The Ramsey Show - App - Becoming Debt-Free as Newlyweds (Hour 1)

Episode Date: August 30, 2018

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Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. That's 888-825-5225. Kim is with us in Iowa City, Iowa. Hi, Kim. Welcome to the Dave Ramsey Show.

Hi, Dave. Hey. I have a question today about farm transition. So how do you transition a family business, specifically a farm, and have it not be a partnership with my in-laws? Okay, so you're running it with them, and then they're going to give you ownership? Yes. Right now, we don't have any ownership in it. We're just working with them, helping them out on the farm and eventually someday my husband

and i would like to take it over and own it okay all right and they're going to hand you the keys hopefully that's the goal um but i know that they've had they've gotten it from their parents and i don't know a lot that goes along with that but how do we work now knowing that we want to get some equity or some sweat equity things like that without having to basically either a buy them out completely because that's a lot of money or b have it be a partnership where i know you don't usually support those yeah in a family it's a little bit different uh it's it's two old boys sitting and having a beer that decide they go in the heat and air business.

That's where you get trouble. But a family partnership is a fairly normal thing. Are they planning on giving this to you at the end, or you're going to have to buy it from them at the end? Things we've talked about now is that the thing that they've done with their parents was they would keep all of the land, and we would buy the business portion and then just rent the land from them. So that could be their income in retirement. And then once they were to pass away, then it would be willed to us.

But some creative things that way. We're going to work together for a long time until they're unable to. Gotcha. Okay. Well, I mean, my kids work on my team here, and they're not in charge. I am. Yep. But someday they will own this place and run this place.

That's the plan right now anyway. And it looks like it's going that way. So in our case, what we're going to do is we're going to just transfer the ownership to them. They're not going to buy it. Obviously, I don't believe in debt, and I don't want them being in debt to me. That would be kind of weird, like inconsistent from my whole life's work. But in Ural's case know they can begin to transfer this stuff and actually the tax law the estate tax law what's this farm worth oh i don't know off the top of my head i would have to look at the books but um it's 120 acres and then it's actually

a pick your own berry farm so there's some value in that as well. As long as it's under $20 million, which it is, they can transfer the whole thing now in terms of ownership to avoid estate taxes of any kind if they want to. There's a way to do that called the Unified Estate Tax Credit. And the question is then how they're going to eat you know during that time i'll give you an example okay in our case we've transferred 99 of the ownership of this company to our children already i only own one percent but i own the only voting stock so so i still have complete control okay and in a very real practical sense, I'm still the owner. But that's all for estate planning to get it out of my name before I die

so the government doesn't tax us into oblivion. That's why we did that. So you can sit down with an estate planner and structure all kinds of different ways. I'm a little nervous about them leaving you the land in the will. I'd like for you to get ownership of it somehow before that without being in debt to them. But, you know, there's some different structures and things. I think the thing you've got to do is you've got to just sit down and decide at what point. Right now, you're an employee.

Correct. You're not going to be a partner. Shut up. And I don't think they need to be transferring equity to you necessarily now, or at least control to you at this stage. But what you want to do is you want to lay out a game plan of where we want to end up, and then what are some incremental steps we can take in the middle to end up there, and how can we take advantage of some of the estate tax laws that are in place today

that might not be in place later. We have some of the best, most liberal ways to pass, most generous ways, liberal is probably not the proper term, generous ways to pass estates right now that we've had in decades under the Trump law, the tax law that just passed. And so you really want to look at it now and there may be some some strategies to get it out of their name but still give them control like we did here as an example so you what you need to sit down and determine where you're going and then what are some steps some interim steps to get you there that give them the income they want but also protect you from the brothers and sisters coming in

fighting about the land later or something after it was promised to you or whatever. So a straight will makes me a little nervous. They can move it into a trust, and the trust has terms that dictate all of these things, but as long as you follow them, then it's set. That's a little more secure than a will in a situation like this. So you need to spend some money and some time on an estate plan. They do. And you guys need to do some planning as to where you want this to end up at the end game

and what are some things we can do along the way. At the 10-year mark, here's what we're going to do. At the 20-year mark, here's what we're going to do. At the date that you reach this age, you're going to step aside and we're going to step in, or whatever it is. But you need to lay it all out ahead of time rather than have this vague thing of, I'm going to give it to you when I die. That's just probably not something I want to work my whole life towards.

