The Ramsey Show - App - Should I Refinance My House at 78 Years Old? (Hour 3)

Episode Date: September 11, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studio, this is The Dave Ramsey Show. It's where America's hanging out and having a conversation about life, money, career, relationships, overall health, purpose in your life. You were blessed to be a blessing, and we're blessed to be with you. I'm Ken Coleman, host of The Ken Coleman Show on the Ramsey Network, joined by Chris Hogan, host of The Chris Hogan Show on the Ramsey Network.

And we're sitting in with you this hour, 888-825-5225. 888-825-5225. Of course, we're taking your money questions. Chris Hogan here to help you with that. But then we're going to take your job and career questions. Need the day job. You're one of the 20-plus million people out of work, and you just need to get that day job to help keep yourself afloat

and get yourself going on those baby steps or keep yourself going. Or you are just sick and tired of being miserable on Monday morning, and you want to figure out what that work is that you were created to do. I'm here to help you walk through that as well. So let's get after it. Amber is up in Houston, Texas. Amber, how can we help? Hi, Chris. Hi, Ken. Thank you so much for taking my call. Sure. What's up? Yeah. So at the end of this month, my husband is supposed to be deploying out and I'm a housewife and he's finally on board to getting rid of all of our debt because I've been reading the total money makeover. I've been looking at everything and well, now he's ready to get the ball rolling.

So that's why he actually volunteered for the deployment. So my question is, because I'm a housewife, I'm normally not working. But I started working for the government part-time on a project. And I was wondering, since he's not coming back until about August, should I continue to do some, some like retail work or something else online to get us more income to tackle our debt. Wow. Amber, first of all, I love that you guys are seeing the things. You're seeing the pieces of the puzzle, right? How much debt do you all have how much debt do we have yes ma'am okay so um let's see here so for our credit cards it's about i'm rounding up that's fine credit cards is about 17 000 okay our car loans we have two car That's about 27.

And he has his student loans. That's about 66. And he's continuing on with school. Okay. And with the GI Bill, they should be able to pay all of that off. Okay. So here's the answer to your question. Number one, I appreciate the service of your husband as well as you.

Freedom is not free, so I appreciate the heroes, the men and women in our military. But yeah, how you would continue on this is you all listing out these debts, smallest to biggest, and going, hey, this is how we're going to attack it using the debt snowball. And so as income is coming in, you're making minimum payments on everything except for the smallest one. You're throwing everything but the kitchen sink at it. And when it's gone, you move down, so on and so forth. Now, here's my question. Which car are you selling? Okay.

Chris, you put her on the spot. I know, Amber. Listen, if your husband's deployed and it's just you there, why on earth would we keep two car loans? Okay. Right. And I was thinking the exact same thing. And that is also because I didn't know much about cars when we were getting the vehicles. Right.

So I just kind of, whatever he went for, I kind of just went along with it. Okay, gotcha. And I didn't know that one of them had a salvage title. Ah. So. Okay. Right. And we've been having problems with that one.

Yeah, and that one may not be the one to try to sell. That one's probably going to be a headache and heartache. So, looking at the other one, right, do you all have any children? No, we do not. Okay. Amber, do you see kids in your future at any point in time? As of right at this moment, no, but yes, in the future. In the future, okay.

I'm asking that's all the more reason for you to get intentional, take on some type of job, throw the extra money at the debt. Let's get it out of your life. Your husband's going to have hazard pay. He's going to have extra money coming in. You guys have an opportunity to really make some progress here toward the debt talk with him get on the same page and as you all are communicating via phone call or email you can update him on how things are going but you've got a great opportunity to get unified and solidified on the direction you're going yeah that's good yeah they'll get there and with that gi bill that's going to be a massive relief it's a huge relief but but you know

