The Ramsey Show - App - Do You Hear How Crazy This Situation Sounds? (Hour 2)

Episode Date: October 25, 2023

Девочка-пай Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Camel, joined by Rachel Cruz this hour, and it's a free call at 888-825-5225. If you've got a question, a conundrum, maybe you just need us to settle the score between spouses or family, we're happy to do whatever you want on this show. And Hannah's going to kick us off in Akron, Ohio this hour. Hannah, welcome to the show. Hi, thanks for having me. Sure. What's going on? So I am 22. My boyfriend's 23. And my question is, all of our debt will be paid off by April of 2025. That's credit card, two vehicles, and yeah, credit card and two vehicles. All we have left will be our new mortgage we just acquired last year. But our problem is our house is sitting on land that's not in our name. So should I stay on our plan to pay everything off now in 2025

or keep that extra money, start piling into a savings to put a down payment on the property by this next year? So you're looking to buy the land? Yes. How did that not happen with the sale of the house or when you guys bought the house? What was the deal? The original deal was that me and my boyfriend were looking for a house. We couldn't get approved for a house by itself. So we bought a modular home and my grandma said, oh, you can put it on my property. Um, and then you guys can eventually, when you can buy the property and keep it in the family name. Okay, cool. So we did that. Um, and she has just been letting us have it here. So

it's not just some mojo that we have it on. It is family. However, she needs to get out of her debt that she has on the property. So ideally we don't want to cut her short on buying the property just to pay off what she has, but we also want to give her a fair price for it. So we've been here for about a year. We can financially, I think, buy it by end of next year, but I don't know if I should stockpile all my extra I'm putting into paying off my credit card and our two vehicles or put it towards a down payment. Okay. Can we go like a little high level conversation here, Hannah, for a second? Yeah. Okay. So when you are talking about your finances with your boyfriend, you're using a lot of like we statements, we're doing this,

our debt, all of it. So just doing this for as long as we have, when you are not legally married, there is not an hours we conversation. It's a Hannah's conversation. And what's your boyfriend's name? Joey. Joey? Yes. And Joey's money, right? So like, like these, there's gonna be two separate lanes here. And I know that's going to be difficult for you to kind of untangle in your head because it has been so unified. But what ends up happening is, is that you combine emotionally acting like you're married, combining accounts, paying on each other's debt, all of it without any legal representation and no legal documents here that if something happens i'll say if

that it's a complete mess and our job is to be there for the people when it's a complete mess so those are a lot of the calls and some of the the stories that we hear on that side so what i have learned is as separate as you can live that could be financially physically all things like as separate as you live until you're married, it is a cleaner break. There is something about it that it just makes it cleaner on an emotional and financial side. So I'm going to ask you, Hannah, how much do you bring in with your job? What do you make? $50,000.

You make $50,000. Okay. How much, how cards, do you have do, are any of your credit cards have his name attached to them at all? Or are they just, are their credit cards with just Hannah's name? Just the credit card that's in my name. He has his own that he pays. Perfect.

So what's, how much, how much do you have in your, on your, in your credit card? How much debt do you have on your credit card? $2,400. $2,400. Okay, perfect. And then you have a car. Is it just under your name, one of the cars? Yes. Okay. And how much do you owe on that one? $5,000. $5,000. Perfect. Okay. And what does Joey make a year? $80,000. $80,000. Perfect. And what does, for his credit cards, how much does he owe? Only like $1,000. $1,000. Perfect. And what about, for his credit cards, how much does he owe? Only like a thousand.

A thousand, perfect. And what about his car? 29. 29. 29,000, okay, perfect. Okay, cool. Okay, so what I would do, Hannah, is I would be working to pay your, using your 50K to be paying off your credit card, you paying off your car, and he's working his plan.

