The Ramsey Show - App - Parents Should Be a Safety Net, Not a Hammock (Hour 1)

Episode Date: May 22, 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, your money. It is a free call at 888-825-5225. And some people say the advice here is worth what you pay for it. 888-825-5225.

Ted starts off this hour in Toledo. Welcome to the Dave Ramsey Show, Ted. Thank you, Dave. So first, thank you and Kelly and the team for following God's calling. Really appreciate it. Thank you. Yes. Investing was never talked about and certainly not taught in my family and hardly mentioned in my bride's family. And after all that I've learned, and it's worth way more than what I paid for it, by the way, my question is, does building, you know, and wanting to shine light on the topic for my siblings and my parents, does building a sizable net worth impact eligibility for both Social Security income or WIC? Well, it would for WIC.

WIC is welfare. Right. But, I mean, obviously wealthy people don't qualify for food stamps and welfare programs. They're for poor people. But it does not affect Social Security at all, not one dime. Okay. And so, you know, when you pay into Social Security,

there's a formula that is used by which you don't even get back the amount you put in over time. You have a negative rate of return. And so, but you'll get, you know, a set amount back based on what you have put in and the number of years you paid in and so forth. They have a formula. And they, you know, they have a website. You can jump on there and calculate that. But really, there's not anything you can do with Social Security except do it, and it's the law, and tolerate it. It's one of the many stupid things we have number of millions of dollars, you would still go do it.

Because otherwise you'd be saying that the Social Security system is better for me than being wealthy. And that would be like a dumb but statement. You know, you wouldn't make that statement so um you know instead we say things like well i'm going to take care of myself because i don't want to wait on the government to take care of me which is well known for its ability to handle money no we don't do that so it's ridiculous but yeah it's a fun discussion to have i guess if you want to argue uh politics with socialism people uh but it's a fun discussion to have, I guess, if you want to argue politics with socialism people. But it's, you know, I've got other things to do. I've got to help people, and I don't really want to get into all those arguments.

But it's an interesting discussion. Thanks for the call. There was a point about, gosh, I don't know, a bazillion years ago. I've been on the air 27 years, so I forget what year things happened. But George W. was talking about the idea of taking 2% of the 15% that we put in. If you're on payroll, you pay 7.65 into Social Security, and your employer pays 7.65 in the payroll tax. And if you're self-employed, you get to pay both sides, so 15.3. And they call that self-employment tax because, of course, Washington is for small business.

That was sarcasm. But George W. was discussing the idea of letting us keep privatizing 2% of that with a mandatory investment of 2% in anything other than Social Security. So here's the math. If you calculate the typical Social Security person paying in, what we pay in, and the typical person, what gets paid out, you have about between a negative 2% and a negative four percent rate of return translation you would have been better off to put the two percent that george w is talking about in a freaking fruit jar you would have come out ahead grandma's cookie jar on the counter bubba okay comes out ahead were you to

actually put it in an investment over the scope of your working life, like, say, 20 to 70, say, 50 years, and you put 2% of your income into that instead of into a program that made 10 or 12%, okay, instead of into a program that loses 2 to 4. Here's how the math works out. 20s 30s or 40s you could say if you'll let me put two percent of my money into anything you can keep all the other money to this point i have given you just don't make me give you any more and you would come out ahead that's how bad this math sucks how bad this program is operated it's how bad retirement programs look when the federal government runs them it's not a retirement program by the way it's a social program and it's a poorly run social program so the point is you just got to take care of yourself you can't wait on those doofuses to do it they can't add they wouldn't have gotten out of mrs evans sixth grade class she would have put a whooping on them when i was there

for not being able to do math she would have looked at us with her with that eye of hers giving us that evil eye and said you aren't a bright kid are you and if we'd have been doing math the way they do math up there but hey they get away with it and you know why because you and i are so stupid we keep electing them so there you go it's our fault i guess open phones at 888-825-5225 lawrence is with us in waco texas hi lawrence how are you hey dave man I really appreciate you taking my call. Sure. What's up? So, quick question. I am 25.

