The Ramsey Show - App - Don't Wait for the Housing Fairy To Show Up! (Hour 3)

Episode Date: March 5, 2021

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live from the headquarters of ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's The 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. You jump in, we'll talk about your life and your money. It's a free call at 888-825-5225. Chris Hogan, Ramsey personality, number one bestselling author, is my co-host. You jump in, we'll talk to you about your life and your money as promised.

Crystal's with us in Philadelphia. Hi, Crystal. Welcome to the Dave Ramsey Show. Thank you for taking my question. Sure. What's up? I am calling because I recently inherited an annuity. And I am not sure if I should just go ahead and pay off my home

or if I should go ahead and roll it over and invest it. How much is it? It is $139,000. What do you owe on your home? I owe $19,000. What do you owe on your home? I owe $119,000. And have you gotten a tax person to look at it and see how much you'll be taxed when you cash this out? I actually just contacted one of your recommendations, and I was supposed to talk to them today, but they had to reschedule the time for tomorrow.

I also had spoken to three of your smart investor pros, which I all liked, so I haven't picked one yet. Good. I'm glad it's hard to choose. So you were named beneficiary on the annuity? Yes. It was divided three ways, between me and my brothers. Crystal, who left this to you? My father.

Your father. I think with you being named a beneficiary, it's probably going to be more like life insurance than it is going to be like an inherited IRA. I don't think you're going to have taxes on it, but I'm not sure. I don't care. I'm not sure.

I think by calling your name the beneficiary on it, I think it's just going to come straight to you. I'm not very good at taxes, though. So the tax people are all out there listening right now going, oh, God! But anyway, so for sure, check me out. Say I promise. Okay, so I'm paying off my house unless I've got a 40% tax on this thing. If it's got a big tax on it of some kind and you can roll it to something, which I don't think you can do. I know you can't roll it into an IRA. You could roll it into a

variable annuity. I'm going to say nine times out of ten, unless you get just some ridiculously horrible information about the taxes, I am going to take it out, even if I got a little bit of tax, and pay it off. Pay off the house, okay? Yeah. Okay. Crystal, how much is your mortgage payment right now? Mortgage and taxes is roughly $1,350. Can you imagine what kind of blessing it is for your father to have left that to you to pay off your home? Like, you get the deed. You own it. And now you have $1 1350 extra in your budget i just had a happy

feeling in my heart because this is this has been a rough thing because my dad was handicapped um 22 years ago and i took care of him for 15 years my brother just took care of him for the last seven we had a family member that was his power of attorney and never invested his annuity. And so realizing the amount of money that it could have been, what I was actually expecting was a little shocking about seven years ago when that person passed away and he went to live with another family member, a brother, who was his power of attorney, and he didn't invest the money either. So this money grew for 22 years at 1% interest, so that hurts a bit.

Yeah. Yeah. But now we're still here, and the good news is your home's going to be paid off. That's right. And when you get ready to leave something to someone, that home will have appreciated, and it'll make a difference. So at any rate, you know, this is one of those things. Let that go. Just realize your father

thought of you and was intentional enough to leave something to you. And you get a chance to continue writing the story together. Ben is with us in Knoxville. Hey, Ben, welcome to the Dave Ramsey Show. Hi, I appreciate y'all taking my call. Sure, how can we help?

So I am engaged, and I'll be getting married here in April. Yay! Thank you. We're both very excited. And fortunately, we're both going into the marriage on baby step six, and our combined income will be about $200,000. And I was wondering how you would suggest managing our individual wants within our marriage. For example, I'm a big gun guy, and so that's my hobby,

and my fiancee likes clothes and furniture and stuff like that. Well, the good news is you don't have any debt except your house, and you've got a lot of money to buy guns and clothes. So, I mean, you call me up with this problem, I mean, with $300,000 in student loan debt, because I would have said no more guns and very few clothes. But, yeah, I mean, the good news is you can sit down together, and I will just tell