I need a little more than I'm going to give it to you when I die. That one doesn't work for me. And so it sounds like you all are talking about it and that's very wise and very sophisticated but it's a big deal folks all of you need a will all of you need a will if you're 18 years old or older you need a will and the will needs to be drafted to fit the laws of the state you currently reside in. So if you've moved since you've done a will, if you've gotten married since you've done a will, if you've divorced since you've gotten a will, if you've had kids since you've gotten a will,

if some of your kids went crazy since you've gotten a will, whatever. If there's any life changes, you need to update what you had or redo what you had. State-specific. It costs too much heartache, and it costs too much money, even if you don't have any assets, dictating who's going to take care of the kids. You want your mama and her mama fighting over who's going to take care of the kids if both of you two die on your little flying episode. You're going to go fly somewhere for the weekend and you both die and there's no dictation on the kids. The state's going to decide with the two parents fighting over it. No, you

need a will. You need a will. I'm not die. You're going to die. And the will does not increase the probability of that. You need a will does not increase the probability of that. You need a will. This is the Dave Ramsey Show. One question I get asked all the time is, do I need life insurance? Listen, the whole point of life insurance is to replace your income for someone who counts on you. So if you have a spouse or you have kids, yes, you need term life insurance. It's the only way to protect them until you're out of debt and have built up your wealth. You're only digging a deeper hole if you waste money on cash value plans since it robs you of the ability to make real progress.

And that's why I send you to Zander Insurance, and I have for 20 years. That's where I get all my insurance, and they only offer the plans I recommend. Zander Insurance this taken care of. I can give you the advice and I can tell you where to go, but it's really up to you to take that important step to get your family protected. That's zander.com or 800-356-4282. Ben is with us in Orlando. Welcome to the Dave Ramsey Show. Ben, what's up? How you doing, Dave? Better than I deserve. How can I help? Good.

All right. I have a question on collections debts. I have about $16,000 in there with 13 different creditors. Do I leave those continually way off for another year or two while I continue to work through Baby Step 2? Any of them bothering you? They call me all the time, but I always tell them, listen, I don't have money for you.

There's nothing I can do. As soon as I get some, I'll call you and get you paid. And you're not paying on any of them? No. I only pay on my current debts. What's it from? All credit cards. How old are they? How long since they've been paid on? Just about a year. Okay. Any of them over $5,000? No. Okay. Any of them over $5,000? No.

Okay. So you said 13 equals $15,000. Is that what you told me? 13 different cars, and they roughly are about $16,000 with the last known dollar amounts that I have on all the paperwork I have in my files. How much other debt do you have that's active? With my student loans, cars, it's just at 50. And what's your household income? 80. So how quick are we going to pay 50? Right now, the way my budget runs, I have $1,260 left over every month. That was going to be my other question I just thought of. The only ways I can get some more money is if I cancel cell phones, cancel cables and things of that nature

and cancel contracts. Is that something I should do or shouldn't do in order to get that extra money? What kind of contract? Granted, I'll have to pay like Dish Network has. I'm in a two-year contract, so if I cancel, I'll have to pay X amount of dollars per month left of the contract. Cell phones, they're not under contract, but the way the phones are today, because, you know, we're so smart on them. Here's the thing. Here's the thing. You're just starting this process, all right? But if you make 80, you need to find a way to pay at least $25 a year

and be done with the active debt in two years. Okay. Most people do more than that. No, $25 a year is a lot more than you're talking about. $25 a year is not $1,200 a month. It's $2,000 a month. At the start it is, yeah. It's $2,000 a month.