You can do it at the same time, but I would not be mixing numbers. And you guys off your car and he's working his plan you can do it at the same time but i would not be mixing numbers and you guys have your own plan now the mortgage is it in both your names it is we have to do it that way to get approved yes because you guys can't you couldn't afford it otherwise so right um okay so that's. So my next piece of advice then would be to, if you decide on your own, Hannah, to buy this property, which I don't think you can afford right now on your grandmother's property, I would not be tying my name into land deeds and loans and all of it with a family loan that on a family property that I'm not, I'm not legally bound to. Like he's the one, and honestly, Hannah, he'd be the one that gets screwed in this whole situation if you guys break up. So my next thing would be, I hope not, it's been eight years. Do what? I said I hope not. It's been eight years. Yeah, Hannah and y'all are 22 and 23.

The only reason we're not married is because we don't have the funds to do that. Hannah! Wrong answer. You're telling me you had the funds to get a mortgage but not to get married? Go to Walmart and buy a silver

band. Go on Amazon. I could go right now on Amazon and get you guys two rings for $9.99. You go to the Coral's and get married. Go get married. Do it. I've said that, but it's not good enough. It's not special enough.

Joey. For him or for you? For him. He's making excuses, Hannah. Well Joey. For him or for you? For him. He's making excuses, Hannah. Well, you guys are acting like you're married anyways. So what does a certificate do? It didn't change it that much. So he wants to become a real estate mogul with you, but not put a ring on it.

He's making excuses. He's heard it from both sides. My dad and his dad. Hannah, okay, let me just tell you this. You should be glad Rachel's on this call because my blood my blood is boiling well George you can add in I just your life is like a common core math problem it's so messed up it hurts my brain you guys got yourself into a mess and you're digging a hole deeper by getting entrenched in grandma's financial situation taking on land debt on top of a mortgage that's in both of your names, but you're not married to help grandma out.

Right? Yeah. Did you hear how crazy that sentence was? I know, and I know it was a crazy situation. How about this? How do we back out of this land deal because we can't afford it, and we're 22 trying to figure out our life? I think we get out of this modular home. Number one, that modular home is going down in value.

It's not a great investment anyways. So I would get out of that thing as soon as you could. Good luck finding another renter for it, right? Yeah, that was kind of from the beginning of why it even happened. We have to think about the future when we make decisions today. And I really pray that we can resolve this, that you guys can get out of this mess, that you get married, that you step foot, get on the right foot with this thing. But right now, I'm not continuing with this deal. No, you can't.

You can't afford it, Hannah. You can't afford it. And it's not your responsibility either in this. So I would find, yeah, separate those finances. You guys work your plan. Tell Joey to go on Amazon. I can send them a link. I can send them a link. I'll send them a link.

Welcome back to The Ramsey Show. I'm George Campbell, joined by Rachel Cruz. We're co-hosting The Ramsey Show today, but we also co-host Smart Money Happy Hour, which you can find on YouTube, Podcast, Spotify, Ramsey Network app, wherever you like to listen. And if you want a little easier listening, you want that show you can share with a friend who doesn't really get Ramsey, know Ramsey.

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beautifully illustrated beautifully illustrated so if you have a friend that's gonna have a baby or you're going to a baby shower or maybe like a birthday party you can like put that in the kid's gift and then the parents be like, this is a great message. We should talk about money more. And then you can introduce them. That's what we're trying to do here. Just secretly get you to talk about money and influence your kids and your adults in your life.

And the people that you love. So yeah, go to ramseysolutions.com. And in the store, you can pre-order I'm Glad For What I Have. I can't wait to read it to my little two month old. Look at the pictures in that. YouTube people, you get to see a little bit. Isn't that just beautiful?

It really is. I can't wait to read it to Mia. So sweet. At what age can kids understand you reading to them? Oh. You know, not like fully understand, but what age do you start reading to your kids? I don't know. James has kids, two?

Six months, a year? Two? What age do you start reading to them? No, do they start understanding? Like two-ish, probably. At what point is it not pointless? Maybe 18 months, Six months, a year? Two? What age do you start reading to them? No, do they start understanding? Like two-ish, probably. At what point is it not pointless? Maybe 18 months, 18 months, two years. By the time you start to realize that they understand, it's too late, so just start early.

Get them early. It is true. That is probably true. Well, James has like Einstein babies. They're like prodigy level, just perfect children. So smart. Oh, love it. All right, let's get to the phones.