you, uh, every gun I buy costs me at least two purses. So we have a, we have a formula at the Ramsey house and I'm with you. I got a lot of guns and you know what that means? She's got a lot of purses. So, um, you know, you're just going to do some of that right there and all kidding aside and i think you just talk about it and you know it would not be fair for you to spend you know uh three times more than she's spending on those things but both of you have some fun money category room in this budget you described yeah and ben is this a first marriage for both of you

yes okay that's fantastic man i'm going to tell you this have you all done the pre-marriage counseling uh we're starting that next okay that's imperative uh and really dig into that uh get on the same page because financially it sounds like you guys are in sync now it's a matter of as i tell people all the time you got to speak french right it's not you her and you is. And so that mindset of the muscles you all have already been flexing, learning to communicate and flex those together. Your biggest problem is

that you're both used to having your own life. And you're now going to combine lives, and that's going to require some, that's going to be a little bit stressful in that regard. Yeah, a lot of feelings. What we're going to do is we're going to put you into Ramsey Plus, and that hooks you up with the Every Dollar Budget

and puts you guys through Financial Peace University as part of your pre-marriage counseling. We're going to give you a wedding gift. Yes. So you hold on, and we'll give you a year in Ramsey Plus, and Kelly will pick up and do that. Now, what you'll do is jump on that Every Dollar Budget and lay out a pretend budget as if you were married. That's good. And then it'll give you something to talk about in the pre-marriage counseling.

You're going to go ahead and have some budget fights right now. Yeah. You're going to spend what? But, again, the communication on it, being able to lay it out, looking at the ratios. You do have a common goal, baby step six, of paying the house off, too. That's right. So there's only three things you can do with money. You can spend it to enjoy it.

You can give it, and you can invest it. And you need to be on the same page on how much is going to what. And there should be plenty of room to do all three of those things with what you have described here. You guys are making a lot of money. You're doing really well. Congratulations. Seriously. That's going to be good but yeah they they you all have uh a streak of uh independence because you've lived as grown-ups with a lot of money before now you're going to have to combine

that and that's going to be emotionally there's going to be some friction with that it goes with the territory so just put it all out on the table work the friction work the friction it's going to be some friction with that. It goes with the territory. It does. So just put it all out on the table, work the friction, work the friction. It's going to be great for your communication in your new marriage. This is awesome. Put the Lord first and then the sinner, and all the other stuff will work out just fine. This is The Ramsey Show. This time last year, we didn't know how our lives were going to change. We didn't have a clue that COVID, job loss, and homeschooling were about to take over our daily existence. And you may be feeling like last year got away from you.

Maybe you lost complete control of your money. Or maybe you had to find a new job quickly to make ends meet. The bad news is a lot can happen in a year. But the good news is a lot can happen in a year. Which is why now is the time to think about where you want to be this time next year. And if you're looking for a proven plan to get back on track, our number one bestselling book, The Total Money Makeover, will walk you through the seven baby steps for getting

out of debt faster, creating a budget you can stick to, building real wealth, and becoming outrageously generous. Get your copy of The Total Money Makeover today at the online store at DaveRamsey.com or call our Ramsey concierge team at 888-22-PEACE. That's 888-227-3223. Chris Hogan, Ramsey personality, is my co-host today. We invite your calls at 888-825-5225. 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. You get free samples, free shipping, and with the new promos they run every month, you save even more. Use the magic word, the promo code RAMSEY. All right, today's question comes from Dave in Kentucky. He says, I lost my wife in December of 2020. My goodness. I have an eight-year-old that will start receiving survivor benefits of $858 per month from Social Security.