Yeah, I can pull another $800 after the first maybe six months of getting some other debts paid off and some things will disappear from the minimum payments, like my furniture. That's like $200, but there's only about four months left on it. The total, including the payments that you're paying, has to be over $2,000 a month. It sounds like it might be, okay? Okay. But you've got to be at that level or higher. And so, yeah, crunch your budget on down.

Look at what you can cancel reasonably. Yes, to answer your first question, I want to run two debt snowballs. I want to run an active debt snowball, and once that's done, then we'll run a debt snowball on the inactive. Now, let's pretend you've knocked out the $50,000 and we're 18 months, two years from today. Then you're going to start working these bad debts that are in collections. And what you're going to do is list those smallest to largest.

You're going to call the smallest one and find out what they then say it is. You've got a current balance on it. Let's say the current balance on it uh let's say the current balance on it i'll just make up a numbers a thousand dollars okay on your smallest one and you call them up and they say it's three thousand four hundred dollars because of collections fees well that and they may because they try to pull all kinds of crap okay you don't use the three thousand four hundred as your starting point you use the 1 000 as your starting point and you try to settle the debt at or below what the current balance is today when you get

of course okay and you need to get that in writing from them before you give them money each one and do it as a lump sum don Don't put them on payments, anybody. And you do not let them have electronic access to your checking account. It's okay to have electronic access to your checking account, stuff like your electric bill or something, but these are adversaries. These are the enemy, and they will clean your butt out. Oh, yeah, I've heard you say it many times. I will never let them do that.

So run two debt snowballs, an active one, and let's get that one jacked up a little more than you've got it jacked up right now, and get out in 18 to 24 months, and then we'll run the inactive one and settle it for $15,000 or less as you go through. In writing and no electronic access to your checking account. Terry's in Dallas, Texas. Hey, Terry, how are you? I am truly blessed to be upright and taking nourishment how are you just the same sir what's up in your world i am 49 my wife is 41 we've got a 14 year old who'll be going to college in four

years we've got 122 000 in her 529 plan. The 529 plan is handled by Fidelity. And my question is, because you always advocate not investing in mutual funds if you have less than a five-year window, should we be moving her 529 into just basically cash? No. No, I should leave it. I would leave it. I would keep it in mutual funds all the way through.

Oh, all right. So not even when she starts college. Leave it in there. Because right now it's turning, I've got 9.33 in the first six months of this year. Yeah. You want all that you can get, man. You need all the help you can get. Yeah, because rule of 72 would essentially add

50% to that over the next four years. Exactly. And then just continue to leave it in there, you're saying, through the college years, and then cash flow any more if we need to. Yeah. Yeah, I'm just saying what I'm talking about when somebody's starting fresh and they got zero and they're saving up for a car or something like that or saving up for the down payment on their house,

that's different than taking your investments all the way into retirement or your investments all the way into college. And I'm taking them all the way into college. And then the last part of the equation is 14 years old. I've had three go through college now, so I'm a little ahead of you on this game. 14 years old is a good time to start talking about you are going to a college that fits within this amount you're not going to you don't get to go just wherever you want to go

you're going to go to a college that fits within this amount or you do not get this amount and we've kind of started that because her cousin uh did the let's go look at college i think this one is pretty yeah and uh yeah and i we've already said we're not doing a pretty college thing yeah well i mean i just looked up my old college the university of tennessee which i love dearly i'm an alum i support them it's thirteen thousand six dollars a year for in-state thirty five thousand dollars if you come across the state line it is not worth 3x to come across the state line if you live in Georgia go to Georgia you know it's a great school it ain't three times greater than Georgia stay in Georgia you know I mean that's just dumb and so this is the kind of stuff

people do I want to go over there because they have pretty trees in the yard or something and just like this is how they make their decisions and so you just have to start now and go, you know, I know some of our friends have kids, and some of our friends are stupid. I know we have some relatives that have kids, and some of our relatives are stupid. We're not stupid. You have 122 plus whatever it grows to, and that is where you're going to school.

