Dave Ramsey Has 2 Reasons Why You Should Claim Social Security at 62. They're Both Wrong

""In most cases, it actually makes more sense to take your retirement benefits sooner instead of waiting later. Why? Because your retirement payments die when you die... so you might as well take the money and make the most of it while you can," the Ramsey Solutions blog reads. The first big problem with this advice is that it's wrong."

"When Social Security was created, a system of early filing penalties and delayed retirement credits was included to try to ensure that you could claim at any age and still get the same benefits as someone who claimed earlier or later. But, life expectancies have changed since this system was put in place, and now research shows that as many as 90% of current workers will end up with more lifetime Social Security income if they wait until 70."

"So, while Ramsey said to grab the money before you die, odds are that you won't die before you break even for the delayed start to your benefits, and you could end up with hundreds of thousands of dollars in extra discretionary income if you delay your claim. The second big problem with this advice is that it could end up putting your spouse in a bad spot. If you are the higher earner and you die first, your spouse gets survivor benefits."

When eligible at 62, an individual can claim Social Security benefits but most financial experts recommend delaying benefit claims. One suggested reason to claim at 62 is to collect benefits early in case of dying young, but that reasoning is flawed. The Social Security system includes early filing penalties and delayed retirement credits intended to balance lifetime benefits across claiming ages. Life expectancies have increased, and research shows as many as 90% of current workers will receive greater lifetime Social Security income by waiting until age 70. Delaying benefits can yield substantially more discretionary income and affects survivor benefits for a spouse.

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