looking at this we've got to understand we tend to live in this and society we want this and that no i think it's more about or you get to do this or you can continue to do that and i think it's about changing our mindset as well as our effort we can chase down some results that's right colson is up next in steubenville ohio col Colson, how can we help? All right. How are you guys doing? We're doing well. What's going on today? Well, I'm calling in my job. I work construction, so I often have a layoff throughout the year. Yeah. And I'm just getting started on this program and I'm wondering if it is okay to have more than $1,000 in my emergency fund. Gotcha. Colson, that's awesome. How'd you hear about the plan, the Financial Peace University? I actually heard it from somebody talking on

the radio. Really? That's fantastic. So how much debt do you have, my friend? I have about $30,000 between $20,000 in student loans and $10,000 in our camper. Okay, gotcha. And what's your income right now? Between, I'd say on average, $50,000 to $80,000. Okay. Depending on, you know, years and years. Now tell me this. As we sit in September, when are layoffs likely to happen for you

uh generally it is winter time okay now i'm on a job currently that i should be all right through the winter okay okay and i'm asking that because that winter in ohio i mean that that can start at in november you know uh right and so you that solidified, but here's the mindset around it, my friend. People getting $1,000 set aside, that's just to break the habit of debt, okay? Because people are used to credit cards and just not having anything. So if a car breaks down, truck breaks down,

they have nothing to reach for except debt. So the mindset is to get that thousand in place, but let's attack the debt with every other waking dollar that you have. And so that's the theory. Typically, what I tell you is, as you get out of debt, as you attack this $30,000, because you got a good income, and I think you're getting intentional, you could get some side

hustles and do some stuff even in the winter. But once you attack this debt, then I would tell you to focus on getting a six-month emergency fund in place because of the seasonal work. How much is that camper worth, do you think? It's probably right around $10,000. I traveled for work before, and I actually just sold my truck when I heard you guys. Did you really?

Yeah, $47,000 out of debt. Hey, that's a sacrifice, big guy. I'm proud of you, Colson. I know you're going to get this out of your life in less than a year. That's how confident I am. Chris, I'd sell the camper. I knew you were going there. Why not?

Sell the camper. Colson did, too. One other thing, Colson. You know, you need to be working in the offseason. You make really good money, but you need to find a couple of jobs that equal or come close to what you make in your construction job in that off-season, that seasonal downtime. And that way you're not going to miss a beat.

And Chris is right. You're going to nail that debt pretty quickly and then just walk Dave's baby steps out. They work in succession. There's a reason why they go 1, 2, 3, 4, 5, 6, and 7. Follow the plan. This is The Dave Ramsey Show. Families all over the country are discovering a faith-based and budget-friendly way of meeting health care costs,

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And if you've been struggling with money, you need cheerleaders in your life who are going to support you and motivate you on this journey. There's no better way to get that encouragement than by joining a virtual Financial Peace University class. You're going to learn Dave's proven money plan and go through every lesson with folks that are walking a very similar journey. And it's all online. Financial Peace University is a part of Ramsey Plus,

which means you get our number one money course, plus the premium features of our budgeting app, EveryDollar, and our new Baby Steps tracker app. And today, Chris, folks, can start the free trial to everything in Ramsey Plus, including the Financial Peace University class. You don't have to figure this out on your own, folks. Get plugged into a virtual FPU class and get the support you need to join and start your free trial of Ramsey Plus. Text JOIN, that's the word JOIN, text JOIN to 33789, that's 33789.

Yeah, absolutely. And Ken, I want to take it a step further. With Ramsey Plus, not only do you have the EveryDollar and the Financial Peace University and the apps and the trackers, but you also get access to a financial coach. So you'll have an opportunity to ask a question just like you would work with a personal trainer. To me, this is huge. It's a great opportunity. For that unique situation, you'll be able to reach out and ask someone as a member inside of Ramsey Plus. So, again, as Ken said, text the word JOIN to 33789. Make it happen today. 888-825-5225 is the number to jump in on the conversation.

Jennifer's up next in Mesa, Arizona. Jennifer, how can we help? Hi, Ken. Hi, Chris. Thank you for taking my call. Sure. So I'll kind of give you the highlights. I'm on disability.

