The Ramsey Show - App - Following the Plan Can Improve Your Marriage, Not Just Your Money (Hour 1)

Episode Date: October 14, 2019

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live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, 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. You jump in, we'll talk about your life and your money. It's a free call at 888-825-5225. That's 888-825-5225. Starting off this hour is Phillip in Orange County, California. Hi, Phillip.

How are you? I'm doing well. How about yourself, Dave? Better than I deserve. What's up? Yeah, first off, just thank you very much for the Financial Peace University. My wife and I went through it in January of last year, and we're still on baby step two, but that's kind of why I'm calling you. Very cool. Good for you.

How can I help? So today actually marks the day that we've gotten rid of all of our credit card debt. Yay. 100%. Yay. So we had about $25,000 in debt back in January of last year. And now we're at $4,500, which is just our sole car that we have. And we're just trying to figure out whether or not we should pay off that car as fast as we can, or if we should actually start saving up on the emergency fund, since we

have a little bit of net worth on that car at this point. And just getting some advice from you. I'm confused. Why would you not do the baby steps? It's just a quick question, just more on whether or not we want to grow that emergency fund more, so that way we can, if for whatever reason it rains, we can go ahead and use our emergency fund as opposed to paying off the car, considering it's only $250 a month.

Okay. Well, I mean, in Financial Peace University, we real clearly say to, of course, be out of debt in Baby Step 2 and then add to your $1,000 emergency fund, raising it to a fully funded emergency fund. I don't understand how you didn't understand the lesson where you're supposed to get rid of the debt. Yep, that's what we tackled right away, right? No, you haven't. No, you haven't.

You just called me up and said, I want to keep my car loan so I can build my emergency fund. Right. That means you didn't understand the lesson. So the idea is that you need to be out of debt because your most powerful wealth-building tool is your income. And you focus with great intensity on getting out of debt so that you get control of your most powerful wealth-building tool, which is your income.

We don't pay off debt, so we save money. That's obviously not what you were supposed to have learned in Financial Peace University. So, yeah, you do not add to the $1,000 account until you get the car paid off. Brad's with us in Midland, Texas. Hi, Brad. How are you? Hey, Dave. I'm doing great. How are you doing today? Better than I deserve. What's up? Oh, hey. I just wanted to thank you first of all. We're on Baby Step

7. Paid off $176K in 18 months. And my big question today is I took a new job and looking at their plan, the investments that I have available to me are pretty much underperforming the market except for one. We already maxed out our Roth 401ks through a backdoor Roth, and the company provides a 5% match. So my question is, I need to take advantage of that 5% match, but should I go ahead and throw the rest in an after-tax mutual fund?

We're getting ready to start doing that anyway. You're a federal employee? No, I'm not. It's an oilfield services company. It's a what? An oilfield services company. Oh, so it's not the federal government TSP? No, no, no, it's not. It's a company? An oil field services company. Oh, so it's not the federal government TSP? No, no, no, it's not. It's a company thrift plant.

Okay. And your options are bad. Yeah. How bad are they? How bad? What is the one option? The one option is an equity fund, and it's actually performed about 13 percent over the life of the fund which uh the the in the international fund is is not terrible as it confirms or goes with international funds

you're about seven and a half percent over the life of the fund there but even even the aggressive is only performing at about a seven percent i would avoid that now i Now, what's your income? My wife and I together, we're about $400,000 this year. Oh, well, you're only talking about $18,000 here. Aren't you maxed at $18,000 on the thrift savings? I had been at my previous companies, yes, and we're also, like I said, maxing out the Roth. But I'm saying the maximum you're allowed to put into this TSP with questionable options is $18,000. Correct, $18,500.