All right, should I also be doing an UTMA? No. If you got some more money and you want to pass some to her, that money becomes hers at 21 regardless of what she wants to use it for. And so depending on how level-headed this kid is and how you're training her, if you want to start setting her up for stuff after college, you can. But with 122 plus what you can put in there between now and the next four years and what that will grow to in the next four years, you're in good shape.

You've done a great job, Terry. Well done. Well done. I mean, who saves $122,000 for their kid's college? I know Terry in Dallas does. That's who. Well done, Dad. It's a great gift.

Not many people get that uh lots of people have lots of other problems because they didn't have that so well done and uh but but with the uh with the power of that size of that account comes the power to help with college selection comes the power to require behavior while you're in school. Comes the power to, these are all the powers I exerted over mine. You're a control freak. Yep. My money. I love my kids.

Not going to do anything for them that's not good for them. My money. Do what I say. That's how that works. You're going to behave. You're going to go to class. You're going to graduate in four years.

Ding, ding. This is the Dave Ramsey Show. Okay, I need you to listen to this, because one normal routine that everyone does can cause total chaos in your life. Folks, I'm talking about the simple act of using Wi-Fi. When you're on Wi-Fi anywhere in public or at home, you're at risk of hackers easily seeing every site you visit and search you're doing online. It doesn't matter if you're doing it on your cell phone or your laptop. I'm not telling you this to scare you.

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You can be secure in seconds. Download Hotspot Shield today. Alan and Sandra are in Denver. I see on my screen you guys are debt-free. Well done. Hey, Dave. Love it. How much have you guys paid off? $74,858.93 in 13 months.

Good for you. And your range of income during that time? What was that? Your range of income during that time? $115,000 is what we made. Okay. And that was right after we got married. Fun, fun.

And what do you guys do for a living? So I work at a cheese factory, and my wife is actually a food scientist. Ah, very good. Okay, what kind of debt was this $75,000? Most of it was my student loans from college, but $10,000, and also my car, and $10,000 of it was Alan's student loans. Okay. So you guys just got married a year ago, right? Yep, correct.

Okay. So you're dating, get engaged. At what point did you find out how much debt she had, Allen? Well, it was while we were dating, actually. So I had mentioned to her, I threw around the name Dave Ramsey, and she was like, who's that? I'd never heard of him. So I had been listening to you for a long time, and Sandy just took to you like fire to a Christmas tree. And when we got married, she's like, we are doing this to get rid of our debt.

And that is just what we did. So I knew about her debt the entire time. I had about $9,000 of my own. Yeah, I got it. I got it. And she had about $9,000 of my own. Yeah, I got it. I got it. And she had about $65,000. That's how it worked. So as soon as you get married, you just come home from the honeymoon and get after it, huh?

Pretty much, yes. That is exactly what happened. And it was rice and beans, beans and rice. Okay. That was what we did. We lived on probably $30,000 that year. That's particularly tough for a food scientist, yeah. I know.

It helped when she got to bring home a lot of free pizza. That was very helpful. That is helpful. Yeah, it made my mouth water. That's good. Yeah, so 13 months. This is unbelievable. I mean, you lived on nothing.

Did you sell stuff or anything? We didn't sell anything. We just literally spent no money, at least weekly. Alan would complain, Cindy, we're not doing anything. We have no fun. Can we go out to eat was the biggest thing for me. To which Sandy says, hey, you started this. You brought up dave ramsey

pretty much i'm the one that mentioned your name dave you're the one brought up dave ramsey now you're wishing you didn't yeah pretty much so it was definitely worth it so what do you guys tell people the key to getting out of debt is um stick to it and don't make excuses. We found the worst part was people telling us, oh, it must be nice. You know, we could never do that. We have kids, or we could never do that. We don't make $200 million a year. But people will just make excuses until their heads fall off, and they will never, ever actually sit down and do it.

But the key is just doing it. And I would say it's also important to know the reason why you're getting out of debt. For us, Alan works at the factory right now, but he wants to be a pilot. So now that we're out of debt, he's been able to go towards his dream job and fly an airplane. So that was a big reason for me, motivation. We have our six-month emergency fund already. All right. You're rocking this, man.

