Dave Ramsey Says Claim Social Security at 62 and Suze Orman Says 70. Who's Right?

"In a nutshell, they're based on your 35 highest-paid years of earnings. Earlier wages of yours are adjusted for inflation, and a formula is used to figure out what monthly benefit you're entitled to at your full retirement age (FRA). You don't have to claim Social Security at FRA, though, which is 67 for anyone born in 1960 or later. You're allowed to take benefits as early as age 62, or you can delay your claim until age 70 for boosted monthly checks."

"The reason Ramsey suggests claiming Social Security at 62 is simple. The earlier you sign up for benefits, the more monthly checks you might collect in your lifetime. Ramsey is also a fan of claiming Social Security early and investing that money to grow it into a larger sum. The reality, though, is that most early filers probably won't do that."

"Orman, on the other hand, likes the idea of taking Social Security at 70 for larger monthly checks. Orman is aware that many Americans don't have much retirement savings, so filing for Social Security at 70 is a way to compensate for that to some degree. Also, Social Security is many people's only source of guaranteed retirement income. Even people with savings risk having that money run out eventually. A larger monthly Social Security check could lead to more peace of mind throughout retirement."

Social Security monthly benefits are calculated from a worker's 35 highest-paid years, with earlier wages indexed for inflation and a formula determining the full retirement age (FRA) benefit. FRA is 67 for people born in 1960 or later. Claiming can occur between ages 62 and 70; earlier claims produce smaller monthly checks but more years of payments, while delaying increases monthly benefits. Some advisors recommend claiming at 62 to collect payments longer and invest them; others recommend waiting until 70 to maximize guaranteed monthly income. Many Americans rely heavily on Social Security, so understanding tradeoffs and running numerical scenarios is essential.

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