By the time she reaches 18, the total of those payments will be around $100,000. What would be the best thing to do with the money so it earns interest and is worth more once she's 18? Wow. Well, Dave, I'm so sorry to hear about your loss, my friend. That's tough, and I't imagine uh what you're going through i hope you've got a good church and good friends around you but looking at this this dollar amount this 858 survivor benefits coming in this has got to become part of your budget uh you're

going to use this to raise your daughter yeah whatever whatever baby step you're on and if you'll follow the stuff we teach uh by the time she's 18 you'll you will have fully funded her college funded she'll have a lot more than a hundred thousand dollars and you will have become wealthy over that 20 years and she will have a lot more than a hundred thousand dollars and so there's not any moral ethical nor legal obligation for you to set this money aside in her name you spend more than 858 dollars raising a kid a month anyway and so just put it into your budget and work your budget because we're counting on you to be a great dad and anytime you work your budget it is for the good of you and your family yeah and so your daughter is going to more than benefit far

beyond what the 858 dollars would have have done by you doing the right thing. People struggle with this. Child support, I should set it aside. No, it's all part of the budget because you spend more than those dollar figures on kids anyway. Just to raise them. Yeah, no, without a doubt. I mean, the percentage of the roof replacement, the percentage of the electric bill, the percentage of the insurance that the kid rides in the car, the cost of the car, the value of the loss in the car. The kid is receiving the benefit of all of that.

And this is called raising your children in a family. It's what it is. And so mathematically, you spend a lot more than that on the kid's portion of your life. And so you've done nothing wrong by not setting it into a separate account. And as a matter of fact, setting it into a separate account I think would be wrong. It's the improper use of it. It's not the most efficient use of the money. So good question.

Natalie is in Canada. Hi, Natalie. Welcome to the is in Canada. Hi, Natalie. Welcome to the Ramsey Show. Hi, Dave. Thank you for taking my call. Sure. I'm trying to figure out a few things, but the main thing is whether or not to try and get my husband on board with selling our house.

I've brought it up a few times, but he really doesn't want to sell it at a loss. We moved a year ago about an hour and a half away from his current work. He planned on getting a job around where we live. We live in the middle of nowhere with the intention of being able to grow our own food and just be out in the country again where we both kind of grew up. And anyway, it hasn't happened yet. He's trying, but it hasn't happened. We just realized we were expecting another. So we've got one toddler and another on the way. So he has a job.

It's just an hour away. An hour and a half, yes. So he's traveling about three hours a day, but the income is, uh, he takes home about, uh, 31,000 and some, uh, 31, almost, uh, 31, 200 a month. And, um, we don't have any, um, uh, real issues, I suppose, with spending that we're aware of. We don't, you know, we don't have any subscriptions. We don't have. We don't, you know, have any subscriptions. We don't have any money. No, we don't have any money to spend. 31,000 in a three-hour drive a day? I know where your money is. And babies? I mean, you don't have

any money. No, I don't know how to convince them. We're both believers. Unfortunately, because of COVID, all the churches are shut down. The one we did get to know, it's closed now, and we really haven't developed any sense of community around here. How much do you owe on the home, Natalie? Okay. So, so far, we have, we, oh, it's around $280,000. Okay. It was $300,000, just under $350,000 when we bought it. How are you making a payment on that, making $31,000. Okay. It was just under 350,000 when we bought it.

How are you making a payment on that, making 31 grand? Well, we're losing. We're losing every month. How? What do you mean you're losing? You're going into debt? No, not yet. Oh, you're eating up your savings?

Yes, we're eating up our savings. Yeah, I would guess. How much is your house payment? $1,183. And how much do you all have in savings right now? Oh, we're burning through it. Uh, we've probably got, yeah, right now, we've got $1,900 left to our name in liquid. And you're burning how much a month?

I don't know. We are burning. I wrote this down too. Got all kinds of papers in front of me. $2,707.40. So you don't even have a month left? Not really. No, not really. I mean, 2,000 over 1,900. You don't even have a month left? Not really. No, not really.

I mean, $2,000 over $1,900, you don't have any money left. Yeah. I don't know what to do. I don't know what to do. I'm trying to say... Okay, I'm a little bit confused. Let me stop. I don't want to take your side and jump all over him right now, but that's how I'm feeling. No, no. That's how I'm feeling. I don't want to take your side and jump all over him right now, but that's how I'm feeling.

No, no. That's how I'm feeling. I don't want to be. Well, because this is absolutely asinine that you guys have let this, that you've let this burn down to this. Y'all should have been out of there six months ago. I agree. And so I don't understand why we're in denial about math. What's his problem?