My wife is 24. We make $60,000 a year. In October, we're going to make $180,000 a year with a $45,000 sign-on bonus. And we're moving to a new city, and we're trying to figure out when to buy a house. And we have $60,000 in student loans right now. What in the world? You're going from $60,000 a year to $180,000 a year? One of you became a doctor or a lawyer, or what happened?

Yes, sir, yes, sir. I'm a lawyer. Okay, and you're just getting out of law school? I'm working. Yes, sir. Okay. So basically, it was your wife's income, and now you're adding yours to it, and that gets us to one. Okay. Wow, that's impressive, man.

Good for you. Ding, ding. 25 freaking years old, $180,000? That rings a bell. Yes, sir. Well done. Well done. I'm blessed. Well done. Well done. Our baby steps say the shortest method to wealth is to be debt-free

and have an emergency fund before you buy a house. And all of the data points that we have working with people who became wealthy did it in that order. They didn't delay. The great news is you're used to living like broke people. Just keep living like broke people and pay the student loan off. Okay, yes, sir. Yeah, you've not even had time to emotionally adjust to your new income, so don't. Okay, yes, sir.

Yeah, clean up those student loans, build your emergency fund, take a year in the new city and do that. Get to know the new city. Get to know your wife better. It's a new marriage, a new adventure of your own, all of these things, and then start saving for your down payment above once you're debt-free and have your emergency fund of three to six months of expenses. Very cool, Lawrence.

Proud of you guys. This is the news, guys. You need to stop and listen. The Fed decided not to raise interest rates. That means you've got a small window of time before rates rise again. Here's the deal. Most people are paying too much interest on their largest expense, their home. So you're freaking crazy if you don't take 10 minutes to call Churchill Mortgage right

now and see if they can save you money before rates rise again. A mortgage through Churchill could save you thousands or better yet, reduce the time until you're debt free. Can you imagine how it would feel to no longer have that payment looming over your head every month? Just go to ChurchillMortgage.com or call 888-LOAN-200. Their team of experts will give you more clarity about your options and more peace knowing you're saving significant money in the long run. Call 888-LOAN-200. That's 888-562-6200 or churchillmortgage.com. Thanks for being with us, America. Jamie is on the line in St. Louis.

Hi, Jamie. Welcome to the Dave Ramsey Show. Thank you for taking my call. I appreciate it. Sure. What's up? Well, I am 30 years old. I'm a single mom.

I live at home with my parents, and I am in Baby Step 2. And I'm trying to decide if I should pause Baby Step 2 to move out and rent a place, or if I should continue to stick it out and pay off more on my debt. What do you make a year? I make $41,000 at my main job, and then I would say an extra $6,000 just in part-time side things. How long have you been back home? I moved out briefly about a year and a half, two years ago, and that was before I had discovered you and made a lot of mistakes.

Okay. So you've only lived away from home for a little while in your 30 years yes okay all right um so how's the relationships and stuff there at the house it's fine it's just a little hard having a child and my parents there it just i feel like we kind of need our own space um i mean it's it's doable but i'm getting to that point where i just feel like i need to get out on my own okay i'm with you let's do it yeah even if you stop your baby step two for just a little while and not permanently stop it but you've got you've got to make enough to do your budget and work your plan when you're out on your own but um there's a lot of cool stuff happens in our psychology when we're out on our

own and there is no shame in mom and dad being a safety net what you don't want them to be is a hammock right and that's um this is probably getting close to that. Yeah. You're probably going past the safety net line over into the hammock line. And that's what you're feeling, I think. Yes, definitely. And so then it starts to affect your dignity as an adult. Yes, I would agree. And so that's what you meant when you said stuff like space and a kid.

How old is your baby? Eight and a half. How old is your baby? Eight and a half. Perfect. Okay. Yeah, I think it'll be good for your child's development, too, to have mom and dad around but not be looking at them as a second set of parents because, you know, there's like three of you parenting this eight-and-a-half-year-old. Right.

