{"id":195756,"date":"2025-04-21T02:16:44","date_gmt":"2025-04-21T02:16:44","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/finance\/dave-ramsey-has-blunt-words-on-social-security-401ks\/"},"modified":"2025-04-21T02:16:44","modified_gmt":"2025-04-21T02:16:44","slug":"dave-ramsey-has-blunt-words-on-social-security-401ks","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=195756","title":{"rendered":"Dave Ramsey has blunt words on Social Security, 401(k)s"},"content":{"rendered":"


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As American workers approach retirement, many naturally worry about how Social Security monthly paychecks will support them financially in maintaining their desired lifestyle post-career.<\/p>\n

Dave Ramsey, bestselling author and radio host, warns retirees about an important financial reality they will encounter when they begin receiving their Social Security benefits and withdrawing money from their 401(k) and IRA (Individual Retirement Account) savings.<\/p>\n

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Established in 1935, Social Security was designed to offer financial assistance to retired workers, individuals with disabilities, surviving family members of deceased workers, and dependents of beneficiaries.\u00a0<\/p>\n

In 2023 (the most recent year for which these figures are available), approximately 180 million workers contributed to Social Security through taxes, while roughly 67 million Americans received benefits, according to the Social Security Administration (SSA).<\/p>\n

Related: Scott Galloway sends strong message on Social Security<\/a><\/strong><\/p>\n

Social Security monthly paychecks are not intended to serve as a primary income source in retirement \u2014 rather, they function as a supplemental aid, covering only a fraction of what retirees may need to sustain their lifestyles.<\/p>\n

In 2025, the average monthly Social Security paycheck was about $1,980, which works out to an annual total of $23,760. That is up only slightly from a monthly average of $1,907 ($22,900 yearly) in 2024.<\/p>\n

That is little more than the 2025 U.S. poverty threshold of $21,150 for a two-person household.<\/p>\n

\nAnd it’s important to note that without government intervention, the Social Security trust fund reserves are projected to be depleted by 2035, which could lead to reduced payments for future retirees.<\/p>\n

Ramsey issued a blunt warning for Americans about Social Security and a word of advice on retirement savings tools such as 401(k)s and IRAs.<\/p>\n

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Dave Ramsey speaks with TheStreet about personal finance issues. The bestselling author and radio host encourages Americans to rely less on Social Security and more on 401(k)s and IRAs for retirement income.<\/p>\n

TheStreet<\/p>\n<\/figcaption><\/figure>\n

Dave Ramsey bluntly explains a major Social Security financial fact<\/h2>\n

Because retirees should not rely solely on Social Security for retirement income, it’s important to understand and invest smartly in employer-sponsored 401(k) plans and tax-advantaged IRAs during one’s working years.<\/p>\n

Ramsey cites an SSA report<\/a> that found, without Social Security, four out of 10 Americans 65 years of age or older would live below the poverty line. It plays an important role, but more is needed.<\/p>\n

“Listen, if your plan is to depend on the government to help you retire with dignity, then you need a new plan,” Ramsey wrote<\/a>.<\/p>\n

More on retirement:<\/strong><\/p>\n