He doesn't want to sell it at a loss. I don't care. He's going to lose it to foreclosure. But you said you bought it at $350,000, correct? And it's now you owe $280,000. So what do you think it's worth now? I wish I knew.

We haven't gotten the price. So here's the steps. I think in sitting down and really sitting down with him, hold his hands. I've scheduled a real estate agent to come over here tomorrow night because tonight we're about to have a come-to-Jesus meeting. The math is over. We cannot pretend anymore.

You've got your head stuck up something. I don't know what it is, and it's got to come out. This is ridiculous. And put his hand on your belly and let him know you've got another baby coming. This is crazy. Time is of the essence. I have. He's even finished your book.

We bought your book on Amazon. He read it. He's so excited, so gung-ho. He's trying to look for more jobs now, but it's just like... It's not about jobs. It's about this house is gone. Yeah. Yeah.

It's got to go. It's a three-hour drive with a pregnant wife who's scared, and he's out of money. This house is gone. Sell it before you lose it. What do we do? Do we rent? You move to town. And rent.

When we went there, it was $1,800 a month. You're going to have to get other jobs. But listen, your little dream of living in the country and growing veggies has turned into a nightmare. Yeah. Yeah, I know. And so something's got to change. You cannot stay where you are. It's not going to work.

Now, then the only question is, where are we going? Right. And you've got to start figuring that out as a next step. But I don't know what you were waiting on. Were you waiting on the housing fairy to show up? I mean, it's not, this isn't, you know, unless you were going to have an income, all of a sudden start appearing that it's double yours. Yeah, it's not going to work. This is not going to work.

It's not sustainable. It's got to go. And so, Natalie, the urgency you hear in our voice is that we don't want you all hanging out for another two to three months. You don't have that. You don't have that. Yeah, you don't have that time. So I would much rather you all make a proactive decision. Reach out to your lender.

Have a real conversation. Get the real estate agent, the real estate ELP over tomorrow. You are moving. Yeah. Voluntarily or otherwise. You are moving. Much rather you be in control.

This is where you are. And so let's face it and decide what we're going to do. Where are we moving? Because we're moving. This house is gone. I'm so sorry. I'm sorry you guys have been through this. But you've got to deal with it.

You cannot not deal with it anymore. Chris Hogan Ramsey personality is my co-host today. Open phones at 888-825-5225. Elizabeth is in Tyler, Texas. Hi, Elizabeth. Welcome to the Dave Ramsey Show. Hi, how are you doing today? Better than I deserve. What's up?

I have been asked to take over doing the treasurer for my property owners association. And are you there? Yes, ma'am. um and um okay sorry um so anyway so I've been asking you that and I am curious about um uh personal liability if I should be concerned in any way in regards to that you would need to ask an attorney I'm not one I do own many, many, many pieces of real estate in HOAs, and most of them are a hot mess. Yeah. And so there's always conflict and drama and gossip and stupidity and everything else. You would, as I understand the law, and again, I'm not a lawyer, so it's a legal advice question that you're really asking.

But as I understand the law, you would not have any liability unless there was misbehavior. Now, obviously, if you bought yourself a new grill for your backyard out of that money, then you would obviously be liable for the misbehavior. Or if there was gross negligence, you did a horrible job beyond the pale of what any kindergartner could do, then you might be held liable. Most of the HOAs carry errors and omissions insurance for their board of directors. And so if a resident files suit against them for mismanagement or negligence or fraud or whatever else, the E&O will step up. The insurance company will step up and defend them legally. So most of the time you're not, I mean, you might have to be out some legal fees, but you would not be held to. If somebody didn't like the color of paint that was chosen for the front fence, which will happen. Yes.

Then you're not liable for that. Yeah. Elizabeth, Dave's not allowed to be on any kind of committee like that. People would end up crying okay i'm just going to tell you uh but i i think you know do you have a lot of time do you want to do this or do people just want you to do it well it's so it's an interesting situation i live in a neighborhood where i have an hoa and a poa and the association, the POA, is just for my street. Okay.

