David Ramsey’s warning to Social Security beneficiaries: “If your plan is to depend on the government, you need a new plan”
David Ramsey, a radio host and financial advisor, warned against trusting Social Security, which helps keep millions of seniors out of poverty.
Professional investor and radio personality David Ramsey offers financial advice to his followers, and this week he focused on retirement. The financial advisor is a strong advocate of private retirement accounts, such as a 401(k).
While Social Security remains the primary income source for retirees in the United States, private savings accounts have gained popularity since their introduction in the late 20th century, largely replacing employer-provided pensions.
Access to retirement benefit programs is higher among workers with higher incomes
Although some view employer-contributed funds as a benefit, a significant number do not. Additionally, a subset of the labor force might have access to an account of this type but not have enough savings to use it as a viable retirement vehicle.
According to the Bureau of Labor Statistics, 28 percent of private sector workers are not offered a pension or a private retirement account, and only a little over half take advantage of the benefit. Among the 25 percent of lowest-paid workers in the US economy, less than a third participate in the retirement benefit program they are offered. Meanwhile, 84 percent of the workers at the other end of the income spectrum take advantage of these benefits.
In March 2023, 70% of workers in private industry had access to a retirement plan and 53% were participating in a retirement plan. Sixty-seven percent had access to a defined contribution plan and 15% had access to a defined benefit plan. pic.twitter.com/nLh1WEMWKY
— BLS-Labor Statistics (@BLS_gov) March 15, 2024
During his program, the radio host warned his listeners not to depend solely on Social Security, citing that the average monthly payment to retired workers is less than $2,000. “If your plan is to depend on the government, you need a new plan,” said the host.
Ramsey also pointed to the program’s insolvency, a common talking point on the right among those not seeking to fill gaps or bolster benefits distributed to workers who contribute to the program throughout their careers. An alternative view, presented by lawmakers like Vermont Senator Bernie Sanders, would be to remove the cap on income that prevents taxation on earnings above $176,100.
Wrong, Elon. Social Security has paid every benefit owed to every eligible American for 86 years. We can make it solvent for the next 75 years and expand benefits by scrapping the cap that allows billionaires like you to pay the same amount into Social Security as a truck driver. https://t.co/kgjKOM4I3N
— Bernie Sanders (@BernieSanders) March 1, 2025
Even callers and listeners who may find Ramsey’s advice appealing might struggle to apply it to their own finances. Ramsey does not look fondly on callers who complain that factors outside of their control are inhibiting their ability to get rich. This week, he lambasted a caller who pointed to structural inequalities within the economy that make it hard to get ahead, with Ramsey saying that getting rich is simple; it just requires hard work, cutting back on spending, and investing wisely. Ramsey’s argument that it has never been easier to get rich allows him to operate under the assumption that a person’s poor financial situation is a result of their actions alone, and raises questions about the type of social safety net that should exist, even if this is the case.
The stock market leaves millions of workers and retirees on edge
That safety net and the desire to see one constructed come into focus when the stock market takes a downturn.
Ramsey’s comments come as the stock market has dipped following the announcement from President Donald Trump that he would be imposing tariffs on some of the country’s largest trading partners. Although markets have regained some of the value lost in the days following ‘liberation day,’ high levels of economic uncertainty are decreasing growth forecasts across sectors and industries. Slower growth could mean smaller returns, and if severe enough, could lead to an increase in unemployment, which would make saving for retirement even more difficult, at least in the short term.
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Many workers and retirees tried not to dwell on the decrease in the value of their 401(k). Ramsey’s advice centered on buying more stocks while prices are lower and trusting that the market will rise again, allowing any losses to be recouped. While private retirement accounts may work for some, others view the market’s volatility with concern, fearing that their ability to retire is far beyond their control.
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