Money Talks News may earn commission or revenue through links in the content below. Our editorial team independently selects all products. Compensation does not influence our recommendations.
Dave Ramsey has a Social Security strategy that sounds almost reckless coming from the king of playing it safe: claim your benefits at 62, the earliest age there is, and invest every check (1). And with the program’s trust fund projected to run short in 2032, a lot of people are ready to follow him out the door in a panic.
I’ve been a CPA since 1981. I’ve run the retirement math for more people than I can count, so let me say it plainly: for a small, specific group, Ramsey’s plan holds up. For most people claiming out of fear, it’s one of the costliest mistakes they’ll ever make.
Here’s what’s fueling the panic. The Social Security Administration’s 2026 Trustees Report says the retirement trust fund will be depleted in late 2032, and could then pay only about 78% of scheduled benefits (2). A 22% cut is real, and it’s frightening.
But look at what claiming early actually does. File at 62 with a full retirement age of 67, and your benefit drops 30% — permanently, for the rest of your life (1). You’d be locking in a bigger, guaranteed cut to dodge a smaller one Congress may well fix.
That’s the trap. Here are five reasons panic-claiming at 62 could cost you for life.
1. You’d lock in a 30% cut to dodge a 22% one
The panic math falls apart the moment you write it down. If Congress does nothing, the shortfall means a benefit cut of about 22% starting in 2032 (2)(6) — a reduction of roughly $18,400 a year for a typical two-earner couple retiring around then (6).
That’s real. But notice the depletion date only crept up because of a 2025 tax law, not some sudden collapse (7). This is a slow, fixable problem — and lawmakers have never once let those checks actually get cut for 70 million voters.
Claiming at 62, though, cuts your benefit 30% (1). That one isn’t a maybe, and it isn’t temporary. As a CPA, I’ll tell you straight: accepting a certain, permanent 30% haircut to avoid a possible 22% one isn’t a hedge. It’s a worse deal, chosen out of fear. The real tradeoffs between claiming at 62, 67 and 70 are worth understanding before you decide.
2. You’d be giving up a guaranteed 8% raise — every single year
Here’s the part Ramsey glosses over. For every year you wait past full retirement age, up to 70, the government adds about 8% to your check — guaranteed, and adjusted for inflation for the rest of your life (3).
There’s no bond, no CD, no “good mutual fund” that promises 8% a year with zero risk. Ramsey’s whole case is that disciplined investing beats that guaranteed increase.
Maybe it does — if the market cooperates, if you never touch the money, if you dodge a bad decade. That’s a lot of ifs to stake your lifelong income on when the alternative is a sure thing.
The catch is that the right answer genuinely depends on you — your health, your other income, how long people in your family tend to live. This is exactly the kind of once-and-permanent decision worth running past a professional before you file.
If there’s one time in your life that you could use another set of expert eyes, this is it. Approaching retirement is when you need to talk to a fiduciary financial advisor.
It’s not hard to find one. SmartAsset, for example, offers a free service that instantly matches you with up to three fiduciary advisors – legally required to prioritize your interests. They can help with Social Security strategies, spot tax savings, and uncover planning gaps you’d never see alone.
They might also help you make more money. One Vanguard study shows DIY investors turn $500K into $1.7 million over 25 years – while those with advisors reach $3.4 million. You could be missing half your potential wealth.
If retirement is anywhere near your time horizon, there are plenty of reasons to talk to a pro, and since first appointments are free, very few reasons not to.
$100k+ in investments? Get matched free in minutes.
3. It only works if you invest every check — and almost nobody does
Read Ramsey’s advice closely and there’s a condition most people skip right over: the plan only works if every single check goes straight into investments, not into your checking account (4)(5).
In the real world, that’s not what happens. The money lands, the bills land, and the checks get spent (5). The instant that starts, the strategy collapses — you’re not out-investing anyone. You’ve just locked in a smaller benefit for life.
I’ve watched this play out for 40-plus years. The plan that demands perfect discipline almost always loses to the plan that demands none.
One thing before we keep going — the financial world is louder and dumber than ever. Hot takes everywhere. Almost none of it is worth your time. I’ve spent 35+ years cutting through the noise so you don’t have to. Sign up for the free Money Talks Newsletter — 10 seconds, no spam, just the stuff that matters.
4. The earnings test can swallow the checks you meant to invest
Here’s a wrinkle Ramsey’s fans rarely hear. If you claim at 62 but you’re still working, Social Security’s earnings test kicks in. In 2026, earn more than $24,480 and the government withholds $1 in benefits for every $2 you make above that line (8).
Now, that money isn’t lost for good. Once you reach full retirement age, Social Security recalculates your benefit and credits you back for the withheld months as a higher monthly check (8). But here’s the catch for Ramsey’s plan: you don’t see those dollars for years — so they never spend that time compounding in the market, which was the entire reason to claim early in the first place.
So for a lot of 62-year-olds who are still working, the invest-it math breaks before it even begins.
5. Claim into a bad market, and the whole plan comes apart
This is the one that worries me most. Ramsey’s plan assumes your invested checks grow. But I’ve watched every downturn since the early 1980s, and I’ve seen what happens to people who start feeding money into the market right as it rolls over.
Claim at 62 into a rough stretch and you’ve done two kinds of damage at once: permanently cut your guaranteed benefit, and dropped fresh money into a falling market. That guaranteed 8% raise from Social Security doesn’t care what stocks do. But the money you have in the stock market does.
There are plenty of good reasons to think twice about claiming at 62, and this is near the top.
The bottom line
Let me be fair to Ramsey. If you’re fully retired, genuinely disciplined, don’t need the money to live on, and have real reason to think you won’t reach your 80s, claiming early and investing can make sense. That’s a narrow group — and if it’s you, go for it.
For everyone else, panic-claiming at 62 over a 2032 headline is exactly backward. You’d be shrinking the one piece of your retirement the market can never touch — the guaranteed, inflation-proof, lifelong check — to chase a plan that needs everything to break right.
Social Security isn’t a race, and it isn’t a lottery ticket you have to cash before it expires. Take a breath, run your own numbers, and decide with a clear head. Because this is one decision you don’t get to make twice.
Sources: 24/7 Wall St. (1); Social Security Administration (2); 24/7 Wall St. (3); AOL (4); FinanceBuzz (5); Committee for a Responsible Federal Budget (6); Bipartisan Policy Center (7); Social Security Administration (8).
Add a Comment