Yeah, out of $18,500 out of $400,000. It doesn't matter. Yeah, max that thing out, because you need to be doing more investing than that anyway. So, yeah, you do your backdoor Roths on a double dip, you in for your wife, you max this out, and then you're going to do a whole bunch more investing in addition to that yeah we're going to put about 10 to 11k a month in the mutual funds yeah so even if these do underperform they're not going to underperform so dramatically that

they pull your whole life apart given that you're not putting that much money in there okay relative to your income and relative to your other savings you see what i'm saying yes sir if they make if they all make five percent and all your other stuff makes 10 to 15 percent over the years you know you're going to kill it and you're not even going to notice and i think they'll make more than five because you're going to go real heavy into that uh that index fund it sounds like it is roughly it. It's that 13% one. And I might put a little bit in the international there. Probably not.

No, I probably wouldn't. I'd probably just put it all in that 13 in this situation and then get some of your diversification in your after-tax stuff that you're doing. Okay, we can do that. That's not a problem. What do you do for a living? I'm an operations manager. In the oil field or something?

Yes, for the oil field services company. My wife's a director at a school district. Okay, well, you guys are doing beautiful. Way to go, man. Congratulations. Ding, ding. Yeah, because $18,000 is such a small percentage, we'll allow that much to underperform to get the tax-deferred growth on that much of it. The rest of it, you're going to be taxed out your eyeballs on anyway because you're evil.

You make too much money, and you must be punished, according to the government. And so, yeah, you're in a great shape, man. Way to go. Very, very well done. Man, oh, man. Man, oh, man. Boom, boom, boom. Love it. Sandra's on YouTube and says, Dave, I want to start investing, but I can only start with $500.

I don't know what to do or who I can talk to about it. Can you help? Yes, I can. If you only have $500, it means you're not out of debt. You don't have your emergency fund, and you're not following the baby steps. And we have those baby steps in place. The reason you don't have any money is you have debt or you don't have an income. And so we've got to get your income up and or get you out of debt so your income is freed up to be able to do long-term investing. You can start a mutual fund, some mutual funds, with as little as $500.

One-time investment. Just set it in there. But that's, and it's okay to do that. But that's not going to make you wealthy. What's going to make you wealthy is getting a steady flow of money going into 401Ks, Roth IRAs, in good growth stock mutual funds. And that's going to have to do with your income side of the equation, as well as having gotten rid of the debt in your situation, Sandra.

I'm reading between the lines, but I'm almost positive that's what you're doing. This is the Dave Ramsey Show. You know, I get asked all the time, at what age should I buy life insurance? Let me be clear. If you have a family, if there are people depending on your income, now is the time to have term life insurance. I don't care if you're 20, 30, 40, 50, or whatever. Your age is less important than your financial situation. If you have debt and a lack of savings, it makes no sense to risk your family's financial well-being based on the cost of a term life policy.

Term life rates are just plain cheap, even if you're not in perfect health. And the best way to compare those rates is through Zander Insurance. Zander only sells the plans I recommend and shops among the top companies to find the best rates and the right coverage for you. Call 800-356-4282 or visit Zander.com. You got no excuse to put this off, folks. Bad things happen to people all the time, regardless of age. And it's your responsibility to deal with this. That's Zander.com or 800-356-4282. Travis is in Jacksonville, Florida.

Hey, Travis, welcome to The Dave Ramsey Show. Hey, Dave, how you doing? Thanks for taking my call. Sure. I was hoping you could settle a debate for my wife and I to move forward with our financial future. We have about $75,000 in debt collectively. We own our home outright.

We have a vehicle that is encased in that $75,000. We both make decent money, and we have an IRA that has about $250 in it. So the question that I'm having is... What's decent money? She makes about $120, and I make about $80. Okay. So the question that I have, or the debate that we have,

is her mother and father passed away last year, and she was left an inheritance. Of that inheritance, she has to take a certain amount of distribution every year for tax purposes. My idea for the inheritance money is to take one lump sum, pay off all of our debt, and then repay ourselves back off of that to an IRA so that we don't have to worry about continuously paying the interest game, if you will. Her worry about this is that she's going to be using some of that or a good portion of that for our retirement. My retort to that is she's 40, I'm 38. We still have a good amount of time to be putting into our different funding accounts. So I guess my question is, should we go ahead and take the distribution, pay off all of our debt so that we're no longer paying the interest rates, or should we go ahead and just pay the debt down as we are and we'll be debt-free within two and a half, three years. Well, we've been using for almost 30 years a decision-making paradigm,

a decision-making structure that is based on the idea what is the fastest way to wealth, what is the shortest distance to wealth. And in the process, in other words, what gives us the greatest returns and what gives us the least risk, what has a level of wisdom to it and is not just one-sided. It's not all investing-minded. It's not all debt-minded. It's not anything.

