Following Dave Ramsey's Social Security Advice Could Put Your Retirement at Risk

"Dave Ramsey has made a name for himself by giving out financial advice. And a lot of it is pretty spot-on. Ramsey is a firm believer in attaining financial security. To that end, he advocates maintaining an emergency fund at all times and saving money for retirement. He also strongly urges consumers to do what they can to avoid debt, and to prioritize paying off whatever debt they've already racked up."

"When it comes to claiming Social Security, you have choices. The earliest age you can take benefits is 62. But you won't get your benefits without a reduction until you reach full retirement age (FRA), which is 67 if you were born in 1960 or later. You can also delay your Social Security claim beyond FRA. For each year you do, until you reach the age of 70, your benefits get a permanent 8% boost."

Dave Ramsey recommends claiming Social Security at 62 to maximize the number of benefit checks received and to allow earlier investment of those payments. He reasons that investing those payments, particularly in the stock market, can offset the permanent reduction in monthly benefits that comes with early claiming. Social Security reduces benefits for claims taken before full retirement age and provides an 8% annual increase for each year delayed up to age 70. Early claiming yields smaller monthly income and can threaten retirement security for people without adequate savings or guaranteed returns.

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