I receive money from long-term disability through working at the state of Arizona and then I get the disability social security. I'm 56 years old. I have an income of approximately $3,700 per month. Mm-hmm. I have a health insurance, which is $550 a month, which is a huge part of my income goes towards that. Also, my house payment is pretty high for what I'm having as income. It's $1,445. Okay. And so my question is, how do I carve out any money to begin the baby steps?

I recently read The Total Money Makeover, and I want to save the $1,000, but I'm really struggling. I don't have anything to sell, and I can't work. I really don't see any. I understand. What else do you owe on? I owe about $25,000 in credit cards, $5,000 student loan, and $3,500 on my car. Okay. What were you making before you were on disability? What was your household income?

$62,000. Okay. And so now you've had this reduction. How long, what is the projection before you're able to get back to work? Have they given you any kind of diagnosis or time frame? No, I'm not expected to be able to go back to work. And I'll be on the insurance for long-term disability until I'm 62. Okay.

And then I'll retire. Okay. How much do you have saved up for retirement? That's a good question. I'm not exactly sure. Okay. Well, the situation is this. I mean, obviously, you know the income that's coming in, but we also know the habits that have gotten you to where you are, right?

$25,000 in credit card debt, that's the living beyond means or looking to medicate in some way with stuff. What you can't do is continue more of that, okay? That's first and foremost. But until income can go up, you know, you're going to be at a stalemate. I mean, are you making minimum payments as of now on all of this? Unfortunately, it all went to collections. Okay. Ever since you've been on long-term disability or here recently?

Recently. Okay. Why is that? Because during the time I went from short-term disability and long-term and all the finance process, I had gaps of times where I didn't have money coming in. Okay, got you. And unfortunately, I pulled from my short-term or my, what do you call it, supplemental. Okay.

Jennifer, let me ask you this. Are you able to work at all? No. So you can't work from home? You can't do work from home? No, I'm not allowed to. If I had anything showing as having taxes taken out, you know, they would see that and then I would no longer receive. Okay. Jennifer me let me try to cut through it here i understand on the insurance side for long-term disability you're only you're not allowed to work you can only get up to x amount we're asking you physically can you

work um no not up to the level i was working before. Okay. No. All right. What level could you get to? Um, I really can't, I can't function very well. I can't, I can't. Is this physically, physically and mentally or both? It's both. Physically. Okay. So how much is the house worth, Jennifer?

Actually, we've had a lot of houses selling in the neighborhood, and my equity has gone up by $100,000. So how much is it worth? If you were to put it on the market today, what would it be? $320,000. How much do you owe on it? $205,000. All right. We're going to have to look at that, Chris.

Yeah. Do you have friends and family that you could live with? I mean, are you alone in Arizona, or you've got a community around you that knows your situation? My girls live here. I have two girls. They're in their 30s. Okay. Do they live on their own? Yes.

Well, they have family, husband and kids. Well, but I think you have to start to look at your situation and go, I can get out of this. That's really where this call started. How do I get out of this? Well, let me tell you what the first thing you do is sell the house. Yeah, you're going to have to let go of some stuff. And live with somebody. Yeah.

And here's the other thing. With the debts that you have that are in collections, if you can't pay, you can pay attention is what I tell people. And so I want you to call all of them, communicate. Because what's going to happen is they're going to get sold to a collection company and they're going to start to call you with such a fury that you're going to feel like a hostage in your own home. So let's reach out, communicate with them about your situation and what's going on so they know what's happening. They'll document the account. And so, you know, you're going to have to be proactive on your side.

Now, I'm going to also say something else, Jennifer. You're going to have to make a decision about what it is you want. And you're going to have to make some sacrifices. And I'm not saying this is you, but I've talked to some people that have been on long-term disability. And they psychologically become unable to work because they know what money's coming in. And you got to, you can, and I'm not saying people that can't work. I'm saying people that are choosing to do that. And what I want you to do is kind of realize, okay, I understand what the diagnosis may

have said at that point in time, but how are you feeling? What can you push forward to? Because you and I both know you can bring in more than $3,700 in a month working, right? That's pushing forward. So don't be comfortable where you are. I want you to strive. And as Ken said, selling the home may become the option that you have to clean up the mess. I think it is, Chris.

