"When Ramsey was asked a question about when to claim Social Security, he replied, "it usually makes sense to take it early if you're going to ... invest every bit of it." This occurred in a podcast in 2019, and Ramsey explained that he would recommend this approach because he believes that investing the money could help you end up with more wealth in the long run than if you simply waited to claim Social Security benefits and let the benefit grow that way."
"It ignores human nature: Most people are not going to invest every dollar of their Social Security if they take it at 62. For one thing, a lot of people couldn't afford to retire and do that since they'd need their Social Security. Most people also aren't that disciplined. If you are not investing every dollar of extra income you have available to you now, there's no reason to think you'd be more likely to do that with retirement checks."
One strategy is to claim Social Security at 62 and invest the benefits rather than waiting to claim later. That strategy assumes the retiree will invest every dollar of the benefits. Many people cannot or will not invest all benefits because they need the payments to cover expenses and because they lack the discipline to invest extra income. Claiming at 62 and stopping work may leave insufficient income to pay bills. Claiming at 62 while continuing to work risks exceeding earnings limits and forfeiting benefits. The strategy therefore is impractical for many, ignores human behavior, and can leave retirees with less lifetime income.
Read at 24/7 Wall St.
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