Research & Insights at Bank of America. "Doing so increases his benefits throughout his lifetime and, should he die first, throughout the remaining lifetime of his wife as well since her survivor benefit would step up to that of her deceased husband."

To Storey's point, Ramsey's advice about claiming benefits early may not account for how family dynamics and spousal survival affect long-term outcomes.

People may want to claim benefits early at age 62, as suggested by Ramsey, and take that money to invest in the stock market. However, Laurence Kotlikoff, an economics professor at Boston University and an expert on Social Security, says otherwise: "Absolutely, positively not. The answer is 'no.'"

Without sufficient savings or other reliable sources of income, people could end up not only locked into a lower benefit for decades, but also potentially face regret or financial hardship if their investments don't appreciate.

Dave Ramsey's advice to claim Social Security early makes sense in certain situations — especially if someone needs income immediately, has low life expectancy, or has minimal retirement assets — but for many people, it may lead to significantly lower lifetime benefit income. Critics argue that delaying filing as long as possible generally offers better financial protection over the long term.

Considering your health, savings, family situation, and the impact on spousal or survivor benefits is essential when devising your retirement plan.