And so you're working towards a pilot license then? Yep, yep, yep. I take the written next month, so I'm pretty excited. That's fun. Congratulations. Well, the stuff showing on the pictures are showing on YouTube. You've got airplanes all over all the drawings and everything. That's very good.

Hey, you've got to have visuals like that to motivate, man. I mean, it just keeps you moving. That's very, very important. Helped a lot. Helped a lot, that's very good hey you gotta have visuals like that to motivate man i mean it just keeps you moving that's that's very very a lot helped a lot that's for sure yeah okay so how long did you all date before you were engaged and how long were you engaged before you got married my dad told me you'd better you'd better date a woman at least a year before you get married and so we lived 40 minutes away worked in opposite cities that we lived in. And so it was just, it was pretty difficult. We dated for a year and a little bit, and he proposed, and then we were engaged for eight months.

Okay, so 18 months from meeting to marriage. Well, there was some friendship before we started dating. It was more like two years, but yeah. Yeah, I mean roughly. Okay, but where in that 18 months did you guys learn that he had $9,000 and you had $65,000 in debt? How far into the dating relationship? I'm trying to remember.

I think it was pretty early on because I was doing my version of a budget at the time, which was looking at my credit card statement from the previous month and saying, maybe I'll eat in and out less next month and just loosely saying that. That's the thing I think I knew from meeting Sandy when she told me she had that much debt. I don't remember exactly when it was, but she's such an organized, ambitious person that I kind of knew right away, this isn't going to be something we have for long. Right, okay. So yeah, you knew she would, you just had to get on the same path on how we were going to do it, but for sure this wasn't somebody that was going to just take that as status quo and go

oh, we're going to be here forever. I knew that right away, exactly, yeah. Alright, so that's why it didn't disturb you when you eventually get down and see $65,000 laying there. Yeah. Yeah. It's an important part of this conversation because there's so many people listening, and I get so many people jokingly say we need to start a dating service around here to match up Dave Ramsey listeners, right?

But it's not necessarily – that's why I haven't done it. One of the reasons is because it's not necessarily true. You guys did it exactly right. You weren't dependent on money for your relationship, but in the process of your relationship evolving, you made the right discoveries. There was no hiding anything, and the biggest discovery was not necessarily the amount of debt,

but it was the type of person and how they were going to treat that debt, and that was the perfect answer. Yep. And yeah, Sandy was much more comfortable after hearing when I told her about the Dave Ramsey thing, you know, after she realized this is all stuff that's just in the Bible. It's not something that he just pulled out of his head. It's stuff that's directly in the Bible. And it's all right there for us to read and confirm,

and it works perfectly. I'm so proud of you guys. Did you have people cheering you on? Because you went hardcore. Well, we actually moved to Colorado the day after we got back from our honeymoon, and so we didn't have or know too many people. Okay. So there was no one saying, you're idiots.

There was not really any cheering us on. We were each other's coach and supporter, and it worked. Okay. So there was no one saying, you're idiots. There was not really any cheering us on. We were each other's coach and supporter, and it worked. Yeah. Yeah. Well, that's kind of a nice way to do it. You don't have any of the outside pressures one way or the other. But from a distance, were your parents looking at you, scratching their head, or were they cheering you on?

They were absolutely cheering us on. Her parents and my parents both were probably our biggest supporters constantly i give asking updates and stuff like that that's good so a huge shout out to them for sure yeah well that's a good note to the moms and dads out there of young people getting married you give them give them some out of boys some other girls you know and they had all heard of you from uh from our church and stuff like that so they were very familiar with that plan had never tried it themselves, but were super supportive of us doing it.

Very cool. What a great start you two got. I'm so proud of you. Well done. We've got a copy of Chris Hogan's book for you, Retire Inspired. That is the next chapter in this story. We've just finished one chapter, and the next chapters get wealthy and be outrageously generous as you go along

millionaire status okay sounds good thank you so much dave and pilot license too i want to hear about it later when you get it well done yep we're we're pretending we're in debt and we're saving up for flight school now so there you go alvin and sandra denver 75 000 paid off in the first 13 months of their marriage making making $115,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free.