Roman is in Jacksonville, Florida. Roman, welcome to the show. Hi, my name is Roman. Very nice to speak with you. I'm glad you're taking the time to do this. I'm a disabled combat veteran. I served in Afghanistan. That resulted in me being retired from the Army at the age of 22.

Wow. Fourteen years later, I finally won my battle with the VA of getting compensation for those issues that I accrued while deployed. And I find myself sitting in a unique situation. I'm on the baby steps, but it is a daycare facility with no adult supervision. Here's the numbers. I make $7,180 a month that's net tax-free because of the type of income that it is, compensation from the VA and other disability sources. That's $86,000 annually. The out-of-whack baby step that is most glaring is the house purchase. Life, as you can imagine with my story, has thrown me a

number of curveballs, but I was presented the opportunity to secure housing for myself. I have other debts, but I was able to buy my home from family for $38,000. I currently owe $8,000 more. I pay $2,500 a month. It'll be paid off February of 2023. Awesome. That's a huge chunk. You mean 24 in a few months? Yes, that's what I meant. I wrote the wrong year. Outside of that debt, I owe about 30K on a car and I have $6,300 in credit card debt. If I follow your one through seven steps, which I've not, obviously paying off the house in this manner, you know, that would come later. But I had to do it. The house is valued at $268,000.

You got a great deal. It's within the family, but done the proper way. So I find myself burdened by that large payment each month, but that burden comes from poor management of my funds. So my question is pretty much hearing that, knowing that I'm trying to pursue these steps, what do I do? What's your house payment right now? Just the actual payment itself without the extra? $2,500 even. Okay, you're not putting extra. That's just what it is. I'm buying it from my uncle who owns it free and clear, and I'm paying $2,500 monthly. I have three more months, 3.2 more months. Got it. So this is like a handshake type deal. This is not your traditional loan.

Correct. No mortgage, no interest, no nothing. Okay. And you guys agreed it's going to get paid by this time? Oh, yeah. I've got it. I've got it in contract with him. I was not doing anything else well financially, and I committed to myself, I will put down roots and have a stable, safe place for myself if that's the only bill I pay. It got to that point. So I stuck to it, never missed a payment, don't intend to. Where's the other $4,500 going?

So right now, $7 7180 is my income my bill pay goes $2,500 to mortgage I pay uh 825 in alimony and child support I have 253 auto insurance 154 home insurance you know cell phone bill car note and then you know what's phone bill, car note, and then, you know. What's the car note? Yeah, how much do you owe on the car? I'm sorry? You owe $30,000. How much is it worth?

I could sell, if I sold it today, $18,000, so I'm $10,000 under. And what's the payment? $6,000, $12,000 a month. Okay. Well, I think there's still a bunch of money left over. You may be better off in your weird situation that you find yourself in, having to pay this mortgage back to your uncle, is put extra on the mortgage, get rid of it as soon as possible,

to free up $2,500 to then attack the car and the credit card. Which puts me right back on track with the baby steps. Yes. Yeah, without baby steps. They're out of order. Matching the house thing out, but then doing everything, one through the other numbers. Yeah, yeah.

Well, because if you can't really, you know, you've got to keep making this mortgage payment. You could start attacking your consumer debt, and you still have this going on. But in your shoes with this big old mortgage, freeing that $2,500 up fast could work to get rid of your other debt faster. So either way, you're fine. If you want to do 2,500 on that mortgage, any extra money you have left over, start with your credit card, knock that out,

then move on to the car loan, finish that out. You'd still be okay either way. I think if you did the math, it wouldn't be much difference. Got it. Awesome. Well, you're right. It's a weird situation. Yeah. You know, I, the one comment I'd say, I know you are busy and other callers. I look for, you know, what do you, the investment question then becomes a thing when it does come time to invest with all of my income being tax-free what's the best place to park those funds when i have no other obligations uh well when you're looking at just retirement i mean i would do i would open up a roth does the military have any benefits in that regard not when not when they retire you. They say bye. Yeah, up until then. Yeah, outside of your traditional retirement plans, you've got the IRA. So I would open up a Roth IRA,

max that out every year. That's going to put you, you know, $6,500. It'll go up every year, and you get catch-up contributions after 50. How old are you? 37. Okay. So you got plenty of time, which is great. And having no payments at your age, I mean, you'll be debt-free shortly. And you're not working, right, Roman? This money is... Correct. This comes unless I commit a felony and go to federal prison. Let's avoid that. Let's avoid that. Well, Roman, thanks for your service and all you've done. Thank you. Absolutely. And the other places you could invest is outside of retirement in a brokerage account. You could invest in index funds over there.

