Social Security retirement mistake: Dave Ramsey says 50% of Americans make this big Social Security blunder — how to fix it

According to Ramsey’s 2023 “Retirement Crisis Today” study, 42% of Americans are not saving anything for the future, putting them at high risk in old age, Moneywise reports. About 54.4% of U.S. families have a separate retirement account to supplement their Social Security, according to Federal Reserve data. Even those who have an account do not necessarily save according to inflation and the increasing cost of living.

Americans don’t save enough

“Even among savers, few actually set aside enough money for a secure retirement. In fact, only 1 in 10 Americans save 15% or more of their income,” according to a Ramsey Solutions study. Because of poor savings habits, many Americans may face a difficult retirement rather than a comfortable one. “Rather than packing for their dream vacation in their 60s and 70s, millions of Americans will be packing lunch at the office for another day,” Ramsey’s team wrote in March 2025.
Many retirees already rely heavily on Social Security, and nearly 60% say it is an important source of their retirement income. According to Moneywise, social security was always intended to be an additional source of income for seniors and accounted for only 40 percent of total income. The average Social Security retirement benefit through August 2025 was $2,008; This worked out to just over $24,000 a year. This amount is far less than what is needed to survive in a US city.

Fear about the future of Social Security

Moreover, confidence in the future of Social Security is waning; 59% of non-retired Americans worry the program may not exist when they retire. Ramsey says relying on Social Security while failing to build personal savings is the main mistake harming nearly half of Americans today. To fix this, Ramsey says people should first set a clear savings goal rather than saving haphazardly or “whatever is left.” As of August 2025, the U.S. personal savings rate was only 4%, too low to fund a strong retirement.

Ramsey recommends saving 15% of your gross income each year, as long as you have an emergency fund and are debt-free. He says this level of savings gives people the chance to retire with dignity and freedom. For example, as Moneywise notes, someone who earns $100,000 a year, saves 15%, and earns a 10% annual return could earn about $1.5 million in 25 years. Ramsey also emphasizes the importance of using tax-advantaged retirement accounts because taxes can slow wealth growth. Accounts like 401(k)s and Roth IRAs allow savings to grow faster by reducing or deferring taxes.

Going beyond basic retirement savings

Yet nearly 40% of Americans still don’t have any retirement savings accounts. Even for those who invest, balances are often very low; the average retirement account balance is just $38,176 at the end of 2024. Experts estimate that the average American needs about $1.26 million to retire comfortably, showing just how wide the gap really is. Ramsey says saving 15 percent and using retirement accounts is just the bare minimum for a secure future. People who start late, want to retire early, or want a better lifestyle in retirement need to go beyond the basics. One way to do this is to create extra income streams, such as making money from real estate or other passive investments. Ramsey also says that increasing income through raises, better jobs or career moves can make a big difference over time, according to the Moneywise report. He believes most people can improve their retirement outlook by making small but consistent changes now. The main message is clear: Social Security should be a backup, not a plan, and Americans must take action themselves to avoid hardship in retirement.

FAQ

Q1. Why does Dave Ramsey say Social Security isn’t enough for retirement?

Because Social Security covers only a portion of income and does not cover the entire cost of living in retirement.

Q2. What does Dave Ramsey say is the best way to avoid retirement boredom?

He says people should save regularly, aim for 15 percent of their income, and not rely solely on Social Security.