'Ramsey Show' Host Tells Retiree, 65, To 'Absolutely' Pull Social Security Instead Of Living Off His $220K 401(k) — But Not All Experts Would Agree

At 65 years old, Lloyd thought he was doing everything right. He was retired, his house was paid off, and he had $220,000 tucked away in his 401(k). But as the reality of daily expenses started chipping away at his nest egg, he called into "The Ramsey Show" with a simple question: should he start taking Social Security now and give his savings a break?

"I'm 65 years old, be 66 in four months. I'm retired and right now I'm living off of my 401(k), and I wonder would I be better off to go ahead and start drawing Social Security and let the 401(k) gain value," Lloyd told hosts Rachel Cruze and Jade Warshaw.

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That monthly benefit? Around $2,000. His bare‑bones expenses? "$1,600, $1,700 a month."

For Cruze, the answer was clear. "I would go ahead and pull it," she told him, referencing Social Security. "I would rather be using that money than absolutely pulling from my 401(k)."

Warshaw quickly backed her up—especially after hearing Lloyd was dipping into the principal, not just the gains. "If you're using the principal, then definitely what Rachel said."

That distinction matters. It's one thing to coast on market returns. It's another to drain the account that's supposed to last through your 70s and beyond.

"You've gotten to a point of what most people dream of, of having, you know, $220,000 in your 401(k), and you're retired and doing it," Cruze said.

Lloyd's setup wasn't perfect, but it was solid: "maybe $3,000 in credit card debt," and a fully paid‑off home. All of this positioned him to use Social Security the way many people hope to: as a buffer, not a lifeline.

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Cruze's dad—yes, that dad—Dave Ramsey, has been beating the same drum for years: if you're going to claim Social Security early, don't just cash the checks and coast. 

He's no fan of depending on government benefits, but if you do take them at 62, his stance is crystal clear—invest every single dollar. In his world, waiting until 70 doesn't make sense if you've got the discipline to turn that early money into something that actually grows. Otherwise, you're just letting it sit there while your savings shrink.

That strategy contrasts with the idea of simply delaying benefits to maximize monthly payouts. Claiming at 62 permanently locks in a lower monthly check than waiting to full retirement age or even age 70. But Ramsey's logic is that for some retirees with savings and discipline, turning those monthly checks into invested capital could lead to more overall money than waiting for larger, guaranteed government payments.

Not everyone agrees. Financial expert and author Suze Orman has taken a different view, saying that waiting for delayed retirement credits—especially up to age 70—can lead to significantly larger guaranteed monthly checks for life. This can be especially important if someone expects to live into their 80s or 90s and wants that reliable income stream without market risk.

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So what can retirees do when they don't want to wait until 70—and don't want to spend down their nest egg?

Here are a few practical options that don't require Wall Street wizardry:

• Start investing small amounts. Options like Arrived let retirees invest in real estate with as little as $100, giving them a shot at passive rental income without managing properties.
• Rent out part of your home. If you've got extra space—an unused bedroom, garage apartment, or even a large driveway—you can generate monthly income with minimal effort.
• Turn hobbies into side income. Woodworking, crafts, baking, pet sitting—small projects can add up, especially if you're already spending time doing what you enjoy.
• Explore local flexible gigs. Seasonal or part‑time work like tutoring, customer service, or delivery driving can add a few hundred dollars a month without a full‑time commitment.

For Lloyd, though, the message was simple: he's earned it. "Enjoy that," Cruze told him. "You worked hard for it."

With a paid‑off home, manageable debt, and a modest cushion, switching on Social Security now gave him exactly what he was looking for—a way to let the rest grow while getting guaranteed monthly income. Whether someone follows a strategy of early claiming and investing, or waits for delayed credits, the most important thing is understanding the trade‑offs and picking the path that fits their financial picture.

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