And it's probably probably changed the relationship um hey i'm papa dave i love my grandbabies and i love having them around but also like sending them home yeah so i could see that you know it's just it's um it's a good thing for the parents to be the parent kind of thing. And it's tough on the grandparents to, you know, be put in this confused role. And just the proximity does that, even if they're people with excellent psychological boundaries. I mean, if my kids live with me, it'd be harder for me to not intervene and go, look, you little twerp, you need to straighten up, you know, which I would do because that's the kind of dad I was. Instead of, and I wouldn't do that with my grandbabies because that's not my job. My job is Papa Dave.

Right. But if they're in proximity with me 24-7, it would be a lot harder for me, and I'm pretty good with boundaries. So, yeah, all of that to say, I'm probably just telling too much about Dave. But anyway, let's get out of there and get your own self going and even if it slows down things a little bit but still have a plan to work now have you been through financial peace university no i have not i've done um read the total money makeover and then listen to a podcast okay i want you to go through the class as my guest okay and that way you'll have the knowledge to fine-tune all of the details you've been hearing about the budget the debt snowball all of that stuff you'll be able to fine-tune it and the details you've been hearing about, the budget, the debt snowball, all of that stuff. You'll be able to fine-tune it, and you can jump on in the Financial Peace memberships

included in the thing, so you're online with all the other people doing the stuff in the communities, and you can re-listen to the lessons over and over, and all that kind of stuff. So that's, I want you to have all that, because we'll help you, you know, get out there and get moving again. It is going to slow down the math a little bit, but overall, five years from today, I still think it's the right move. And that's how I make decisions is not what feels good today, but what feels good over five years. Hey, thanks for the call. Open phones at 888-825-5225. Jose is with us in San Diego.

Hi, Jose. How are you? I'm doing wonderful. How are you, Dave? Better than I deserve, sir. How can I help? Well, before I ask my question, I just wanted to give you a little bit of background on my situation. So I actually got married on April 1st. I know I'm very excited. And my wife and I are going through some tremendous transitions, not just because with our marriage, but with our jobs as well.

My wife is a Navy social worker who just got out in March. I'm a Navy nurse who will be being discharged, medically discharged, so I'll be a disabled veteran in around September, October timeframe. We have taken down a bunch of our debts, and now what we have is $141,000 in student loans. And my wife is halfway through her federal loan forgiveness program. The problem is that there's a hiring freeze, and so the job that she was supposed to get when she got out of the Navy is not there for her anymore. And so our plan is to save up as much money as we can between now and the end of the

year, our goal is $50,000, and just have it in our savings account and wait until we find out what her job status is going to be, and then decide if we want to put that money towards the student loan or just wait until she gets the job so we can get back on that five years left of the repayment program. Yeah. Have you not read the left of the repayment program. Yeah. Have you not read the articles about the repayment programs not happening? I have, and that is some of my concerns. I also look at the repayment program, especially since it's tax-exempt. That's where there's some benefit. But at the same time, I want my wife and I just to have the freedom.

Yeah. I'm sorry. Maybe you misunderstood me. 20,000 people have made application for the repayment program. Less than 200 have gotten their loans forgiven. It's not happening. The government is not following through on it. They're finding one or two little things you didn't do just perfectly along the way and then you know you've waited 10 years and then people are being extremely

disappointed no i would get about my life of getting this paid off and i wouldn't worry about the i would not live my life trying to figure out a way to keep the federal government happy for a student loan repayment program five years from now right after you just got married now both of you get the jobs that you're supposed to have work like crazy people live on a budget and pay this off as soon as you possibly can that's what i would do i wouldn't sit around wait on the wait on the federal government to come and save the day they're not very good at their job you do what you want to, but there's no way I would do that. Open phones at 888-825-5225. Brianna is with us in Colorado Springs.

Hey, Brianna, how are you? Hi, Dave. Thanks so much for taking my call. Sure. What's up? We just purchased a $4,400 2007 Jetta GLI, and a later uh it went into the repair shop spent three weeks there and we spent 4200 on the repairs you spent 4200 after you paid what for the car 4400 why would you do that uh we we weren't i'm not sure yeah you never You never spend $4,400 or $4,200 on a $4,400 car ever.