Yeah. Yeah. This is how you start right here, people. Wow. So any of you that want to badmouth millennials, you just keep listening to this show and you're going to hear millennials that sound like that. There wasn't anything participation trophy there. There wasn't anything there except get them. There's a lot of get them with those two.

They're after it. They're going to be a big deal. They're going to be. I deal. They're going to be. I mean, good Lord, they're young, making $115,000 a year, no debt, and they already learned to work together. Some of you have been married 20 years. You still can't work together. This is the Dave Ramsey Show. We'll be right back. Our question of the day comes from Blinds.com.

Find out for yourself why Blinds.com is the number one online retailer of custom window coverings. Site-wide savings happening right now. Plus, you can take an additional 5% off if you use the right words. Blinds.com slash Ramsey. That's where the deals are. Slash Ramsey. Today's question is from Ben in Ohio. Is it okay to wait to attack our debt for two months until our weekend vacations are over?

Or should we cancel them and attack now? I don't know what a weekend vacation is. You've got things planned to do on the weekend that you're going to travel and spend money while you're in debt. I guess that's what it is. Ben, you're a grown person. You can do whatever you want to do, but I can tell you this, dude. Until you decide that this matters more than anything

else you're not going to get out of debt you can wander into debt you can't wander out the more radical you get the deeper you sacrifice the more likely you are to get out and the faster you'll get out the higher the probability and the faster the speed because see the more fired up you get the more angry you get the more sick and tired, the more fired up you get, the more angry you get, the more sick and tired of being sick and tired you get, the deeper you're willing to sacrifice your life. So what this tells me is that you're probably not ready to get out of debt yet. Or you're going to wade in, and it's going to take you a long time

to get as fired up as I'm talking about. The young couple I just got off the phone with, they got married. They make $115,000 a year. They came home from their honeymoon. You know what they did? Nothing. That's what they did. Nothing.

For the first year of marriage, they did nothing. Except get out of debt. Nothing. Think about it. But they paid off $75,000 of debt in 13 months, making $115,000. Did y'all just hear those numbers? It's unbelievable. They did nothing.

There's no room in that budget. There is no eating out in that budget. There's no whatever a weekend vacation is. They didn't have one. So, dude, you know, the way you get out of debt is you get angry at the debt. And you get sick and tired of being sick and tired. We make too much money to be this broke. I'm tired of the stress in our life.

I'm tired of not knowing if my kids are going to go to college. I'm tired if I'm going to have to retire and order the cookbook, 72 Ways to Prepare Alpo and Love It. I'm tired of being broke. I'm tired of being normal, which sucks. I'm tired of that. When you get tired, that's when you say, I've had it, and that's when you change.

And you won't have to ask me about whether you go on vacation or not because it won't even be an option. The good news is I'm getting nicer. I know some of you think I'm a jerk, but I'm actually getting nicer. I actually had a couple I was coaching one-on-one about 10 years ago. They were from Texas. And CBS this morning wanted to follow them through the process. So they flew down to Texas.

We filmed a segment of them starting the process. Then we filmed another one, and we walked with them through the segment. The third segment, they were in New York, and were sitting in the studio at CBS at the early show, doing the CBS morning show, the CBS early show. And the woman tells me they've gone on vacation. I made her cry on national television. I'm a lot nicer than I used to be, but I had poured so much into these characters to get them out of debt, and right in the middle of it, she just bows up and goes on vacation while I've got them on national television trying to drag their butts out of debt, and right in the middle of it, she just bows up and goes on vacation,

while I've got them on national television trying to drag their butts out of debt. So, yeah, by the time she was done, she was crying. And it's like, yeah, so now I'm a jerk. Okay, well, no, you're stupid. That's what it is. Oh, my gosh. Unbelievable. So, no, I don't know what a weekend vacation is,

but it doesn't sound like it's something that you need to be doing. It sounds like you need to be working overtime. But, Ben, you're an adult. You get to choose. This show's about giving you the instruction of the process that tens of millions of families have used to get out of debt, and that's what I'm here to share with you. And the process includes the attitude. The process includes your vision. The process is not just mechanical. If this was a math problem, you would have already solved it.