It's just a process, a financial planning process. That process has now been proven, obviously, doing it for 25 years, and many, many people have become millionaires and multimillionmillionaires gradually not get rich quick using that process um then the question becomes do you guys will you agree to use that process and if you're so that the way i would answer the question obviously me being me is i'm going to tell you use that process and that will answer your question what to do with the money. But you've got to first decide do you want to do that or not. I mean, that's the core disagreement here.

What the process is based on, the process is called the baby steps, and what it's based on is a couple of things. Number one, your most powerful wealth-building tool is your income. And freeing up your income and not having debt not only lowers risk, not only increases the peace and the quality of the relationship in the households, but it also increases mathematically, frees up all of your income just to make money with instead of giving it to banks. And the second part of the thing driving the process is that personal finance is 80% behavior.

It's only 20% head knowledge. The stuff we're talking about is not really rocket science here. There's not a lot to the math. It's about fourth or fifth grade math is really all it is. So having said that, we say, baby, step one, save $1,000. You guys have obviously done that. Two is to be debt-free everything but your house. You've not done that.

Three is to have an emergency fund of three to six months of expenses. I didn't hear that you've done that. And then four is start putting 15% of your income into retirement. So how much is in your emergency fund? Currently we have about 25 or so in our savings account if the inheritance was not on the table what we would teach you to do is take that down to 24 throw the uh or take 24 of the 25 and throw it at the debt and then clean up this debt very very quickly it is absurd for you to have 75 000 in debt with a $200,000 household income.

It was just straight up disorganized. We just got married a couple of months ago and went on a nice wedding and a honeymoon. So that was the majority of the debt. Okay. It's absurd that you make $200,000 a year and you have $75,000 in debt. Mm-hmm. You know, you guys make enough money to have done this the right way. You chose not to do it the right way.

So it's up to you guys. But if you're going to do what we teach, you would use this inheritance immediately to become debt-free so that you take all those payments that you don't have anymore and you use those to build wealth with. You have a paid-for home? Correct. We inherited it when they passed.

Okay. All right. And how much is in the inheritance in cash? I'm not quite 100% sure, but I know it's somewhere north of $175,000-ish. $175,000? Correct. Okay. And why is she taking distributions as though just taking it?

This is what her financial planner told her that she had to do. She had to take distributions to basically cover her tax over each year so she doesn't get hit as hard over tax. It's the most tax-efficient way to take the money out of the account. Yeah, that's a bunch of crap. Okay, because any time you start making your decisions based on taxes instead of based on economics, you make bad decisions. So I don't know what this money is invested in, but I want to get control of this money and get it invested.

So what would I do? I'd cash the whole thing out, pay some taxes, and get a different financial advisor, and I would pay off all the debt, and I would invest the rest of it in something that I can see, control, and know what it is, in good mutual funds or in some paid-for real estate or something like that. I honestly don't think that's what you all are going to do, but that's what I would do, because I think there's a lot of cooks in this kitchen there's a lot of opinions flying around here and you guys have got to get inside this and

as a couple decide what you're going to do and how you're going to handle money and then you start telling financial advisors what to do instead of them telling you what to do and uh it's a different different situation So I think she inherited the financial advisor too. I don't think you picked him. And that's really bad medicine as well, 90% of the time. You guys need to pick him, or you need to re-pick him and hire him again, and this time he works for you. But I think he still works for Grandpa, even though Grandpa's dead dead and that's the way this stuff works usually bad bad medicine travis what i would do

is cash the whole thing out pay off all my debts and invest the money with what's left that's what i would do and i would take your wonderful two hundred thousand dollar income and become multi-millionaires with it and that's what we've shown people how to do for almost three decades now. Hold on. I'll send you guys a copy of the book, The Total Money Makeover. It'll walk you through not only what to do but why to do it, and then you can decide intentionally whether you're going to use our system or someone else's.

