Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here’s what it is and 3 simple steps to fix it ASAP

1. Create a saving benchmark

The first step for anyone looking to retire with a comfortable fund is to set a benchmark for minimum monthly savings. A portion of every paycheck must be set aside to secure your future.

As of January 2025, the U.S. personal savings rate was just 4.6%, according to the Federal Reserve. This is the ratio of personal saving to disposable personal income (DPI), and it is simply too low to fund a robust retirement. Ramsey recommends setting the benchmark significantly higher, at 15% of gross income. This is assuming you already have an emergency fund and you're out of debt.

To highlight the difference, a person earning $100,000 a year who manages to save 15% of their income and invests it in an asset that delivers 10% returns annually could accumulate roughly $1.5 million within 25 years. This means they can retire as a millionaire even if they start saving and investing in their early-50s.

Scammers are smarter than ever—are you protected?

The average American gets 2 scam calls and 3 scam texts every week. Think you can spot them? AI is making scams harder to detect, and in 2023 alone, Americans lost $12.5B to cybercrime. Don’t be next—learn how to protect yourself now!

Learn more

2. Max out tax-advantaged accounts

Reducing your tax liability could be just as important as maxing out your savings rate. Every penny saved in taxes is another penny that can be used to invest and compound your wealth over time.

For most people, the best way to mitigate taxes is to utilize the tax-advantaged accounts like 401(k) and Roth IRA available to them. Unfortunately, most Americans neglect these accounts. In 2023, the average defined contribution plan balance was just $134,128 while the median balance was just $35,286, according to Vanguard. Even those ages 65 and over had an average balance of just $272,588 and a median balance of $88,488.

None of these balances are close enough to fund a proper retirement. By raising your contributions and maxing out these accounts diligently, you can get ahead of your peers relatively quickly.

3. Go beyond the bare minimum

Saving 15% of your gross income and maximizing your tax-advantaged accounts are the bare minimum necessities for a comfortable retirement, according to Ramsey. However, if you’re looking to retire sooner, desire a better lifestyle in retirement or simply waited too long to get started you may need to go beyond this minimum threshold.

Consider adding sources of passive income, such as rental property, to augment your annual earnings. Invest in taxable accounts to maximize your growth beyond the 401(k) and Roth IRA. Negotiate or look for a career change to boost your salary.

Regardless of your current financial situation, there’s usually a few ways to make improvements and boost your chances of a successful retirement.