I think it pays off her debt. Now, this is incumbent on her. I know I'm not saying she's got any pride, but if you do, Jennifer, it's ask, will you help me? Short term. Short term. Can I live with you for this amount of time so that I can you help me? Yes. Short term. Short term. Can I live with you for this amount of time so that I can get out of this situation? You show them the numbers. I just made $120 on my house.

I paid off the debt. Here's where I am. I got my disability coming in. But you reduce your cost and eliminate your debt. I would really do everything you can to get those girls or somebody, friends and family, to let you live with them. Sell this house. Get out of this thing. And clear skies are ahead.

Don't move, folks. More of your calls. This is The Dave Ramsey Show, and sitting in with you this hour, Ken Coleman and Chris Hogan. And Chris and I are absolutely, completely fired up to take your call. 888-825-5225. We've had a blast today. 888-825-5225 is the number.

Chris will take your money questions. I'll take your career, work questions. We'll both team up on those life and relationship questions. We're having a blast, and it's always fun to help people turn that light bulb on as to what it is they need to do next, and that's what we're going to do. We're going to equip and encourage you, so come on, 888-825-5225. Let's go to Colorado Springs next. Doug is there. Doug, how can we help? Hey, I've got a question about should i refinance the current rates uh versus some other things i'd like to ask a more generic question however i bought a house about 15 uh months ago 325 paid it down to 275 to start uh oh about uh 268 on it currently. Interest rate $475.

And I keep seeing all these rates being publicized at $242 for a 15-year. What would you advise? Okay, Doug, I appreciate you calling in, buddy. What is your household income right now? $70,000. Okay. And so right now, when you refinanced it, did you get it on a 15 or a 30 year? I got it on a 30.

Okay. You got a 30 and it's at four and three quarters? Yes. Okay. What other debt do you have outside of the home? Well, not really. I did take a lease on a car back in January of this year. And, you know, I'm in pretty good shape between our retirement, my income.

I still work, actually, part-time. Okay, all right. And have rental income and some other stuff that kind of keeps me going. Is all that income part of the 70, or is that on top of? Oh, that's part of the 70. Okay. Well, I think you could definitely refinance i um the key is going to be you know looking at this uh because there are rates you

know now the two three and two four some of that's advertised at contract rates when you want to pay attention to apr the annual percentage rate that's all the stuff involved but two and a half is realistic uh which again you can increase your rate, decrease your rate by a percent or more. It's a smart move. But I'd say, you know, overall, I want you to get plugged into Ramsey Plus, my friend, where you start to look at this. I want you to realize that's not your friend. I understand. But I think you could definitely save yourself some money with that refinance.

With your rental property, do you owe on those, or are they free and clear? No, they're free and clear. That's good. Raised in $36,000 a year. Good. And we have, of course, we've got Social Security built into that. Yes, sir. And I've got residual income, which is part of that uh 70 yeah i don't

have a credit card debt okay i've got probably close to 50 000 and three checking accounts and part of that that doesn't make good sense i know but part of that is because my wife is in memory care with hospice. Ah, okay, okay. Doug, is your long-term goal to hold on to this house? No, I figure I'm in it for probably five years, maybe health-wise. Need-wise, it's bigger than I need. Yes, sir. I'm in an area where I expect the return will be nice on it. Yes, sir. Yeah.

No, I like the idea. I think you reducing that rate, which you can, your intention to sell in about four to five years, it's going to put you in a better position. You'll recoup the closing costs. Check into it, my friend. And I appreciate you calling. And, Doug, I want to encourage you. Go to DaveRamsey.com and click on SmartVestor. I want you to sit down with an investment professional to begin to look at your overall portfolio.