Because there's certain expenses that we are responsible for just on our street. And so this is for the POA. And so I'm not so sure that we have errors and omissions on that because it's such a small thing. Well, it would have to be the people on your street

or the HOA that you pay money to out of the POA. Someone would have to get pissed off and sue you. Yeah. From a practical standpoint before you would have any liability. So as long as everything's fairly low drama, you probably don't have any issue. But I can't make that promise in an HOA. As you can tell, I can't stand the things. And no reflection on you, Mr. Elizabeth.

You sound like a sweet person. She's a sweetheart. You can tell. But too many of the people involved in them really don't have a life. And so. What did you tell me, Dave? What's the percent of people that need to be incarcerated? Is it 2% or has it grown?

No, not incarcerated. Institutionalized. Institutionalized. Same thing. Yeah, well, sort incarcerated. Institutionalized. Same thing. Yeah, well, sort of. Ish. Ish. Yeah, and it's a higher percentage in HOAs.

It is. Oh, yeah. No, I'm just not a fan. I'm an... Yeah, okay. Just let that... Yeah. Here we go.

Kelly! Kelly! Kelly's in Atlanta. Hi, Kelly. How are you? Hi, good. How are you? good how are you better than i deserve what's up uh thank you for taking my call it's such a blessing uh i have a question about uh are my okay so i'm a stay-at-home mom and i'm married my husband makes about 60k a year as an essential worker. His career has the potential to grow his salary to about 70K within the next five years. We have two children

under three, and I currently have an AS in an essential field with the potential to get a BS in engineering after we complete our baby step number three. That would be no longer than two years from now. We are currently paying off our house, and that's the only debt that we have, which is about $155,000 left to pay off. He's mid-20s, I'm early 30s, and we're wondering out of these three options which might be more advantageous for us financially speaking the first option would be if i go back to school and i get a bs in engineering in less than five years to jump start a career with a higher salary while maintaining our lifestyle at only 60 to 70k a year with extra towards other baby steps. The next option would be should we maintain his salary and career and the lifestyle that we have now?

Or the third option would be would it be better to go back to work part-time and try adding on to his salary? The reason for us changing head of households would be because we feel like one parent should be at home with the kids. But, you know, there's always the possibility of us just, you know, adding on to his salary and we could both be at home at the same time. Mm-hmm. Yeah. Well, I mean, there's two or three things going on. It's not just math. If it's just math, the answer is how do you make the most money? Mm-hmm. Yes, I mean, there's two or three things going on. It's not just math. If it's just math, the answer is, how do you make the most money?

Yes, sir. And then you've got to say, okay, but what's the trade-off on the way that makes the most money? Right. What do you want to be doing career-wise, as well as wealth-building-wise, as well as parenting, five years from now, ten years from now, and which of these decisions takes you to that person. And so we call it around here when we're setting business goals, when we're doing strategic analysis in the business, we say, what's the desired future? Where do you want to be in ten years? And then what must be true that's not true today for us to arrive at that desired future? And in your case, could it be a degree?

Could it be a change out in your husband who's at home, who's not? Could it be a different way to do engineering? Could it be? I don't know. I mean, what has to be true for you to hit your parenting goals your career goals and your uh uh relationship and wealth building your wealth building goals the closest and those things need to be all three laid out there at the end and then you start backing out of it in reverse engineering and say okay what must be true that's not true now and you're kind of saying that because you're saying

i got to go back get a degree if i'm going to go this way. I need to go get the BS if I'm going to do this instead of just the associates, right? And what must be true if we want a parent at home? Well, he might quit if you go make more money and come home and be a stay-at-home dad. What must be true? These are things that must be true with the different options. But then if you do those things you look back and say the trade-offs because there always is yes there is we're the right ones yes yeah no you're right and and kelly you all deciding and talking about that so you can put the priorities and your

husband may have a different level of priorities but what i want you all to do is to have the time to communicate and then hear, listen with your heart. It's so easy to listen with your ears and your head. But when you listen with the heart, what you're doing is you're really hearing and feeling and understanding the person. And if your husband can feel that you're doing that for him and he's doing that for you, you all will look through the lens for these kids and say, hey, what's the what's the route? What do we do? And like I agree with you it's always give and take uh we want the take take uh but we got to do the give well i think too i mean

you know i'll give an example i had a young lady the other day that um was telling us that she had always wanted to be a nurse and so coleman ken coleman and his show suggested she go and shadow nursing for a couple of days. And she went to the hospital and worked, you know, beside a nurse and went, oh, I don't want to do this. Ah. But nursing is a good career. Right. And it's good money. It is.