Doesn't matter to me. Oscar is with us in Chicago. Hey, Oscar, welcome to The Dave Ramsey Show. Hey, Mr. Dave. It's a blessing to speak to you today. You too, sir. Thank you very much for taking my call. Certainly.

How can I help? My question is quick. I just began to listen to you on YouTube and on podcasts, and I'm just randomly doing everything that you are saying to do without order, but I know I have to get the financial peace university class. I will probably take it online so I can do it in order, but I'm just

at this point very much doing everything you are saying randomly. So the question today is I cut off all my credit cards. Is it okay that I call the credit card company to actually remove those accounts totally out of my name? That way I want to remove the temptation of using it. Is that the right way? Absolutely. You need to close the accounts completely, not just cut them

up. And that'll keep them from reporting activity on your credit bureau report. And it'll keep someone from accidentally fraudulently using them, or you from using them. Yeah, I definitely would close the accounts as soon as I cut up the cards. No doubt about it. Good to talk to you, Oscar. I'm honored to have you as a new listener. Hold on, I'll send you a copy of the book, The Total Money Makeover, and that'll get you started and give you the framework from all these different pieces of information

that are flying around you right now. This is The Dave Ramsey Solutions, Dale and Angela are with us. Hey, guys, how are you? We're great. Thank you. Cool. Welcome. Where do you guys live?

Asheville, North Carolina. Oh, beautiful area. Yes. Beautiful area. I was just emailing with a friend of mine. We're heading over to Highlands to see them soon, but it's the time of year. Yes. It's a pretty area.

Welcome to Nashville. How much debt have you guys paid off? Dave, we paid off $253,188. Wow. Yeah, three years and five months. There you go. Wow. And your range of income during that three years and five months?

It varied quite a bit. We started at $170,000, both working two jobs up to $198,000. And then down, our household salary now is 114 okay very cool what do y'all do for a living i'm a professional firefighter with city of asheville cool and i was in sales when i started and now i work as an assistant as well as a financial advisor oh very good yeah good for you well done you guys what kind of debt is this $253,000? Well, we had a little bit of everything from credit card, 401k, car, taxes, two student loans, and then our house.

You paid off your house? We did. I'm looking at weird people. I love it. Yes. Way to go. How much of the $253,000 was the house? $208,000.

Wow. Almost all of it. Wow. Way to go, you much of the $253,000 was the house? $208,000. Wow. Almost all of it. Wow. Way to go, you guys. Thank you. How old are you two? I'm 41. Mm-hmm.

49. All right. With a paid-for house. Did you ever dream? Never. Yes. That you'd have a paid-for house? I did.

You did. I love it. Very cool. Fun. Fun. So something happened in your all's life three years and five months ago. And, hey, switch flip. Tell me what happened.

Yeah, so a great story. But it started five years ago today when we got married. Very good. Two months after that, we decided to buy a house. And our debt went from about $250,000 to $302,000. And we started on our own path not sharing the debt. I was to pay off what I owed

and she was to pay off her part. Mm-hmm. And I made a really brilliant decision and I bought a flute on a credit card. Oh, good. $300, huge money argument. Mm-hmm. It wasn't an argument.

It was an ultimatum. Whoa. She said, I'm not doing this again this is a second marriage for both of us and she had money problems before with her previous and wasn't gonna do it again so i said i don't know how to do it but i know a guy who does and i led her over to the podcast and and that started our road. Whoa, very cool. Very fun.

