Mar 22, 2026
Financial guru Dave Ramsey has often advocated for taking Social Security as soon as possible.
“Social Security dies when you die,” he once told a caller on The Ramsey Show (1). “It's a negative rate of return. The money you put into Social Security you will never get all of it out… so you might as well get all you can get as fast as you can get.”
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By taking benefits early, Ramsey argues, you can maximize lifetime payouts and potentially invest the money to earn a higher rate of return than the program provides.
For anyone born after 1960, that means taking a roughly 30% cut to monthly benefits if they start collecting at the earliest eligibility age of 62 (2). However, some studies suggest that this could be the wrong move for many people.
Here’s why the math doesn’t necessarily agree with Ramsey’s argument.
The math is clear: patience is rewarded
The Social Security system is designed to reward delayed claims. Every additional month you wait after turning 62 increases your monthly payment slightly (2). By age 67, which is the full retirement age (FRA) for people born in 1960 or later, you can claim 100% of your scheduled benefit.
Delaying further also increases benefits through delayed retirement credits (3). For people born in 1943 or later, benefits rise by about 8% per year for each year you delay after FRA. That means waiting until age 70 can increase monthly benefits by about 24% compared with claiming at 67.
The dilemma for most retirees is whether the additional monthly payout offsets the months or years of foregone payments. Fortunately, researchers have analyzed the numbers to make this choice a little easier.
A 2023 study published by the National Bureau of Economic Research suggests that waiting until FRA (67 for most people) is usually the best option (4).
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“We find that virtually all American workers aged 45 to 62 should wait beyond age 65 to collect,” the report revealed. In fact, the research suggests that most people should wait beyond FRA to collect delayed retirement credits. “More than 90% should wait till age 70.”
The study also suggests that taking benefits early has a tangible cost for many households. For anyone between the ages of 45 and 62, the median loss in the present value of household lifetime discretionary spending is $182,370. That’s a sizable amount of money that could make or break many retirement plans.
It’s also worth noting that this is a median loss, which means many households could lose more than this sum.
Could some of this potential loss be offset by investing the benefits, as Ramsey recommends? That depends on your expected investment returns.
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Comparing investment performance
“If you don’t need that Social Security money, you can always invest it in good growth stock mutual funds and just let it grow,” according to Ramsey Solutions (5).
On paper, that may seem like a savvy approach. After all, a low-cost index fund that tracks the stock market has delivered strong returns historically.
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The Vanguard S&P 500 ETF (VOO), for instance, has delivered about 14.7% annualized return since its inception in 2010 (6). That’s significantly higher than the roughly 8% annual increase in benefits from Social Security’s delayed retirement credits.
However, this isn’t a fair comparison. Index funds and equity mutual funds involve market risk, whereas Social Security benefit increases are predetermined by law.
The stock market is volatile, and past returns don’t guarantee future performance. Just because it has delivered healthy double-digit returns in recent years doesn’t mean it will deliver the same return in the five-year period between age 62 and FRA.
By comparison, the Social Security Administration’s delayed credits are effectively guaranteed under current law, which arguably makes the roughly 8% annual increase more attractive on a risk-adjusted basis.
Bottom line: the timing of your claim is critically important. You may prefer to take benefits early for personal or financial reasons, but research generally finds that delaying benefits increases lifetime value for many retirees.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
YouTube (1); Social Security Administration (SSA) (2), (3); National Bureau of Economic Research (NBER) (4); Ramsey Solutions (5); Vanguard (6)
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Vishesh Raisinghani is a financial journalist covering personal finance, investing and the global economy. He's also the founder of Sharpe Ascension Inc., a content marketing agency focused on investment firms. His work has appeared in Moneywise, Yahoo Finance!, Motley Fool, Seeking Alpha, Mergers & Acquisitions Magazine and Piggybank.
