Ramit Sethi Challenges The Retirement Advice Most Americans Follow

It’s the advice you hear passed around like a family recipe: Work hard, save consistently, and one day you’ll retire comfortably. But what if this so-called tried-and-true advice is far from a recipe for success and more like a blueprint for disappointment?

Ramit Sethi, bestselling author of I Will Teach You to be Rich and Money For Couples, didn’t hold back as he reflected on what he considers the worst financial advice he has ever received.

“Get a job at an industrial company and work there for 40 years so that I can retire with $1M in the bank,” he told Moneywise. “I was like $1 million? That’s it? No, thank you!”

The old axiom about saving $1 million for retirement hasn’t changed much.

Today, many Americans think they’ll need $1.46 million to retire comfortably, according to a Mutual Life study. But Sethi rejects any such advice.

Sethi says the issue isn’t just oversimplified math but the mindset it fosters: grinding away for decades only to scrape by on a fixed budget in retirement.

For one thing, he argues that by focusing solely on saving and not spending money meaningfully, people miss out on living a rich life. He thinks it’s too long to wait till retirement, especially when the average age of retirement is creeping up, standing at 61, up from 57 in the 1990s, according to a 2022 Gallup poll.

When many Americans finally do retire, their visions of their golden years — leisure, frequent travel, and freedom from the constraints of a 9-to-5 — clash with financial reality. According to the Federal Reserve, households headed by those aged 45-54 have an average retirement account balance of $313,000, far from what’s needed for a secure and fulfilling retirement.

This disconnect is why Sethi encourages people to rethink their financial approach, shifting the focus from reaching milestones to developing a strategy that builds wealth over time.

Read more: Rich, young Americans are ditching the stormy stock market — here are the alternative assets they’re banking on instead

While a $1-million retirement goal might seem out of reach, there are steps you can take to build a stronger financial future. One approach Sethi encourages is harnessing the power of compound interest