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Should you claim early, as Dave Ramsey says?
Social Security Fears Go Viral: Should You Claim Early, As Dave Ramsey Says?
Americans are increasingly afraid that they will not receive the Social Security benefits they have contributed to throughout their careers.
According to the Associated Press, Social Security will not be able to pay all benefits to beneficiaries after 2035. At this rate, it will only be able to pay 83% of benefits unless the government makes some policy changes.
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The Social Security Administration (SSA) explains that taxes paid into Social Security go to people who are already retired, people with qualified disabilities, survivors of deceased workers, and dependents of beneficiaries. They don’t go into a personal account for taxpayers to receive in retirement.
Amid fears that taxpayers will not receive adequate Social Security funds, financial guru Dave Ramsey recommends that Americans Claim Social Security Benefits Early. In contrast, other financial experts recommend waiting as long as possible to get a higher monthly salary.
Ramsey says the best strategy for most Americans is to start claiming Social Security benefits at age 62. He believes this approach will allow individuals to access their money sooner, allowing them to invest it in mutual funds for potentially higher returns.
Ramsey says Americans can overcome lower monthly payments by investing early and increasing their investments.
He highlights that the Social Security system is fundamentally flawed and unreliable, describing it as a “broken system” and a “disaster”. Ramsey urges people not to rely on it as their primary source of retirement income.
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According to Ramsey, the uncertainty surrounding the future of Social Security makes it prudent to take your money as quickly as possible and make it work for you through smart investments.
Contrary to Ramsey’s advice, most financial experts recommend waiting until full retirement age – typically 66 or 67 – or even delaying until age 70.
Delaying benefits results in a significantly higher monthly payment – up to 132% of the monthly benefit if you wait until age 70, according to the SSA.
Financial planners argue that for those who are in good health and have a longer life expectancy, waiting can provide a more financially stable future. Bigger monthly paychecks from waiting can help cover increased healthcare costs and other expenses in retirement.
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Many people are worried about whether Social Security will be available when they retire. While the system faces challenges, SSA Chief Actuary Steve Goss assures Americans that despite the risk of reduced benefits, Social Security trust funds will not run out of money.
According to Ramsey’s guidance, fear of this program ending is reason enough to claim as early as possible to mitigate the risk of potential future reductions in Social Security payments.
So should you claim early?
Deciding when to claim Social Security is a personal decision, depending on several factors, including health, current financial situation and retirement goals.
Ramsey says those who have financial experience and are able to manage investments can benefit from claiming early. But it’s important to consider the advantages and disadvantages, such as lower monthly payments.
Financial experts recommend creating a comprehensive retirement plan that incorporates Social Security as one of several sources of income.
As Social Security faces uncertainty, retirees and other beneficiaries should carefully evaluate their options.
If Social Security trends continue as projected, should retirees follow Ramsey’s advice and claim benefits sooner? Or would it be better to wait until full retirement age to claim the largest possible portion of Social Security?
The answer is with you. When expert opinions vary drastically, it is important consult your financial advisor to determine the best approach for your specific circumstances.
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This article Social Security Fears Go Viral: Should You Claim Early, As Dave Ramsey Says? originally appeared in Benzinga.com
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