You wouldn't even be listening to the show because we know what the math is. We know how to do math. I mean, sixth grade math will get you out of debt. Crap, fourth grade math will get you out of debt, depending on where you went to school. But, I mean, it's really, it's addition and subtraction. You increase the income and decrease the outgo. How hard is this? I mean, if you can't do it, you're eligible to be in Congress.

But that's all you do. But that requires this tremendous change in the person in your mirror, and you have to get fired up about it. Until you have a really big oomph, a visceral reaction to these kinds of things, you're probably not going to get out of debt. It has to happen. There has to be this big thing. There's really no middle ground.

You can't, like, sort of, kind of, ish, do this stuff. So that's really a big part of the equation. That's why I'm spending so much time on it. All right, George is with us in Houston, Texas. Hey, George, how are you? Hello, Dave. How are you? Better than I deserve.

What's up? Well, I've got a question for you about retirement. I am in a... I work for the local municipality, and we're a member of the Texas County's district retirement system. Yep.

And what I'm wanting to know is when I do retire, can I pool my money and put it in a mutual fund so I can disperse the money? However, I want to disperse it. I suspect if you have a lump sum and you're vested in it that you can roll it into an IRA into some mutual funds. I would do that. Okay.

And then if you're over 59 1⁄2, you can pull the money as you want, and it'll be taxed as you pull it out with no penalty. Okay. I'm 57 right now. Yep. And I'm planning on working until I'm 62. I'm not going to never retire, just retire from that job. Gotcha. Yeah, I hear you.

I hear you. And the total amount estimated at about $317,000. Okay. And they're going to let you have a lump sum? Yes, and I want to know what to do with it. Okay. So I don't want to be eat up in taxes. Okay.

You roll it. It's called a direct transfer rollover into an IRA, a traditional IRA, and there's no taxes on that at all. Okay. And you pick good mutual funds to put it in. And I spread mine across four types, growth, growth and income, aggressive growth, and international. So you probably, you could even start now planning that.

You don't have to do it today, obviously, but you can start meeting with an investment professional. Click on SmartVestor at DaveRamsey.com. Find the SmartVestor Pro in your area. Sit down with them. Start learning about this stuff, and then when you're ready to do the rollover, it's real easy. You just fill out the paperwork.

Once you know what you want to put it in with your investment professional, they send that back to the municipality. The money doesn't touch you. It goes straight into the account. If it touches you, they have to hold taxes out on it. So you don't want it to come to you. That's why it's called a direct transfer rollover and then you don't have to pull anything out at all of that account ever until 70 and a half there's some mandatory withdrawals at that point but if you want to you can pull out whatever you want you'll just pay

taxes on it as you pull it out no penalties okay well i'll go for that i mean it sounds real good yeah it gives you a lot of options. Because, see, that $300,000, if you do that at $62,000 and you put it in good mutual funds, by the time you're 70, that'll be $700,000 if you don't touch it, don't add anything to it. And so you'll be a millionaire when you go into your 70s is what it sounds like to me, especially if you do some other saving, get your house paid off, all that kind of stuff. And so you've done a great job. I mean, that's a good benefit, and you've used it well.

And obviously, you've worked hard. Thank you, George. Appreciate you calling in and being a listener. That puts this hour of the Dave Ramsey Show in the books. Our thanks to James Childs, our producer, Kelly Daniel, our associate producer and phone screener. I am Dave Ramsey, your host, and we'll be back. Hey, it's Kelly Daniel, associate producer and phone screener for The Dave Ramsey Show.

Did you know that in 2017, Dave Ramsey Show listeners paid off $50 million of debt? That's pretty impressive. And it could be you this year. Keep listening for more inspiration.