Okay. You drive that in the ditch. Yeah. Over the junkyard, and you hand them the keys, and you sell it for $1,000, and you say, I got screwed. Did you not have the car looked at by anybody before you bought it? We did. And the two mechanics that we had look at it said that it was in great condition. Apparently, whatever went wrong, you wouldn't have been able to see it unless you had taken the whole thing apart and looked at it. Okay, so now you have spent $8,000 on this $4,000 car.

So what's your question? Yeah, so now we're $8,600 into this car. And the question is, do we hang on to it and drive it until it, drive it into the ground, or because we're just fed up with it? There's no harm in driving it as long as you're running. Yeah. You're already there now, but there's no saving this. It just is. I mean, drive it a while, see if you can get some use out of it, because if you sell it

for $4,000, you still lost $4,000. Yeah. So you might as well drive it. Yeah, hopefully it'll run. But if it breaks down again at that level, don't fix it. You don't spend $4,000 on a $4,000 car. It's just illogical. I mean, you might spend $1,000 on a $4,000 car, but that'd be about it.

It just doesn't work out. Yeah, you got, what a mess. Ouch. This is the Dave Ramsey Solutions, Ben and Bethany are here. Hey, guys. How are you? Hey, Dave. Thanks for having us.

Welcome. Where are you guys from? Daphne, Alabama. Oh, fun. And all the way up here to do a debt-free scream. Yes, sir. We are. Very cool.

How much have you paid off? $131,000 in three years and three months. Way to go. Thank you. Very good. And your range of income during that time uh 125 000 to 155 000 a year great incomes what do you guys do for a living i'm a physician assistant i'm a flight nurse perfect very good good for you both of you in the medical world yes sir and doing very

very well what kind of debt was the 131 nursing Nursing school? Part of it was nursing school. Mostly PA school. Mostly PA. Yeah, and a car. And a car. And a car. Okay. All right. What happened three years ago?

Well, we were driving to Gainesville, Florida to take a loan out on our car. And a friend of mine who used to be a pastor at our church, he gave me a copy of the CDs for Financial Peace University. And I had had those on the shelf for a while, and I was like, you know what, this would be a good idea to take these with us. It'd be something to listen to. While we go get a car loan. Right, exactly.

Yeah, that makes sense. And so we started listening to it on the way down, and I think it kind of clicked with us that, okay, we have this mountain of student loan debt, and we're about to take a car loan out. We have to do something. And that trip right there was what kind of started it for us. Yeah. And we made that conscious decision to become debt-free and start. Start the process.

Yes, sir. Very cool. Good for you. Well, you did it. That's pretty impressive, $131,000. That's a mic drop. Yes. Yes, sir.

I love it. Very cool. So what do you tell people the secret to getting out of debt is? Well, I would say there's a couple things, but the most important would probably be if you're with a partner to get a plan with your partner and then to work the plan and understand that it's not something that's going to happen overnight. It's a marathon. It's not a sprint.

And so keep being faithful to the plan that you set together. Yeah, that's a big deal. That'll do it right there. That'll dial it in. What about you, Ben? would say it's just being disciplined um daily to to keep your eye on that goal and um and always staying in communication with uh the person you're going through that journey with yeah absolutely very good who were your biggest cheerleaders probably our parents probably yeah yeah okay and i'll say this too like there was several times like during this journey where i was just like

i was just i would text her text bet Bethany and be like, I'm done. I'm, I'm over this. It's like this lifestyle of just, uh, that, that entails, you know, just the journey. I just stick her beans and rice. Yes. Yeah. Tuna. Tuna fish.

You know, and, um, you know, but she would always reel me back in. Bethany was just very, you know, let's, let's stick to our goal. And, um, it it was it was with a lot her a lot of her strength too and i'll also i would just pop in your podcast and listen to millionaire theme hours and uh that was just that's the motivation right there this is the goal we're not only going to get out we're going to get out so that yes so that we're going to live like no one else so that later we can live and give like no one else. That's right.