Just overall, so you're looking and you're able to bounce some ideas. You sound like a sharp man, but it's always good to get that second or third opinion just to find out. I've found small tweaks can lead to big gains. Yeah, and Doug, we know you're going through a tough time with your wife. Yeah. And I think you're really, really smart with the cash on hand. That's really smart.

And as Chris is saying, follow Dave's baby steps because once that situation hopefully gets resolved and then you're going to move forward and decide what to do with some of that cash. And I love the refi. Make sure it's 15 years, though. Yeah, absolutely. Which you said, but we want to stress that

because that's a much better move. Let's go to Jordan next who is on the line in Houston, Texas. Jordan, how can we help? I'm doing well. How are you? We're doing well. My question is mainly regarding a car I

made a couple years ago when I was a little bit younger, a lot more stupid. I purchased a new car expecting a young daughter and I bought a $75,000 car. Yeah, a lot of car made so far, but got about $68,000. Jordan, you are going in and out, my friend. Yeah, let's try that one more time.

Do me a favor. Try to hold still. I apologize. Okay, try it friend. Yeah, let's try that one more time. Do me a favor. Try to hold still. I apologize. Okay, try it again. Yeah, can you hear me better now? Yeah, how much do you owe on the car? Probably around $68,000. What is this thing?

It's a Platinum Ford Expedition. I tell my wife every day that I made a mistake getting it. How much is the car worth? I just did it before calling in. It's-oh and what's the payment on this thing what's the mortgage payment on this yeah really seriously how much it equals my mortgage it's 1200 so i got 1200 on mortgage car oh my goodness oh my. Jordan, how much do you – what's your household income? I'm solo income right now, $85,000. This was prior to finding you guys. I had a friend on a work project that actually recommended me looking into Dave Ramsey and all the financial tools and everything.

All right, well, here's the good news. Chris knows exactly what you need to do, but I want you to brace for a second. I want you to brace for what's about to come your way.ris take it away yeah jordan listen buddy you're probably you say you owe 68 right it's worth 52 my goodness you know you you've called you've checked on the value i'd call and check in on the payoff you've had this vehicle how long um about a year and a half okay gosh okay i mean my buddy here's the deal you're gonna have to try to sell that thing for as much as you can i'd get the payoff quote from all the 30-day payoff from your your your loan holder but you're gonna have to go check with a credit union or a bank for a short-term loan to bridge the gap between the two.

For sure. And by short-term, I mean something that's 18 to 24 months. But you can't let this thing hang around, man. I hope you've learned, you know. Oh, absolutely. But you remember how easy, Jordan, they made the process for you to sign the papers were? Oh, yeah, for sure. It's just so easy.

And you go, this is almost a $100,000 loan, and they make it just three or four signatures. But now what you're going to do is put some time in, buddy. I mean, I'm serious. You're going to have to reach out to the bank and be extremely intentional. Don't let this thing hang around, because here's the issue with trucks and things like that. As soon as they start to hit that two-year mark, it's another kind of drastic drop in value. So if I'm you, I'm going to hustle over the next 30 days to get this thing out of your life. I just want to throw a cautionary tale and maybe a testimony at people real quick. You're listening to Jordan's story here.

And the good news, Jordan, you can get out of this. And Chris gave you a wonderful plan on how you're going to do it. But this is the enticing, you know, you've got a kid coming. We need a really nice car for the kid. And all these emotions are involved. And I just want to point out that the Coleman 5, we're on our second Suburban over 200,000 miles. And it's a nice Suburban. It looks really nice.

You'd never know it had that many miles on it. But those Suburbans will run and run and run and run. I'm not endorsing the car. I'm just simply saying if you take care of it, you're going to have some big expenditures to fix it every once in a while. But in the end, you don't need a brand new car that's costing as much as your house payment for one kid or five kids. No.

They don't care. They're going to rip it apart anyway. And Cheerios and fries you'll find all over the place. I'm waiting until the kids are out of the house before I get a decent car. I'm telling you that right now. Hey, more of the Dave Ramsey Show is coming right up. Don't move. Welcome to the Welcome back to The Dave Ramsey Show. I'm Ken Coleman, joined by Chris Hogan this hour.