You could also get into real estate. If you want to save up and get yourself a paid for rental property or something like that, that's another great avenue to build wealth. Yeah. Winston and I, we opened up just a mutual fund, just a growth stock mutual fund, and put some extra savings in there. It's not tax. You don't get the tax benefit like a Roth, but that's the place we just put some savings. And

if we ever need it, we're able to, without penalty, you know, be able to get it, but we just let it sit in there and have the growth too. So yeah, you have a couple options. That's a good factor there is you will have, you know, your taxes on the gains. Yes. So it's something to think about with short-term gains, long-term capital gains, but it's a great place to invest outside of retirement. It's nice having that bucket on top of retirement because you can't tap into the retirement piggy bank until 60. That's right.

So this is a great way to save up for big purchases. Dave does this. He gets a big royalty check from a book or something and he'll put it in index funds in a brokerage account and it just let it pile up until he wants to buy something. Yep. That's right. It's a good problem to have. Yes. That's great, Roman. Thanks for the call. But yeah, the traditional baby steps for those wondering, he's like, I did this out of whack. We want you to be out of consumer debt first with a fully funded emergency fund of three to six months before you start saving up for a home purchase. So that is the correct order because we find people that get into homes before they

should with a pile of debt on the other side leads to a more stressful life. Yep. You become house poor and that house becomes a burden instead of a blessing. And that's not the American dream. That becomes the American nightmare real quick. This is The Ramsey Show. You're listening to The Ramsey Show. I'm George Camel, joined by Rachel Cruz this hour.

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you'll be entered to win a $500 gift card just for taking the survey and letting us know your thoughts. So go take that survey today. Survey to 33789, ramsaysolutions.com slash survey. The number to call if you want to jump in is 888-825-5225. Julie has chosen to do so and she's in Austin, Texas. Julie, what's going on? Hello. Thank you so much for having me. How are you?

We're doing great. We're great. Glad you called, Julie. Rachel already likes you. I can tell. She's so nice. She likes your attitude. Do what? I said I can tell. She's so nice. She likes your attitude. You're a nice duet. Oh gosh. I said I can relate to you because you're a mom like me. It's not fair. I can't be a mother. I'm kidding. Oh, they're amazing. I have, um, I have a primary question and then I have, um, a few other

questions as well, but my primary is I sell real estate and so I'm really good at making a bunch of money really fast and I'm not so great at keeping that consistent. So the last three or four years of my career, I've been living on gross commission income and not net. And so I'm in trouble with the IRS. Um, and so I, I owe the IRS $150,000 on my home. And I'm wondering if I need to sell my home, um, in order to take care of that. Um, this last summer we had a series of unfortunate events in our family, which has never happened before. And that was multiple car accidents at different times, which depleted our savings account, our HSA and medical savings. And so we're really starting back at baseline for savings as well.

Um, and so I feel very vulnerable just even calling today and asking like, where do I even start? Um, so thankfully, um, our, our debt is relatively low. Um, and I have $60,000 coming in for income the next three weeks. Um, when these unfortunate events happened in our world, late July, early August, the nail in the wall for us was my real estate income. Everything that was in escrow, which was about five transactions, exploded. They fell out of escrow for a variety of different reasons, and I didn't have any income coming in until just now this month. We were able to pay and cover all the bare minimums. We cut our budget in half, do all the have-tos. I mean, we got down to bare bones.

Who's we, Julie? I'm really proud of us for doing that. My husband and I. Okay, what does he make? We have three teenagers. He makes 84. Okay. And I sell about $10 million a year, which brings in growth about $300.

