Dave Ramsey: 6 Retirement Statistics That Will Make You Think Twice About Saving for the Future
Written by
Ashley Donohoe
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Gary Dudak
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Whether your monthly bills leave little leftover cash or you’re focusing on other goals, you might find yourself among the many Americans who need to catch up on their retirement savings. If you’re still far away from retirement age, you may feel no pressure to contribute much yet. But these six retirement statistics that the financial guru Dave Ramsey shared on his blog could make you think twice.
1. 54% Don’t Know Their Retirement Needs
Ramsey explained that 54% of American workers didn’t even know their retirement savings needs. This makes planning how much to contribute regularly and tracking your progress very challenging.
Many factors play a role in your savings needs, including your retirement age, intended lifestyle, cost of living, inflation, income sources and healthcare costs. You can use an online calculator, such as this one from the AARP, or speak to a retirement advisor to find out.
2. The Average Yearly Social Security Benefit Is Less Than $22,000
If you expect to live off your monthly Social Security payments, you might be surprised that the average monthly payment was just $1,907 in January 2024. The Social Security Administration also mentioned the payments are made to only cover 40% of what you had earned while working.
Since this likely won’t cover your costs, having sufficient retirement savings is crucial for your financial security. Plus, don’t forget potential changes to Social Security that could negatively affect your benefit amount.
3. About 34% Haven’t Saved Anything
A 2023 report from Ramsey Solutions showed that 34% hadn’t saved any money at all. This not only includes money for retirement but also an emergency fund and savings for other goals. In addition to causing financial struggles during retirement, having no savings to handle today’s emergencies is dangerous and could lead to debt.
Regularly putting monthly income toward these purposes pays off and provides financial security. You might set some initial goals of putting aside at least three months of expenses toward emergencies and 15% of your earnings toward retirement.
4. Around 39% Don’t Invest in Stocks
Ramsey mentioned that 39% of Americans didn’t invest in stocks, which tend to have the best average returns among investments. Some investors might not feel comfortable with the higher volatility that comes with these investments and choose safer, less profitable options instead.
But to build your retirement savings faster, stocks are a good choice as long as you diversify and understand how they work. In another blog post, Ramsey suggested investing in them through mutual funds rather than individually to reduce your risk and benefit from the professional guidance.
5. A Majority — 69% — Think Their Retirement Savings Aren’t on Track
Whether or not they know their goal amount, around 69% of non-retirees don’t feel confident about their retirement savings being on track. This statistic that Ramsey highlighted was based on a 2023 Federal Reserve report that showed how retirement preparedness varied based on different demographic factors.
If you’re in this majority, consider re-examining your financial habits to improve your retirement savings progress. For example, you can set up automated retirement contributions, cut your current spending, pick wiser investments and seek extra income streams.
6. Approximately 40% Don’t Have Professional Advisors
Ramsey wrote, “Trying to save for retirement without professional help is like wandering into a haunted house alone in the dark without a flashlight.” The 40% of Americans without professional advisors are at a disadvantage with everything from figuring out retirement savings needs and investment options to getting help when their savings get off track.
If you’ve tried to plan for retirement by yourself, consider finding a financial planner or investment advisor to work with. Community organizations, financial institutions and even your employer might offer low-cost or free help if you worry about fees. Just verify the person’s credentials before choosing them.
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