Our scripture of the day is Deuteronomy 28.7. The Lord will cause your enemies who rise against you to be defeated before you. They shall come out against you one way and flee before you seven ways. Our quote from the great Maya Angelou. You may encounter many defeats, but you must not be defeated. In fact, it may be necessary to encounter the defeats so you can know who you are,

what you can rise from, and how you can still come out of it. Chris Hogan, always fun to be with you. We're taking folks' calls, 888-825-5225. Let's go to Dominique, who joins us in San Diego, California. Dominique, how can we help? Hi. So when I first got orders here, I'm in the military. And instead of renting out because rent here is extremely expensive, me and my husband decided to buy a house. Well, now I have gotten orders back to the other side of the country to Virginia. And we are wondering if it's smart for us to just cut our losses and sell the house or if we should try to rent it out in some way.

My husband is unfortunately not going to be able to join me in Virginia. He's going to go back home in New York, and his family has offered to sell the property they have up there to him at a rate that we can do. We're just wondering if it's smart for us to use the house to do it. All right, Dominique. Well, first and foremost, thank you all for your service. This house that is in California, how much do you owe on it? We owe about $360,000 on it still. And what's it worth?

Probably about $480,000. Okay. Here's the deal. I don't like the idea of you guys being long-distance landlords, okay? So I would definitely sell the house that's in California, all right? The other side of this is looking, the buying a home in New York. Are you eventually going to go to New York? Yes.

Eventually. But in how long? Well, it depends on my career. I'm planning on staying in until I retire. So I have about another eight years. Okay. So is your husband in the military as well? He wasn't before.

Okay. See, I want you all to slow down. You guys are running out and you're buying, buying, buying. I want y'all to plan, plan, plan. Meaning, so the house in California, I'm definitely selling that bad boy. Okay. And so for you, as you live, your military is paying your housing, right? Yes. If you live, your military's paying your housing, right? Yes.

If you live on base. Okay, so get this mindset of, okay, what else do you all owe on outside of this property? I have a car, and then there's about $10,000 in credit cards. Okay, no student loan debt at all? No. Okay, so I would sell the house. Now, this thing in New York, is your husband going to be working in New York? No. Okay. So I definitely, yeah, I would sell the house. Now, this thing in New York, is your husband going to be working in New York?

Yes. Okay. So what are they willing to sell him a home for? So they say. They're willing to sell him the home for $300. Okay. And what do you think that home is worth? So the home that's currently

on the property is definitely not worth $300. Okay. You would have to build the home on there, and we're hoping that the home would be valued at around $600 or $700. Okay. So it's just land? It's not just – there's a house on there at the moment. But you're going to knock that thing down? Yes. No. No. First of of all can i go back a second i i so dominique i can't help myself i gotta dig into this a little bit uh so if i'm hearing you correctly you're going to be in virginia for eight

years and your husband's going to come down just every once in a while and see you and he's going to be working and living full-time in new y Well, so I don't know about eight years because it's just the military. So it depends on where they send me or I choose after that. But why isn't he going with you? Why can't he go with you? Because we have two kids and I grew up in the military and I don't want to move them around like that. And since we're eventually going to end up in New York, I am willing to sacrifice them going to New York where we're eventually going to be living because I'm about to go on deployment anyways. Oh, I see.

So I don't want him to be alone in a state without me. I'm with you. All right. That makes more sense. But I got to tell you something. You guys don't need to rush into buying a house and especially a house that is essentially i don't want to call it a shack but you're going to tear it down and build something you're not there financially what i love about what chris is telling you is by selling the house

in san diego guess what you get debt free how much is that car payment excuse me how much do you owe on the car about 15 okay so let's take the, I think you said it was $120,000, so you take commission on there. So let's say that you clear, for round numbers, let's say you clear $100,000, Dominique. So you pay off the debt. I think you said it's $10,000 in credit cards. Is that right? Yep. Yes.