Very cool. Very cool. And you guys were part, I got a note from one of my guys, you were part of a church-wide movement. Yes, sir. Where your whole church went through FPU, right? Yes, sir. So we attend City Hope Church in Daphne.

Yeah. And this past fall. It's an amazing church. Trey's a great guy. And he is. He is. We love Pastor Trey. But they led the church-wide initiative this past fall,

and we had never actually formally gone through FPU, so we went through FPU, and that just kind of refocused us to, let's stick to this goal, and let's press in, and let's get out of debt faster than our set date. And it was... Put a little gas on the fire. Yes, set date. And it was... Put a little gas on the fire.

Yes, it did. And it was very helpful for us. And we did. We completed about six weeks earlier than what we had intentionally set the date we had set. I like it. It's awesome. I like it. That's how it's supposed to work.

Yes, sir. Very cool. Very cool. Unless something bad happens, most people finish earlier than they think they were going to when they started. Most people do. Not drastically earlier, but generally they turn up the heat as they go along. Their incomes go up as they go along. They turn up the heat on the lifestyle, so it goes down.

Income goes up, and boom. Generally, we see that happening. Like, you're all's income increasing pretty dramatically during that three years. Yes, sir. Yeah, very well done. Good job, guys. We're proud of you. Thank you so much. Yes, sir. Yeah, very well done. Good job, guys. We're proud of you. Thank you so much.

Thank you. We've got a copy of Chris's book for you, Everyday Millionaires, just for you. All right. Sweet. That's the next chapter in your story, for sure. That's where you guys are heading. Thank you. Our congratulations to you.

We're proud of you. Very well done, heroes. Thank you. Thank you so much. Bethany and Ben, Mobile, Alabama area, $131,000 paid off in three years and three months, making $125,000 to $155,000. Count it down. Let's hear a debt-free scream.

Three, two, one. We're debt-free! Love it! Wow! Very well done very well done love it that's as good as it gets right there our question today comes from blinds.com find out for yourself why blinds.com is the number one online retailer of custom window coverings free free samples, free shipping, and with the new promos every month, you'll save even more. Use the promo code Ramsey. Our questions from Ellen in Indiana. Where do medical bills fit into the debt snowball? We've had a tough year, and with financial assistance at our local hospital, we still have $2,400 due.

Thanks to previous year's worth of medical issues, we're also $28,000 in debt on credit cards. So what do we concentrate on first, medical or credit cards or both? Well, Alan, the definition of the debt snowball plan is you list your debts, everything but your home, regardless of interest rate, smallest to largest. You pay minimum payments that you can get by with on everything except the smallest one and you attack it with a vengeance my guess is you have some uber small tiny medical bills out of that 2400 that are driving you crazy there's always a 72 bill to

diagnostic something if you drive near a hospital they always a $72 bill to diagnostic something. If you drive near a hospital, they send you a $72 bill from diagnostic something. So that's usually in the stack, you know, when I'm going through them with people. So you get all your bills out. You do not look at it by category. You look at it by individual bill, and you list all of your bills individually. You pay minimum payments on everything but the little one if there's not payments on it you don't pay a payment on it that's zero until you get to it and you attack the smallest debt first when it is gone you attack the next one down when it's

gone you do it attack the next one down when it's gone you attack the next one down and every time you do that on the one that you had a payment on, you don't have that payment anymore. The snowball rolls over. It picks up more snow. And you'll have this sense of traction. There's a bazillion psychological studies that say people stay engaged with something where they have a sense of progress, a sense of traction.

One of the most high turnover, horrible jobs anyone can have is a job where you cannot tell that what you're doing matters, that there is no traction. There's no sense of what you're doing moving anything. I mean, if you just dig a ditch, and then the next day you were told to fill the ditch up, and the next day you dig a ditch and then the next day you were told to fill the ditch up and the next day you're dig a ditch and the next day you fill it back up and you didn't know why uh it's like what are you people paying me for exercise i don't understand this there's no sense of traction there's no sense of we're getting anywhere look how far we have dug a ditch

no we should keep filling the stupid thing back in and so you need to see the traction of paying off the smallest first folks lots of people struggle with budgeting and get this every dollar our free budgeting app has more than six million users when six million people are on board we know we struck a chord with people who want to get traction like i was just talking about with their money if you haven't tried every dollar sign up today and if you're already an EveryDollar user, you should try EveryDollar Plus, which connects to your bank, for free for two weeks. EveryDollar Plus connects to the bank. Every transaction pops up in the app. You move it, drag it, and drop it right in the budget line.