But again, it's not consistent. And I think that's, I would say I'm more comfortable saying $8 million. So are we talking anywhere between $200,000 and $300,000 is fair? Correct. For the last few years. Okay. Has the IRS been in contact with you? Like, are they, what are they saying?

So, I don't know if this was legit or not, but I had a company help me get on a payment plan with the IRS, and I can't locate them anymore. I paid them $2,000 or $3,000 to get me on a payment plan. I'm so embarrassed. No, it's okay. I feel bad. Yeah, no. When you're in a vulnerable state like that and you're desperate, you kind of just make decisions.

And usually in hindsight, you look back and you're like, oh, wow, my desperation drove some of those unwise decisions, right? But when you're in that pinch, you're like, what's anything I can do to help the situation so um i understand how that happens but um okay so a little bit of debt that we have left we've got 25 000 in credit card partially a lot of that was put on just so we could make it through these last few months um car we've one car loan at six thousand dollars and then student loan 15 and then that's it. Okay. Okay. Well, the great thing is Julie, you guys make great money. I would move this IRS debt to the

front. I would, I would say current on the student loans and the car and the credit cards, but I would not be paying extra on anything. I would pay minimum payments on all of those. And I would put as much as I could towards this IRS debt. The IRS debt is always kind of the red flag debt when we hear people, because they can garnish wages. I mean, it's insane, right? So like we want them out of your life as soon as possible. It gets a fast pass to the front of the line. It does get a fast pass to the terrible ride of life sometimes.

I have to have a Disney analogy for Rachel. Thanks. I appreciate that, George. The light in the mood. So what I would do, Julie, honestly, because you're amazing. You're an incredible at what you do, obviously. The market isn't necessarily on your side right now. It's been probably in the last three years.

So you're probably feeling a little bit of that. But if I were you guys, your husband makes great money, I would just say, hey, let's just, you've already cut your lifestyle in half. What's the bare bones we could live on? Because if you guys could find a way to live on 70, right, that frees up 14,000 of his income, all of your income. And together, you guys could get this debt out, you know, within, I don't know, a year, 13 months, if you guys really, really, and if you hustle, Julie, if you were like, all right, I am laser focused. You know, if you guys

called me and you were making 70 and that was it, then there may be some really big conversations we'd have to have. But I don't know, George, you chime in, but I feel like- I'm going, Julie, you're going to make 150 grand in six months, potentially, right? Yeah, I really shifted after everything stopped. I expanded the market that I was in and just took anything that was coming in, and the fruit is here. Good. Yeah.

So that's the deal. Think about it this way. In six months, you could have this IRS debt paid off. But here's the key. I know. That money from your real estate doesn't even touch your life. It hits your bank account, it goes right to the IRS. That's it. That's what you want me to do?

Yes. Like put that as primary? Every single cent you make from real estate right now, go to the IRS. In six months, the IRS debt is paid if you make 150. Gross, right? Now, we still have to worry about taxes for the future income you're making, but then we can knock out your other debt you've got what another 30 how much do you have total 25 6 and 15 so you got 46 in consumer debt after that car first yeah so just knock out smallest to largest balance from there that's probably going to knock out three months later. Are you guys budgeting, Julie, at all, you and your husband? Oh, yes. We have weekly budget meetings now. This is all new for us, like the last couple of months. Do you guys use EveryDollar, our budgeting app? I do. I do because it's a daily

going through our bank account. He's wired differently and likes the spreadsheet. Okay. Okay. That's good. I just want to make sure, yeah, that you guys have some kind of plan that you're doing. That's going to be helpful too. And it's going to be uncomfortable, Julie. I mean, I know you already feel that with already cutting the lifestyle down, but you're a high producer. I mean, you're amazing of killing and doing so well with your work. So income wise, I'm not worried about you guys because you're bringing of killing and doing so well with your work. So income wise, I'm not worried about you guys because you're bringing in great income. A year from now, you could be completely debt free with an emergency fund. So I think the thing is, Julie, it's now up to Julie and your husband

to like look at yourselves. And I'm sure you have just to be like, OK, we're the problem. Like we shouldn't be in this situation because we make great money. And so making sure our taxes are done correctly is very important. And then making sure we live within our lifestyle. And when you do that, it changes the game. You guys will be able to actually enjoy your money that you've worked really hard for. And you shouldn't have to depend on credit cards to make ends meet anymore. You shouldn't have to, you know, take out a car loan for a car. No more living La Vida Loca. It's over. I'm sorry.

