Most working Americans understand that monthly Social Security paychecks do not provide a sufficient amount of income to satisfy their desired lifestyle needs in retirement. They correctly respond to this awareness by finding other ways to save and invest for the future.
Scott Galloway, New York University professor and The Prof G podcast host, shares some provocative thoughts on Social Security and also offers a major warning about types of investments it can be best to avoid.
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In 2025, the average Social Security check is about $1,900, which is only about $23,000 annually. That is why the federal program is referred to as a safety net, not a complete replacement for income.
Related: Scott Galloway has startling words on Social Security, Medicare
People frequently begin planning for their post-employment years by calculating an annual retirement income that is approximately 70% to 80% of the money they earn while working.
Taking advantage of employer-sponsored 401(k)s and investments in tax-advantaged IRAs (Individual Retirement Accounts), over time they can see their retirement savings grow in value to the point where those accounts become the major source of their financial nest egg.
Galloway explains what he believes is a problem with Social Security and suggests an alternative way its funds could be distributed. He also sounds the alarm on one investment strategy that it is best to avoid.
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Scott Galloway explains why means-testing for Social Security is necessary
As someone who makes $16 million per year, Galloway does not think he should be eligible to collect Social Security when he retires. Rather, he supports means-testing as a tool to determine whether one qualifies for benefits.
The podcast host clarifies that he pays $9,000 in Social Security taxes every year. And he says that is the same amount someone who makes $160,000 annually pays.
Galloway believes that most people who collect Social Security take out two to three times the amount of money they contribute to it through the tax. People who are extremely well off, he suggests, do not necessarily deserve the money just because they have paid the tax during their working years.
"It's a tax," he has said. "People who need it are entitled to it. So I think you've got to means-test it."
Galloway then turns his attention to investments people make to add to their retirement savings and explains a mistake not to make.
Related: Tony Robbins warns U.S. workers on Social Security, retirement fact
Scott Galloway says risky investments can be financially devastating
In his 2024 book, The Algebra of Wealth, Galloway writes that a proper investment diversification strategy is a smartly defensive move.
"As in sports, defense wins championships," he noted.
When investing, an infinite upside to risk is easy to absorb for obvious reasons. But what happens when the risk has to be swallowed on the negative side?
"You can't come back from zero," Galloway wrote. "Risky investment assets — growth stocks, derivatives — can go to zero. If you're concentrated in one of those assets, a bed bet can devastate you."
That is why diversification of assets serves to limit the downside.
"Admittedly, it's also a drag on your upside, but if you go to zero on a single bet, you have no upside," Galloway explained. "More important, you don't need to maximize upside."
Galloway described the latter fact as a profound truth.
"Contrary to the message of popular media, the objective is not to be the richest person alive," he wrote. "A well-managed, diversified portfolio will generate the returns you need to achieve economic security."
The author does encourage people investing for retirement to use an appropriate share of their capital to go after big market wins.
"A safe and steadily growing asset base will give you the confidence to pursue greater opportunities with your more valuable asset — your time," he wrote.