And you can always get work. And that was what was appealing. But then the actual doing of the job. So you didn't like it. Yeah. Do you want to do engineering 40 hours a week, 10 years from today, with your BS? Is that what you want to do? Nothing wrong with that.

But you need to be sure. That's a lot of stuff given up to get there. It sure is. You better be sure that's the ladders leaning on the wrong building. Ooh. Our scripture of the day, Romans 14, 18-19, Whoever thus serves Christ is acceptable to God and approved by men. So then let us pursue what makes for peace and for mutual upbuilding. Winston Churchill said,

Mountaintops inspire leaders, but valleys mature them. Open phones at 888-825-5225. You jump in, we'll talk about your life and your money. This is your show. Chris Hogan, Ramsey Personality, is my co-host today. Mary is with us in Tacoma, Washington. Hi, Mary. How are you?

I am well, thank you. Thank you for taking my call. Sure. My question is actually from one of Mr. Hogan's books. I read that you could move money from your IRA to your HSA one time, and I was wondering why you would do that and if I should do that. Are you sure you read that right? No. Okay.

I don't think – I may be wrong, but I don't think you can do that. Yeah, I don't think you can either be wrong, but I don't think you can do that. Yeah, I don't think you can either, Barry. What's the example? What are you trying to do? What are you trying to accomplish? I know you, I'm trying benefit to it a few years ago when I did something wrong, and I was hoping to just kind of make that up with this transition from, because I know you can move a little bit.

You can't move all of it, and you can only do it once in a lifetime. Really? Really. So you read that in Chris's book? and you can only do it once in a lifetime. Really? So you read that in Chris's book? I did, yes. And then I went and looked it up on the IRX tax site, and you can do that. Well, you may know more about it than either one of us do,

including the guy who wrote it in his own book. What the crap? I don't know what that's talking about. But what are you trying to accomplish? Are you trying to fund the HSA, or are you trying to max out your IRA? I'm trying to max out my HSA. Why? With about $6,200 from my IRA.

That's why I was calling, because Mr. Hogan wrote wrote it and I wanted to know why you would do that listen you'll have to send that to me because that doesn't sound it doesn't make sense the goal of having the money in your HSA obviously is being able to put that money there almost like a medical emergency fund the goal of putting the money in your IRA

is to be able to grow that, right, to be able to, for your high-definition dream. So, you know, one is there as a safety net in the HSA that you can invest, right, but then the IRA is there for your dreams. So the cross-moving of those funds, you can't. There's no purpose for it, even if you can do it and you've evidently looked it up and it's allowed one time okay that doesn't mean i would do it right um and even if chris hogan said in his book and he forgot it which i don't think happens i think

you're reading something else uh but because i i have never heard of that and i read chris's book before it was published so um i would have caught it and i would have said what are you talking about the logic because i didn't know you could do that but apparently she's looked it up in the irs let's assume you can do it okay and you and i just don't know what we're doing which is probably true so um that's okay i mean we can't know everything and so uh um i think she probably is right you probably have a one-time thing for whatever reason i still don't see any reason to do it that you to do it. That you would do it. Yeah.

There's no, there's no, and so the answer would be, unless you've got a really good reason, and the reason, and the movement, you know, causes the reason to occur, then I wouldn't do it. I wouldn't do that. Now, you know, I guess a reason could be if you had a huge medical expense coming, and you wanted to pay for it with pre-tax dollars, you could dump a bunch of money over into your HSA by doing that rollover and pay the medical bill. And I've done it with pre-tax dollars and saved the taxes on the medical bill, which if you take it out of your IRA to pay the medical bill, you're going to pay taxes on it. Absolutely. So that would be a reason, I guess, if you had a huge, you know, let's say you had $50,000 in your HSA and you had a medical bill that out of your pocket was going to be $150,000 and you want to move $100,000 over there. That'd save you $30,000 in taxes to do it.