So it's the flute that broke the camel's back. Exactly. Dale has two daughters from his first marriage, and the oldest was going to start band. And he went and charged it, and I thought, what? Okay. Well, yeah, that's good. You should be buying your daughter a flute. That even makes more sense. Okay. Well, yeah, that's good. You should, you know, buying your daughter a flute. Okay. That even makes more sense.

Yeah. Okay. Wow. I just didn't see you playing the flute. I just couldn't visualize this. But the firefighter, the flute guy. But yeah, okay, whatever. All right.

Good. Oh, fun. Very fun, you guys. Okay. So, yeah, you did look up and you realized last time one lady told me, she said, my starter husband. The first one, right? She said, that time I figured out that this doesn't work and I'm not doing this again. That's a good line.

I've had it. You had an I've had it moment. And Dale said, okay, I'm with you. I've had it too. Let's fix this. So it wasn't this long, drawn-out argument, but it was kind of just hit the ball and said, no, okay. Look, there's two ways that work. There's a way that works and a way that doesn't work. The way we're doing it doesn't work.

Exactly. Yeah. Well, and I had never really heard of you before, and I didn't even know how to use a podcast. I didn't even know what a podcast was. And so when Dale charged the flute, at the time we kept our finances separate and we were getting ready to go on a vacation to Italy. And I said, I can't do it if you have credit card debt. So we canceled that. And I went on a yoga retreat on my own and part of that retreat was four hours of meditation and I listened to your podcast the whole time and I came back and said okay I'm ready all right let's do that that one will work we can do this guy okay and so then you got the books or financial

peace university or what or just listen to the podcast um mostly we listen to the podcast that's good then we got the book and then we've led um fpu oh okay so it did all unfold after all okay very cool good for you guys well congratulations thank you how's it feel to have no payments in the world amazing wow it's so hard to describe yeah and. And in your case, it also removes this monster in the closet that might bust out at any time and step on your marriage. Yes. You know, and we're just, that's not there anymore. He's gone. Well, and so we try to tell so many people that this isn't just about money. I mean, the day we committed to following your plan, like our marriage just improved so much.

And it's just continuing year after so much and it's just continuing year after year. It's just crazy. It's so hard to describe to people. Three years and five months later, here we are with no house payment. I'm so proud of y'all. Thank you. Very, very well done. Very well done. So, what do

you tell people the key to getting out of debt is? You paid off $253,000 in three to five years? I tell everyone to follow the baby steps. My way didn't work, but yours does. And for me, given that we started out not combining our finances and not being on the same page, that you really do need to combine them. And I know everyone says the budget, it seems obvious, but what the budget. It seems obvious. But what the budget does is it keeps you intentional.

And so when you're intentional with your money, you're intentional with all of your choices. And we like to quote somebody else who says, you know, the key is to keep the goal the goal. Because for six months, it's not... Keep the main thing the main thing. Yeah. It's not so hard for six months

three and a half years can be a long time that is a long time so but you i mean their houses paid for what's the house worth about 350 wow how fun yeah very very very cool so outside of each other who were your biggest cheerleaders as you were doing this? Did you tell people you were working on this? Everyone that would listen. We told everyone. You got some eye rolls. You've joined a cult. Oh my God. But you had some cheerleaders too. Who were your biggest cheerleaders?

I've got a crew at work that's listening right now. Oh wow. And I had a very close friend who I run with and she cheered me on every run. Very cool. Yes. Good for you. Way to go you guys. That's awesome. This is as good as it gets. We got a copy of Chris Hogan's book for you,

Retire Inspired. And that is the next chapter in your story. And that's to be millionaires and outrageously generous as you go along. So you just got one chapter done. You got to finish chapter two now. And then you get to move on to a whole other thing. Way to go. Thank you. Very well done. Very well done. Thank you go along. So you just got one chapter done. You got to finish chapter two now. Yep. And then you get to move on to a whole other thing. Way to go.

Thank you. Very well done. Thank you so much. It's an inspiring story. All right. It's Dale and Angela, Asheville, North Carolina. $253,000 paid off in three years and five months, making $170,000 up to $198,000 down to $114,000.

Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Yeah! Woo-hoo-hoo-hoo! I love it! That is awesome stuff.

Make the main thing the main thing. Keep the goal the goal. That's good. You know, you don't win on accident. I was speaking at my old high school this morning. It's now Antioch Middle School to a group of 8th graders. Very, very sharp

8th graders. And they were very interested in what it takes to become successful and i told them what i tell you guys every day no one is successful accidentally no one is surprised when they become successful we're humbled we're amazed we can't believe it really did happen but we're not surprised because we know we paid a price to get there you don't graduate from college in four years accidentally it's a series of intentional acts that get you there you don't have a great marriage accidentally it's a series of intentional acts that gets you there.

Winning is a series of intentional acts. Make the goal the goal. Make the main thing the main thing. You can do this. I know you can. This is the Dave Ramsey Show. Thank you. Thanks for joining us, America. Jonah is with us in Dallas. Hi, Jonah. How are you?

Doing good, Dave. How are you? Better than I deserve. What's up? Awesome. I am a student at DBU in Dallas, Texas, and I'm 19 years old. I'm currently a freshman, and I am in debt. Before I went to school, I purchased a new vehicle that was $26,000. But at the time, I was working in fast food, and I was making at least $40,000. However, I am currently on my own. I have financial aid and all that stuff. But my real question is, how do I get out of debt and still continue to go to school here at DBU and manage my money properly?

Because in your words, I've made stupid mistakes with my money. Okay. All right. How much is your tuition? Tuition before my financial aid is roughly about $60,000 a year. $60,000? Yes. Okay.

And financial aid is not loans. It is actual help, grants toward that. How much aid do you get? I have about $35,000. Okay. So you're paying a $25,000 a year tuition. And what is VBU? DBU is Dallas Baptist University.

Oh, okay. I'm sorry, I thought you said V, but D, Dallas Baptist. Okay. All right, and so it's $60,000, and it's down to $25,000, which is double what it costs to go to school in Texas. And what do you study? Are you in seminary? No, sir. what it costs to go to school in Texas. And what do you study? Are you in seminary?

No, sir. My degree plan is PPE, which stands for Politics, Philosophy, and Economics. And what do you intend to do? My goal is to graduate here, go to law school, and then from law school go work in Washington, D.C. And the bigger goal, overall goal, is to become president of the United States one day. Okay. All right. Well, we need to shoot high, so there we go.

Okay. All right. And you have no money. Are you working? I am. I currently make, before taxes, $15.60 a month,, $1,560 a month. However, I still need a payoff this semester, and I need to pay my car, insurance, and cell phone. Okay. Well, I'm confused how you're going to make $20,000 a year and pay $25,000.

Right. So how it's broken up here at DBU is it's broken into two semesters. My financial aid so far has covered almost everything for this semester alone due to the scholarship along with my financial aid from the government. So you have in addition to the $35,000 in financial aid, you've got a scholarship? Yes. How much is the scholarship? It's called Christian Leadership Scholarship. How much is the scholarship? I'm sorry?

How much is the scholarship? It pays 40% of my tuition. 40% of 60 or 40% of 25? 60. Okay. Okay, now we're getting there. Because you had me at 25 a minute ago, but now you've not got 25 out of pocket, right? Right.

All right. And so you've got almost nothing out of pocket between your scholarship and your financial aid. Am I right? Almost. This semester alone, I have to pay. Six times four is 24, right? Right. So you get a $24,000 scholarship and a $35,000 reduction.

That would put you at $1,000 out-of-pocket to pay a $60,000 tuition. Roughly. However, this semester I owe. No, exactly. This semester I have to pay out of pocket $2,220-something. Why? However, I currently don't have my financial aid award letter in front of me, and I don't have the actual cost of attendance in front of me.

Oh, so you're giving me a round number. So you need a couple thousand dollars, but it's not much. You've got almost all your tuition covered. Right. Okay, and then you've got $20,000 a year coming in, and you have a $26,000 car that you need to sell tomorrow. Exactly. Okay, and we got rid of that.

