Additional Coverage:
- Finance expert Dave Ramsey has a warning for Americans who rely on Social Security (marketrealist.com)
Financial Guru Dave Ramsey Sounds Alarm on Social Security Reliance
[City, State] – Millions of Americans depend on Social Security benefits for their golden years, but a prominent financial expert is urging caution, suggesting that relying solely on these payments could be a recipe for disaster. Bestselling author and personal finance guru Dave Ramsey has issued a stark warning to those whose retirement plans hinge entirely on Social Security, amidst ongoing discussions about the program’s future.
Ramsey’s recent comments align with AARP’s clarifications regarding the stability of the federal retirement program. He highlighted the mounting funding pressures and policy uncertainties that, in his view, render Social Security an unreliable cornerstone for retirement income.
Social Security, designed as a vital safety net, offers partial income replacement against risks like old age, unemployment, and disability. While it serves as a critical support system for countless individuals and families, Ramsey is now warning that the long-term solvency of its trust funds is in jeopardy. Current projections, he notes, indicate that these funds could be depleted as early as 2034-2035.
In a recent blog post, Ramsey acknowledged the significant risk of the Social Security trust fund running dry without Congressional intervention. Should this occur, he explained, the program would be unable to provide full retirement benefits once the funds are exhausted.
At that point, revenue from payroll taxes would only be sufficient to cover approximately 80% of promised benefits. Ramsey further elaborated that the insolvency date has been accelerated, potentially due to a confluence of rising benefit expenditures, policy shifts, and demographic changes.
“What’s the bottom line here? We can’t depend on Washington to take care of us in retirement,” Ramsey emphatically stated in his blog.
“Do you really want to put your retirement dreams in the hands of the government? Heck no!”
The program also includes an earnings limit for individuals who begin collecting benefits before reaching their full retirement age, which is officially 67 for those born in 1960 or later. This earnings limit is annually adjusted to reflect changes in average wages, as reported by The Street, citing AARP.
For example, in 2026, individuals who have not yet reached full retirement age will see a $1 deduction from their benefits for every $2 earned above $24,480. This marks an increase from the $23,400 limit in 2025, reflecting average wage adjustments.
Consequently, an individual earning $40,000 would face a $7,760 deduction in benefits.
However, Ramsey clarified that these withheld benefits are not lost permanently. “Those withheld benefits will be returned to you once you reach full retirement age.
At that point, Social Security will re-run your numbers and increase your monthly benefit to make up for the earlier reduction,” he wrote. Furthermore, income from other government or military retirement benefits, interest, pensions, investment earnings, or capital gains does not count towards this threshold.
Despite these provisions, Ramsey maintains that Social Security should not be considered the sole, or even primary, source of retirement income. “Any money you get from Social Security should be considered icing on the cake.
But making Social Security the main ingredient of your retirement plan? That’s a recipe for disaster,” Ramsey concluded, strongly advocating for Americans to actively save and invest for their own retirement.