But here's what you do need to do. Go get in touch with a Ramsey Trusted Tax Pro at RamseySolutions.com. They can help you navigate this. You don't need to get on a payment plan with some sketchy company. No, don't do that again. They'll help you navigate this, but it's time. And from now on, quarterly estimated payments. That is how you avoid the IRS down your back and how you stay on top of this stuff for anyone out there who's on

that kind of commission type job. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Campbell, joined by my good friend, Rachel Cruz. It's a free call at 888-825-5225. Dale is up next in Birmingham, Alabama. Dale, welcome to the show. Hi, guys. I hope these are easy questions for you. Me too, man. I can't take anything today.

Dale, don't be great. What's going on? I am 57 years old. My salary is 143, and I have the retirement bug. My wife will be 63 the end of this month, and she works part-time and makes between $15,000 and $18,000. We've met with a local social security advisor, and he is a fiduciary,

but he made some suggestions that I wanted to run by you guys. Okay. First, he thinks my wife should go ahead and apply for Social Security at 63 instead of waiting. He thinks that the Social Security plus her part-time salary will keep her out of that 50% penalty. What do you guys think about that? Did you have her take Social Security earlier at 63? Yes, at 63. What's she going to do with the money?

Trade it. So invest it? Because you guys don't need it to live on. No, no, no. We're completely debt free. The kids are grown and young. Awesome. What's your total nest egg? Just a little over a million. Awesome. Good for you guys. Yeah, that's great. I'm going to use that amazing income you have to try to sock away as much as I can in these tax advantage retirement plans in the meantime. But my thoughts around Social Security, Rachel may have different thoughts, but I like taking it early if you're going to invest it. Because investing it, even though it's a

smaller pile of money you get every month, investing that will generally cause you to be in a better financial position in the long run versus waiting and taking it later. And also, it'd be nice to know if, you know, we knew our death day. That would really help us crunch the numbers accurately, but we don't. We don't know when the good Lord is going to take us. So that's part of the equation here. Well, part of me wants to know for planning, but part of me doesn't want to know. Yeah, that's right.

Exactly. That's true. So, yeah, it doesn't sound like they're giving crazy advice to go ahead and take social security at 63 yeah if you're able to kind of have that principled approach though because again you know if you take it early you're getting that you're getting the smaller amount if you go just spend it then it feels like oh my gosh it could have been it could have been higher later but yeah but if you invest it then you're actually going to end up making more and it's in your hands, which is great. So yeah, I'm with George on that one. Okay. My next question is, with my salary, I max out my 401k with catch-up contributions. Good. I max out my HSA. I max out a Roth IRA. Good. And the financial advisor is wanting me to start taking some of that out

using the Rule 55 so that I don't pay the excise tax, but to start putting that into annuities and just go ahead and take the tax hit now. But he's telling me that'll be better in the long run. When you're running out with the annuity. That part feels fishier to me. I'm not saying that they're giving you terrible advice, but I'm generally not a fan of annuities. What was his purpose in saying, hey, put this money here, take this money out, let's put an annuity to give you future income? What's the benefit there

financially? He's pitching it as being better, having a tax advantage, and he's also threatening minimum requirements distributions later on. Out of our nest egg, a little over $800,000 of that is qualified money in a 401k. Okay. What kind of annuity was he talking about here? Because there's different types. I do not recall. There's fixed annuities, variable annuities, indexed annuities. Annuity is not variable. Okay.

Yeah, I don't want to speak ill on this financial advisor because they might be a great person, but I always wonder why are they pushing me to this? What's their end game? Do they get a commission by getting me in an annuity versus me pitching into my 401k? Yeah. That's something to think about.

Yeah. Yeah, and the annuity, I mean... I know. There's a vested interest. I'm sorry. I know that he gets paid for annuity. He told us the percentage. Okay.

