Dave Ramsey's Blunt Warning About 401(k)s That People in Their 60s Don't Want to Hear

If you're nearing retirement, Dave Ramsey has a message for you. Ramsey is a well-known financial expert, author of several New York Times bestselling books, and the founder of Ramsey Solutions. He is known for his no-nonsense, tough-love approach to personal finance, and he has helped millions of people become debt-free.

Ramsey has given advice on retirement planning for decades. Here is what he wants people to know about retirement, including those in their 60s who are ready to leave the workforce soon.

Ramsey says a 401(k) is not enough on its own

Ramsey warns workers that only having a 401(k) is not enough. Many people in their 60s are resistant to hearing this because they've established a 401(k) plan throughout their careers. However, these workers may have a noticeable gap if they don't take advantage of other options.

For example, Ramsey recommends opening a Roth IRA in addition to a 401(k) for the tax benefits in retirement. Additionally, he recommends that people have a clear withdrawal strategy and take the time to understand their 401(k) fees before retiring.

Why people in their 60s shouldn't rely only on Social Security

Additionally, Ramsey says that those who don't have much saved in their 401(k)s should not rely solely on Social Security. Social Security's average monthly benefit is currently around $2,071. That amount, unfortunately, is barely above the poverty line for a two-person household.

On top of that, for those who want to retire in six to seven years, it's important to know that the OASI Trust Fund projects it can cover only 78% of Social Security benefits starting at the end of 2032, unless the government passes policy changes to improve this outcome.

Ramsey recommends becoming debt-free before investing

One of Ramsey's more controversial teachings is that people should become debt-free before investing in their 401(k)s. He teaches something called the snowball method, which encourages people to pay off debt starting with the smallest balance and working up to the largest.

Only once consumer debt has been paid off does he recommend contributing to a 401(k). While that may be challenging for people, especially those who want to retire soon, Ramsey says having fewer monthly expenses can help them allocate more toward retirement.

The new catch-up contribution rules for workers in their 60s

If you feel like you're behind on your 401(k) contributions and you are between the ages of 60 and 63, there is good news. 

Thanks to the SECURE 2.0 Act, people ages 60 to 63 can make super catch-up contributions. As of 2026, they can contribute an extra $11,250 to their 401(k)s on top of the typical 401(k) maximum contributions. Workers over 50 can contribute an extra $8,000.

Ramsey also recommends investing in a Roth account

Although Ramsey provides a lot of advice about 401(k)s, he actually prefers Roth IRAs. The reason is that Roth 401(k)s and Roth IRAs are taxed now, but once you're in retirement, you can withdraw the money tax-free as long as you meet certain qualifications. 

In addition to investing in Roth IRAs, Ramsey also recommends diversifying investments across growth, income, and international fund categories.

Tips for transitioning into your retirement years

If you are in your 60s, here are some tips for transitioning into retirement. For many people, this change is exciting, but it can also be a challenge because you're going from a salaried income to a fixed income. 

Many people often live on less in retirement than they did during their working years. A good way to prepare is to practice living on your retirement income for a few years prior to actually leaving work.

Additionally, Dave Ramsey recommends that people maintain an emergency fund to cover life's unexpected expenses. Having an emergency fund can prevent you from withdrawing too much from your 401(k) during your retirement years.

Why people appreciate Ramsey's direct approach

Although Ramsey's approach has many critics, he also has a significant number of supporters who credit his seven baby steps system with helping them get out of debt and achieve financial freedom. 

After all, when times are uncertain and prices are rising, many people appreciate having clear guidelines on how to become more financially secure.

Bottom line

Ultimately, Ramsey's goal for his listeners is a stress-free retirement one day. 

To do that, he says people need to become debt-free, contribute to a 401(k) consistently, and start investing in other accounts, such as a Roth IRA, to create multiple income streams in retirement.

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