So that might be a reason. I mean, I can start to work my way through this logically that there could be a rare circumstance in which you would do it. But as a general planning tool, Chris is right. No, I would keep these separate. One is for medical care. One is for dreams. And don't confuse the two. Yeah, I'll have to research that.

It's interesting. Yeah, very, very different. I have no idea, but let's just go with all that. All right. Andrew's with us. Andrew's in Fort Worth. Hi, Andrew. How are you?

Hey, Dave. This is an honor. I really do appreciate all y'all are doing. Thanks, man. How can we help? So I work for the city of Dallas and I contribute to a pension. So I've listened to you for quite a long time and I haven't heard much about pension. So I know you say 15% of your income into retirement and me and my wife are right about that point so i'm already being forced to take out about 13 into this pension which i know if i actually retire here will be great but it's not really growing much than that so i just don't know should i just you

know aside from the 13 put two percent and like a roth or something or do i just even count that i mean i do plan on retiring from here. Yeah, and, you know, depending on your years of service, you might get a lump sum rollout if you left there and that kind of stuff. But still, it's not growing well, and you don't have much control over it. So that makes it scary. And it's a pension, and it's not in your name. If the city of Dallas became insolvent, you could lose it. And that's happened in other cities.

I don't think that's going to happen in Dallas. I don't have any reason to believe that. But I'm just thinking through the situation. Versus a 401K is 100% in your name. Or a Roth IRA is 100% in your name. And there's no way to lose. If your city went broke, you don't lose that money. Your company goes broke, you don't lose your 401K.

So, anyway, what I tell folks in these situations, because you don't have control over it and because it's not growing as well and because it's not an asset in your name, I count it already putting 13.5% in there, let's put in, you know, count that 13.5% at about half, let's call it 7%. So you need to put in, you know, you need to put in about 10% of your own money in something else. Okay. Give or take, 8% of your own money in something else. Maybe not the full 15%, we're not going to ignore it and act like the pension's not there, but I don't want to count it at $100 on the dollar because of the concerns. Does that make sense? Yeah, it makes sense, and I hate it this way because I've been noticing recently

how much I'm actually putting in there. I'm putting in like $300-something a paycheck. Yeah, that's a lot. And I'm thinking, man, I really wish all these years. I've been there for 10 years how much money i would have you know so yeah and it just it doesn't grow as fast and everything now if your wife works outside the home a full 15 of her income yeah i know she's a stay-at-home mom so okay then this is simple yeah so let's see then let's call it um you're gonna you're putting in 13 and a half there and uh we're going to count it at half and so you need to put in about eight percent of your income into something else what

do you make uh about 65 a year okay all right and and so you know you can probably just do a roth ira and you'd be pretty close. Okay. Okay. And some good mutual funds. And that's just kind of your backstop if something got weird or sideways with the pension. All right. All right.

Yeah, and that'll make you feel better because you'll say, hey, I'm not all in on this pension. I've also got some other money growing. And as your income grows, you're going to be in a better situation. Yeah, and you may want to do more may want to hurt you may want to another roth ir in her name yeah which you could do but you know you can do six thousand dollars that's gonna be that's gonna be pretty dadgum close um and won't kill you and you know you'll get to see that money build and that's all in your name of of course. And you have control of it. Yeah, click SmartVestor at DaveRamsey.com. They'll help you get an IRA set up for a Roth and some good mutual funds.

Good show, Chris Hogan. Yeah, that was fun, Dave. Thank you for having me. That puts this hour of the Ramsey Show in the books. Thanks to James Childs, our producer, Kelly Daniel, our associate producer and phone screener. I'm Dave Ramsey, your host. We'll be back before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of The Ramsey Show.

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