It's supposed to be in. It's easy as it gets. If you're an EveryDollar user and you're ready to upgrade to EveryDollar Plus, go to EveryDollar.com today, EveryDollar.com. And if you're not an EveryDollar budgeter yet, you can get this two weeks free, EveryDollar.com today. Thank you. Dustin is with us in Fort Myers, Florida. Hi, Dustin. Welcome to the Dave Ramsey Show. Hey, Dave. Nice to be able to talk to you. I just started listening to you, buddy.

I don't know. First of the year. Cool. Good to have you. How can I help? I'm on board pretty good. I'm still trying to get my budget straight and everything. We just started, like I said, and I'm engaged. I'm getting married pretty soon. She's got multiple credit cards. She's pretty good at managing her credit. She's a good borrower, as you'd say. But I'm trying to get her to

get rid of them. Once we get married, I'm really trying to impress her right now. But she kind of wants me to save up the money to take up for the lack of the credit cards before she gets rid of the credit cards. What do you think I should do there? When are you all getting married?

I'm thinking beginning of next year, maybe this year. It just kind of depends on whether we're not doing anything crazy expensive or anything. So you really haven't decided is what you're saying. Okay. All right. Yeah. not doing anything crazy expensive or anything okay so you really haven't decided is what you're saying okay all right yeah it's not like i'm not pushing it too far out pretty much since i started listening to you i kind of was going to but uh i'm thinking about bringing a little closer to probably this year yeah okay some more things um well the thing i, how old are you two? We're both 30. Well, I'm 31. She's 30. Okay.

All right. That's Rachel Cruz's age, my daughter. Okay. And so if my daughter or son-in-law were not married and came to me, you know, and asked me the exact same question, here's exactly what I would tell them. The number one cause of fights in a tell them the number one cause of fights in a marriage and the number one cause of divorce is over money yep and all of the data points all the research tells us that there are four things that you need to be in agreement on before marriage and if you are you have a very high probability of a successful marriage

and every one of these you drop out you lower the probability the most important one is the biggest one that everybody fights about money we need to be in agreement on money we need to be in agreement about kids um like are we having kids how many probably and how are we going to treat them are we going to make them behave or are the inmates going to run the asylum and um parenting style uh so kids number two number three is in-laws every family has crazy in it and how are you going to deal with it as a couple and you've got to decide that ahead of time and you can look across that and well, we know so-and-so is a problem. Well, let's go ahead and talk about how we're going to deal with so-and-so when they try to interfere in our lives.

Because everybody has that somewhere in their family. Some more than others, but everybody's got one at least. The last thing is being in agreement on religion and so if you're in agreement on religion and you're in agreement on how to deal with extended family deal with the in-laws and you're in agreement on kids and you're in agreement on money you have a very high statistical probability of staying married a long time because that those four cover just about everything in life that matters anyway so um you know what i would always instruct anyone to do is also see i'm a practical guy so i study this stuff and go okay how can i stack the deck in my

favor in a world where marriages fall apart every day right and so i'm going to get those things dealt with the other thing i found out is a six month or so engagement length is ideal um getting married six days after you met someone obviously brings problems in most cases but getting married six years later says you can't you don't know whether you're a painter get off the ladder so you know you need to something's wrong there too so that kind of thing is there um the uh there's exceptions but by and large you know a good length of an engagement a healthy length of an engagement uh the other thing another one is if you want to stack it in your favor is in-depth detailed pre-marriage counseling sit down with a pastor or a marriage counselor and pay them and go to four or five sessions where you deal with your childhood and how that's going to affect your family of origin, how that's going to affect how you guys are going to be married, and vice versa.

