Outspoken financial advisor and author Dave Ramsey has never minced words on Social Security – he’s called it a “stupid thing” and a “mathematical disaster.” Although most financial commentators urge some prudence when figuring out how to collect Social Security benefits, Ramsey’s wide knowledge of personal finance promotes a somewhat unconventional view about when Americans should start doing so.

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As he explained in a podcast back in 2019, Taking Social Security at age 62 isn’t a wrong move – if you know what to do with that money. “It almost always makes sense to take it early if you’re gonna invest every bit of it,” said a confident Ramsey. His radical approach contradicts much of the conventional advice, which generally encourages delaying benefits to maximize the monthly payout. 

Ramsey’s argument depends on the investment gains from those early payments. “That one account will make you more than enough to cover up the difference between your [age] 66 account and your [age] 62 account,” he said. Using that logic, anyone starting to collect Social Security at 62 could see a better financial outcome by investing their checks in a high-performing mutual fund.

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But here’s the catch: identifying “good mutual funds” may be a little overwhelming for someone who knows nothing about investing in the market. Finding a fund that consistently outperforms the market is easier said than done, especially for those lacking financial expertise or the means to hire a professional.

Research shows that waiting to claim Social Security can be highly rewarding regarding lifetime payout. According to a study by the Federal Reserve Bank of Atlanta and Boston University, the total lifetime benefits can be over $182,000 if the benefits are claimed at age 70. On the other hand, claiming benefits at 62 means a 30% permanent reduction from what one would have received on full retirement – at 66 or 67, depending on the year of birth.

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Critics of Ramsey’s advice point out the risks involved. Social Security isn’t an investment opportunity for many retirees but part of their income. They need checks to keep them going and cover daily expenses, and they can’t afford to put their money into something in expectation of more significant returns years later. Mutual funds may provide solid returns, but they’re also risky. Moreover, past performance doesn’t guarantee future results.

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Though Ramsey makes a fascinating argument, the daily financial realities millions of Social Security recipients experience aren’t accounted for. The average investor may struggle to match the returns Ramsey envisions, particularly in an unpredictable market. Moreover, those who use Social Security to pay their bills may not find the option to invest their benefits very practical.

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