We got rid of that debt And you get you a beater And you live on 20 grand And the tuition's covered You gotta come up with some other odds and ends But you can live on 20 grand And cover the tuition And the little bit of tuition you have to cover

And cover your books And that gets you through school I like it Alright, awesome Yeah, I mean You're basically going to school almost free and you're making twenty thousand dollars a year to eat and cover the the part that's not almost right and yeah you can do that i mean you're just going to live real tight and but you got to get rid of the twenty

six thousand dollar car it doesn't fit in this equation it's killing you it's it's the parasite on this program. Gotcha. Yeah, it's sucking the blood out of your whole plan here, man. And so that's why it's got to go. It's nuts. Yeah, if you do that, I think you can make it. I don't know how you're getting through law school.

That's the next step. But you sure did figure this part out. So very well done, sir. You've got to keep that scholarship, whatever that takes. I don't know if that's grade point average or what that is. And you certainly have to continue to get the financial aid, because this is an expensive school. But you've gotten it all covered.

I can't argue with a couple grand out of pocket to go to school. That's great. Well done. Very well done. You keep figuring all that out, you might end up president. All right, Art is with us in Orlando, Florida. Hey, Art, what's up? Hey, Dave, appreciate the call.

Listen, my question is I'm 65. I plan on working another two years to when my wife turns 65 and we can both be covered with Medicare. I have currently about $350 in a 401 at work and $120,000 in my Roth account. So between my Social Security and a defined benefit pension at the end of my work career, I should have enough to live on. I have no other debts. The house is all paid for. Everything else is taken care of. So I guess my question is, once I do retire,

should I look at pulling the money out of my 401 and then reinvesting it in the UROTH account? I would roll it at least to a traditional so you've got control of the investments and so forth because you but but you you've got mandatory withdrawals on a traditional that begin at 70 and a half right if you convert it to a roth you're going to pay all your taxes up front and that's not going to make mathematical sense unless you leave that money alone that account alone probably 15 years yeah but uh and so you know it's not a big deal to just leave it as a traditional i probably would

it's probably not worth messing with i just hate giving the government money up front like this we've already kept it out their hands off of it this long let's keep their hands off of it all the way through yeah i guess that was the question is basically because when i do retire uh between the social security and the pension i feel like i can fund my living yeah you won't need the money and you're gonna and you're gonna be then forced to pull it out of a traditional beginning at 70 and a half your mandatory withdrawal rates and so yeah that's that's there i mean you can you can change it if you want to, but you've got to have in mind that you're not going to touch it until 15 years later, because it doesn't make sense otherwise. But I'd probably just leave it. I'd probably leave it in a traditional and not worry about it.

And then you have the mandatory withdrawals. You don't need the money. You can turn around and reinvest it in something else if you want at that time. You've done very, very well. Congratulations. Great job on saving money, man. I mean, you really did this. Love it, love it, love it.

So, yeah, I'm probably just going to get with like a SmartVestor Pro or whoever does your investments. If you don't have somebody, get a SmartVestor Pro to help you. Click SmartVestor at DaveRamsey dot com to find them and just do it. I always tell people when you leave your company, whether it's retiring, quitting, getting fired, whatever, always take your 401k with you, meaning roll it to a direct transfer rollover into an IRA, a traditional IRA. There's no taxes when you do that. And, you know, I would go ahead and do that first when you retire but then as you reach 70 and a half if you want to pay move some of it into roth to keep from having to do the

withdrawals you can but in a sense you're withdrawn at all when you pull it into a roth because you're paying all the taxes it's the same thing so i i'm not i'm gonna probably just leave it alone but roll it to a roll it to an ir traditional. Put it in some good mutual funds. This is The Dave Ramsey Show. Hey, it's Kelly, associate producer and phone screener for The Dave Ramsey Show. This episode is over, but if you heard about a product or service and didn't have a chance to write it down, don't worry. We list everything that is mentioned during this episode in the podcast show notes section. Thanks for listening.