"Once you're old enough to claim Social Security, you'll have to make a tough decision. The earliest age to sign up for benefits is 62. But if you don't wait until full retirement age (FRA) to take benefits, they'll be reduced on a permanent basis. FRA is 67 if you were born in 1960 or later. If your FRA is 67 but you claim Social Security at 62, you're looking at reducing your monthly benefits by 30% - for life."
"As he says, "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." Ramsey's logic is that you might as well make the most of Social Security while you can. If you wait until age 67 to take benefits in order to avoid a reduction but end up passing away at 71, you'll lose out financially compared to having claimed benefits at 62."
Social Security can be claimed as early as age 62 but benefits taken before full retirement age (FRA) are permanently reduced. FRA is 67 for people born in 1960 or later, and claiming at 62 with FRA 67 reduces monthly benefits by about 30% for life. Dave Ramsey recommends taking benefits at 62 because payments stop at death, so earlier claiming can yield greater total lifetime benefits if life expectancy is limited. Early claiming is risky for individuals with limited retirement savings because the lower monthly benefit may be insufficient. Median retirement savings for Americans 65 to 74 is reported at $200,000.
Read at 24/7 Wall St.
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