Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — 3 simple steps to fix it
With over 30 years of fielding listener calls and cultivating a devoted audience, Dave Ramsey has become one of the rare experts truly in tune with the nation’s financial heartbeat. His company’s surveys and reports deliver unique insights into how Americans earn, save, and spend their money.
The 2023 “Today’s Retirement Crisis” study based on a 2016 survey highlights a surprising statistic — 42% of Americans are not currently saving for the future. This is also reflected in the Fed’s 2022 Survey of Consumer Finances which shows that only 54.4% of families had retirement accounts.
“… even among savers, few are setting aside enough to afford a truly secure retirement. In fact, only one in 10 Americans save 15% or more of their income — the amount industry experts recommend individuals set aside in order to build adequate savings — for retirement,” said the Ramsey Solutions study.
This “alarming” information could indicate that many people are facing a dire retirement. “Instead of packing their bags for their dream vacations in their 60s and 70s, millions of Americans will be packing their lunch for another day at the office,” says the Ramsey team.
We can assume at some point many plan to rely on Social Security benefits alone. Typically, these benefits replace just 40% of pre-retirement income. Still nearly 60% of retired Americans say Social Security is a “major source” of their retirement income, according to Gallup. The estimated average monthly Social Security retirement benefit for Jan. 2025 was $1,976, which translates to an annual income of $23,712, much less than what a comfortable retirement would usually require.
The good news is that this fate is avoidable. Here are the three steps you can take to start stitching together a safety net for your senior years.
The first step for anyone looking to retire with a comfortable fund is to set a benchmark for minimum monthly savings. A portion of every paycheck must be set aside to secure your future.
As of January 2025, the U.S. personal savings rate was just 4.6%, according to the Federal Reserve. This is the ratio of personal saving to disposable personal income (DPI), and it is simply too low to fund a robust retirement. Ramsey recommends setting the benchmark significantly higher, at 15% of gross income. This is assuming you already have an emergency fund and you’re out of debt.
To highlight the difference, a person earning $100,000 a year who manages to save 15% of their income and invests it in an asset that delivers 10% returns annually could accumulate roughly $1.5 million within 25 years. This means they can retire as a millionaire even if they start saving and investing in their early-50s.