Plus the car. $15,000. There you go. So let's just say you got $75,000. Well, that gets you and your kids and your husband started in New York. They need to rent. He's working. Or buy something really cheap there near the family.

Don't go for the family plot. You're not there yet financially. Do that when you are ready to come back to New York and we're going to get settled. That's the family homestead. That's what I think you should do because now you're going to be in great financial situation, and your husband and kids are going to get stable there in New York. I just don't like the idea of you buying another house. Yeah, I think you guys slowing down a little bit and putting that money aside and still saving to buy eventually.

But, again, cleaning up the mess but going, hey, we're not going backwards with another car loan. We're not going backwards. The credit cards, we're not going backwards with another car loan. We're not going backwards. The credit cards were cutting them up, shutting them down. And, and Dominique, you're starting to change your thinking, right?

You don't buy every place you go, but again, you, you and your husband talking about this, and I want to applaud you. And I can understand you not wanting your kids to have that move around lifestyle that you had, but,

but also your deployment, you know, make sure that they're seeing you and spending time with you because that's going to be tough all the way around yeah this is not such an easy situation no but no but you know the mindset is again we want to make two-year decisions everybody what i mean by that is you want to make a decision that you look back on in in two years you go, boy, that was tough and it was rough, but I'm glad I made that decision. It puts you on a trajectory. All right, let's go to John in Sterling, Colorado. John, how can we help? Hey, yeah, I just have a quick question for you.

My employer puts in 15% into like a traditional 401k automatically. Really? I was just curious. I was curious if, so I maxed out my 401k Roth for the year or whatever. I didn't know if that was a good decision or if just that 15% would be good enough. John, what type of company do you work for? I'm a lineman out in Sterling, Colorado. Okay.

And they put in 15% in retirement for you every year? Yeah. You have to stay there for one year, and then they start putting 15%. 15%. Okay. Well, here's the deal, buddy. I'm going to tell you something. I still want you contributing 15%.

Okay? Okay. Because here's the deal, John. That company could decide that they're going to stop doing the 15, and if you're only banking on their 15, you're going to have a problem. So I want you to look at this like a dollar-for-dollar match, literally up to 15%, which is so rare. I've never heard of a company going this high. So you get in the habit of doing 15%. If the company is doing 15%, listen to me, you're going to have a whole lot of money one day.

Okay? Would you do, on my side, would you do Roth? Absolutely. I would definitely do the Roth. Here's the deal. The Roth is after tax dollars, so you're going to have tax-free growth. You're not going to have to deal with Uncle Sam anymore. But what the employer is contributing and matching you, quote-unquote, is going to be pre-tax.

So that's going to be like traditional. So their part, you're going to have to pay taxes on when you start withdrawing that money at 59.5. This is unheard of, Ken. Again, I've never heard of a company going 15%. I've heard of matches of of of up to nine and ten but never 15 that's huge it is but people also need to understand there is a limit to how much that you can that a company can put into your 401k you get to a certain point so it's the 19 000 still is that correct but you but you have the percentage that you get focused but

you're right there is the dollar cap on what it'll get to, but that's okay. You stay focused. You stay focused on that. And I think it's at $19,500. They keep flipping it around and changing stuff. But the bottom line is you have an opportunity to put in 2020, it's $19,500. And if you're over $50,000, then you have an opportunity to do some additional catch up as well. So save people and invest your money. It'll grow. That's why it's important to do what Chris said. Put your own 15% in. Anything that you get from your company, that's bonus.

Icing on the cake. I love it. Hey, I want to thank my pal, my colleague, my good friend, Chris Hogan, for hanging out with me this hour. I want to thank our producer, Zach Bennett. I want to thank our associate producer, Kelly Daniel, and you, America. Thank you so much for joining us. This is The Dave Ramsey Show.

Hey, it's Kelly, associate producer and phone screener for The Dave Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit DaveRamsey.com slash show and register. We would love for you to come to Nashville and tell Dave your story.