Kevin O'Leary and Dave Ramsey Disagree on Social Security at 62 - Who's Right?

Two of the most recognizable voices in personal finance land on opposite sides of a critical retirement question about when to claim Social Security benefits. Radio host Dave Ramsey often argues for taking benefits early, while investor Kevin O'Leary generally pushes the opposite philosophy.

While these two experts disagree on Social Security at 62, it is a real concern that retirees face when deciding on smart money moves for seniors. The right answer often depends less on who is correct and more on your personal situation. Learn more about the pros and cons of claiming Social Security at 62 and what you're giving up by claiming benefits early.

Why claiming Social Security at 62 sparks debate

Age 62 matters because it is the earliest age you can claim Social Security retirement benefits. However, the trade-off is permanent: claiming early reduces your monthly benefit for life. Social Security benefits are reduced by up to 30% if you start collecting checks at 62 instead of waiting until full retirement age, which is 67 for many current retirees.

Not only are your benefits cut if you claim early, but you'll also miss out on delayed retirement credits that can boost your monthly deposits from Social Security. For every year you delay after full retirement age (up to age 70), you'll receive an 8% increase in your Social Security benefits for the rest of your life.

Your spouse can also benefit from the increased income if they receive spousal benefits based on your work history while you're alive and surviving spousal benefits after you've passed away.

The decision is tricky for many retirees: take smaller checks sooner or wait for larger guaranteed payments later.

Dave Ramsey's case: claim early and invest the money

Dave Ramsey's view focuses on control and investment growth. His philosophy assumes that disciplined investors can do better by putting the money to work rather than waiting for higher government payments. With the average stock market returns of 10%, he isn't wrong.

Ramsey has explained the concept bluntly when discussing the strategy on his show. As he put it, "It usually makes sense to take it early if you're going to... invest every bit of it."

The logic behind his argument is straightforward. If you claim Social Security at 62 and invest the payments in mutual funds or other growth assets, the investment gains may outpace the additional benefit you would receive by waiting.

Ramsey also frames the decision in terms of uncertainty about longevity and government policy. Getting the money earlier removes the risk of dying before collecting larger benefits. It also makes sense to start collecting Social Security if you're worried about benefits being cut if the trust fund runs out of money in the next decade, as recent calculations predict.

Supporters of this strategy point out that investing even modest monthly checks over several years could compound meaningfully. In Ramsey's framework, Social Security becomes seed capital for investing rather than a primary retirement income source.

Kevin O'Leary's case: delay benefits to maximize lifetime income

Kevin O'Leary approaches the issue of when to start collecting Social Security from the opposite direction. He views Social Security primarily as a guaranteed income stream designed to support retirees later in life.

O'Leary frequently emphasizes that retirees should treat Social Security as part of a broader income plan rather than relying on it alone. As he has explained, "Social Security was never designed to be a sole source of income."

From this perspective, delaying benefits increases the value of that guaranteed income. Because Social Security payments are indexed to inflation and backed by the federal government, waiting can function as a form of longevity insurance.

The longer you live, the more valuable those larger monthly checks become. Seniors who receive larger Social Security checks don't need as much money from other sources. They are less likely to need a part-time job in retirement, and they can let their investments continue to grow rather than taking larger distributions than are required each year.

Financial planners often highlight this same logic. Unlike investments, the increased Social Security benefit from delaying is guaranteed, while market returns are uncertain.

Running the numbers: claiming at 62 versus waiting

Consider a simplified example using a middle-class earnings history.

Assume your projected Social Security benefit is $2,000 per month at full retirement age (67).

• Claim at 62: $1,400 per month
• Claim at 67: $2,000 per month
• Claim at 70: $2,480 per month

The $1,000 difference per month is meaningful to most retirees. However, when you add it up over a lifetime, the cost of the decision is even more impactful.

Claiming Social Security at 62 gives you five extra years of payments before someone claiming at 67 begins. That totals roughly $84,000 in early payments. 

Someone who waits until 70 receives about $1,080 more per month than someone claiming at 62. Simple math estimates the "break-even age" around age 80. If you live longer than that, the delayed strategy typically produces more lifetime income. For those who die earlier, the early claiming strategy may pay more overall.

This is why there's no single "right" answer to the Ramsey and O'Leary debate.

When claiming at 62 may make more sense

Ramsey's strategy can make more sense if your personal circumstances favor earlier income. For example, if your health or family history suggests a shorter life expectancy, collecting benefits sooner may increase the total amount you receive over your lifetime. Claiming at 62 can also help if you need income immediately to support your retirement lifestyle or bridge a gap before other savings become available.

In addition, the strategy only works as Ramsey suggests if you have the discipline to actually invest the monthly payments rather than spend them. For retirees who are comfortable managing investments and already have other reliable income sources, claiming early can provide flexibility and potentially higher overall returns.

When waiting often produces better outcomes

O'Leary's approach tends to work better when maximizing guaranteed lifetime income is the priority. If you expect to live into your 80s or beyond, delaying benefits can significantly increase the total amount Social Security pays over time. Waiting can also be particularly valuable for married couples because the higher benefit may translate into a larger survivor benefit for a spouse.

This strategy is often attractive for retirees who do not have pensions or other reliable sources of guaranteed income. By delaying benefits, you essentially increase an inflation-adjusted income stream backed by the federal government, which can help protect your financial stability later in retirement.

Bottom line

The disagreement between Kevin O'Leary and Dave Ramsey reflects two fundamentally different retirement philosophies. One treats Social Security as money to invest early, while the other views it as longevity insurance to maximize guaranteed retirement income later. 

The best approach depends on your health, income needs, investment discipline, and household situation. Instead of asking who is right, you should focus on which situation most closely resembles your own retirement plan.

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