Retirement Reality Check: Why Relying on Social Security Might Not Be Enough

Over 4 million Americans are turning 65 each year from 2024 to 2027. That's over 11,000 people daily reaching retirement age. With this surge, many are wondering how to make their money last.

Financial Expert Dave Ramsey's Advice

Don't count too much on Social Security.

• In 2026, the average monthly benefit is expected to be $2,071.
• 12% of men and 15% of women over 65 rely on Social Security for 90% or more of their income.
• These payments were never meant to cover all expenses.

The Alternative: 401(k) Plans

Ramsey suggests taking full advantage of 401(k) plans, especially if your employer offers one.

Types of 401(k)s

• Traditional 401(k)s: Use pre-tax dollars, meaning you pay taxes later.
• Roth 401(k)s: Use after-tax money, so withdrawals in retirement are tax-free.
• Many employers match contributions, which is like getting free money.

Contribution Limits

• In 2026, you can contribute up to $24,500 to a 401(k).
• If you're 50 or older, you can contribute even more.
• Remember, you usually can't withdraw money without penalties until you're 59 and a half.

Individual Retirement Accounts (IRAs)

Another option is an Individual Retirement Account (IRA).

• IRAs offer tax benefits and more control over investments.
• You can roll over old 401(k)s into an IRA.
• Roth IRAs: Offer tax-free growth and withdrawals.
• Traditional IRAs: Let you deduct contributions now but tax them later.

Ramsey's Final Advice

Don't rely solely on Social Security. Take control of your retirement savings with 401(k)s and IRAs.