And there's nothing wrong with getting paid to put you into certain products, but I just wonder, is that a piece of the puzzle? Yeah, and honestly, Dale, I mean, like with annuities, I mean, it's great because there's basically like the, you know, you can predict there's that confidence factor of what I'm going to get out, but also you can miss so much of that growth, putting it somewhere else too. So you guys are just in a really great position. And so, I mean, I'm not keen on, I mean mean all the tax detail stuff I would sit down probably with like a Ramsey smart tax I would sit down with somebody and

dive into those numbers because I don't want to steer you one way or the other on that but I I feel like the plan you guys are on because again annuities I feel like are more if you're I would the only time I would even consider annuity for me, just from a mindset perspective, is if I'm so fearful of the market, I don't know what's going to happen. And just knowing that there's predictable income that's going to be coming in and it just is okay. But you guys don't have any place to have that fear because you guys have done incredible. You make great money. You continue to invest. And so I wouldn't mess with Adele personally. Okay.

But I would get a second opinion because again, and unless George, you can speak into it, the deep detail of all the taxes, if there is an advantage there, I would get a second opinion and just making sure this guy isn't just selling you a product. Well, you also have some Roth money as well.

So you have to factor that in as far as, you know, you're not going to have RMDs there. You're to have RMDs there. You can strategically start pulling from different buckets. Your Roth account always a red flag when annuities are brought up and it's being pitched by someone. It's at least something to pause and really get a second opinion on this. Because if you didn't do it, Dale, you guys are going to be in a great position. Just hear us say that. You got no debt. You'll have a million plus. And every seven years, if the market returns are around 10%, that money would double. And so at 63, 64, you got $2 million. At 70, you got $3 million. And so as long as you're not withdrawing a crazy amount on these retirement accounts,

you guys should be more than fine. Okay. Okay. And, well, again, that's the first time I've ever heard this annuity spin, taking money from 401K and putting it into annuity. That's what, that was a red flag to me as well. And my final question is, if I am going to have minimum required distribution issues later on, should I cut my 401k back to just

maximize the company benefit? No, I wouldn't minimize investing because of future tax implication. I'm going to put as much as I can in those accounts and we'll deal with Uncle Sam later on and we can be strategic about that. Okay. Because there's certain things you can do where if you pull from the tax-free account,

you're not paying taxes on that. And then you can pull a little bit from the tax advantage account. And so you can start to minimize and work with a tax pro on how to, you know, of course, legally do all of this to where you're not paying a whole bunch of taxes every single year. Gotcha. Keep working and don't worry about problems that might come up 30 years from now. Yes, that's right. Exactly. Dale, I'm so proud of you, man. What a

beautiful picture. Well done. Of just what life looks like on the baby steps. You're what everyone wants to be, Dale. Just calm, cool, collected Dale. With a million bucks. No payments, no mortgage payment. We're good. Maxing out every retirement account known to man. You're going to be okay. Making $143,000. That's a nice story, Rachel. Usually when people talk to us about these situations in retirement and they're in their late 50s, it's sad stories where they haven't done anything. It's hard. That's a nice story, Rachel. Usually when people talk to us about these situations in retirement and they're in their late 50s, it's sad stories where they haven't done anything. It's hard. That's right. And so it's a great reminder to start early. And early doesn't mean when you're 20. If you're 50, start today. That's the next best time to invest. And so don't get yourself down and go,

I missed the boat. There's no point now of investing in a 401k. And the other thing is, a lot of people are spooked by the market and the economy and I'm heading into retirement, Rachel, I don't want to invest, but we've seen long-term the American economy is going to be okay. Yes. Yeah. I mean, we went and looked and ran all the numbers, even when you go back out from when inflation was like really high in the eights to events like September 11th or the recession in, you know, 07, 08. And so you can even start to map all of that. And you watch the growth still come back, still come back. A year or two later, we bounce back.

Yeah, there's still downtimes. But that, it's the long-term play, especially for everyone listening that's, you know, 50 and below. It's a long-term play, long-term play. Do not pull your money out of the market. Please. I want you to retire with dignity. And that means playing the long game. Think long-term. That's the key to building wealth. This is The Ramsey Show.