Can you possibly imagine what my children would have said in the pre-marriage counseling about their family of origin? There was plenty of drama to talk about. So it's good. good you got to get all that stuff out man you got to deal with it up front because you're coming into you know you are marrying her family whether you want to or not uh unless i'm definitely everything we get along on and we get along with the money yeah so all of that all that said you don't get along on the money you're not in agreement on the money you're playing back and forth you've got new information you're starting to get a little bit wired up about it she's been trying to do a typical american crap and that's manage her credit

and stayed in debt and kept the credit cards around as if somehow that's smart uh and she's playing russian roulette with a financial tool, and it's going to get you guys. So does that mean you don't marry her? No, but it means you guys have some work to do on that issue. So if you'll go to pre-marriage counseling, I will include in your pre-marriage counseling the two of you as an engaged couple going through Financial Peace University as my guest. Okay.

And if the two of you go through that class and you still have radical disagreements about money then you need more in pre-marriage counseling before you get married do not marry someone that you have radical disagreements i don't think you have a radical disagreement right now i think you've got partial information she's got partial information and y'all are kind of fumbling around at this you don't have real good strong stands on anything uh and so we'll get you some strong stands because you'll have the stuff to talk about as you go through the class and then you're gonna have to decide okay we're either not doing dave stuff or we're doing dave stuff and to do that together both of you decide we want

nothing to do with this crazy ball-headedheaded man, or we're going to do everything this guy says. And don't do ish. Hang on. Madison will pick up, and I'll pay for you guys to go through and help you guys get your life started right. I wish I could have gone through that class. Sharon and I about killed each other over this stuff. Jeff is in Houston, Texas.

Hey, Jeff, welcome to the Dave Ramsey Show. Hi, Dave. Thank you for taking my call. It's a pleasure to speak with you. Sure. What's up? So, from my previous employer, I was covered under several separate pension plans throughout my career. And for one of those plans, I worked only a short period of time.

Its retirement age is age 55 for that particular plan. I'm turning 55 now. So, the annual benefit is small, so they only offer me a lump sum instead of annual installments. Great. And I know from listening to you that you always recommend rolling lump sum pensions directly into an IRA. Yep. However, the problem I'm having is this pension is not a U.S. qualified pension plan, and therefore I understand I cannot roll it into an IRA. What is it? I don't understand.

Why is it not qualified? Well, it was when I was on a foreign assignment, so I think it was just covered under different regulations. Okay. So, well, just take the taxes on it and get it out then. Okay. So just to give you some background information my wife and i are currently in step three uh we got about six thousand safe we're set three and we

want to get to thirty thousand so would you recommend i take you know take the lump it's about sixty four thousand take the lump um withhold some tax and then should i put some of that in and finish off step three or should I hold it off? Yeah, wherever you are in the baby steps. And then you need to be consistently saving 15% of your income. Do you have kids you need to do anything for college for them?

Yeah, so we're currently cash flowing two kids in college. If it's my money, I'm going to set aside taxes, throw what I need to to the emergency fund to get it where I need, and I'm giving the rest of it to the college fund. Cool. And set your budget up where 15% of your income now starts going into retirement,

your constant household income from this point forward. You're only 55. So you'll likely be saving 15 or 20 more years investing as you keep working and if you find things you enjoy doing and continue your career. So very cool, man. Good job. Love it. Open phones at 888-825-5225.

Thank you, Sacramento, for an absolutely incredible smart parent event last night with our own Anthony O'Neill, Ramsey personality and teen and millennial expert, along with Meg Meeker. A sold-out event there, over 1,000 folks. We appreciate you coming out. It was a wonderful event, and that'll conclude our live event season for the spring. We'll kick back off in September, tell you more about those as we go along. Thanks for being with us.

This is the Dave Ramsey Show. Hey, guys, this is Blake Thompson, senior executive producer of the Dave Ramsey Show. Did you know over 15 million people listen to the Dave Ramsey Show every week? And a lot of those people listen to The Dave Ramsey Show every week? And a lot of those people listen to one of over 600 radio stations across the country. To find a station near you, head to DaveRamsey.com slash show.