The Ramsey Show - App - This Is What Happens When the Government Tries To “Help” (Hour 3)

Episode Date: March 24, 2023

Ken Coleman & Rachel Cruze answer your questions and discuss: How the Fed is screwing up the economy, "I moved in with my boyfriend and then we broke up", "My wife and I disagree about taking a trip for work", Investing vs. paying off the house. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Take our FREE 3 minute assessment: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studio, this is The Ramsey Show. It's where we help you win in your life, specifically your money. And when we talk about your money, that means we're talking about your relationships and your work because they're all connected. So we're here to give you practical solutions that'll give you a hope so that you can step out and live the life that you're supposed to live. 888-825-5225

is the phone number if you want to jump in with your question. 888-825-5225. Rachel Cruz joins me this hour and we are here for you. And let's talk about probably the biggest money issue in the nation. It's the number one headline. It is inflation as a result of that big bumper sticker issue, Rachel, which is inflation. We're looking at interest rates. It has been the ongoing narrative for some time as the Federal Reserve, you may hear it referred to as the Fed, and Jerome Powell, I call him our feckless Fed chair. More on that in a moment. But the Fed, during the pandemic, they flooded a lot of liquid cash into the market because of what happened in 2020 with the uncertainty of the pandemic, people being laid off in mass, companies worried, are we going to be able to stay open?

And you heard of the PPP loans, the federal government, the Fed putting money out into the marketplace. And then we saw on the backside of that in 2021, Rachel, an unbelievable boom in the job market. Four million jobs were created coming out of the pandemic. It was almost a surreal reaction to our businesses failing. Well, the government came in, gave them cash, forgave the loans. And so companies that were worried about dying were flush with cash. Rachel, based on your money expertise, what do people do when they come into a lot of money? What's the number one temptation or reaction to do with the money?

Is it to save it? I'm going to say to spend it. Oh, Kenneth. Thank you. Thank you very much for the Kenneth reference. Well, companies did that, and they did it in the form of hiring. And so we are in an unprecedented job market with a 3.4% unemployment rate. We have more jobs available than there are people who are unemployed, almost two to one. Now I'm just setting the context for

why are we still in an inflationary period? The number one reason that we're still in inflation is because over the last two and a half, three years, the great resignation where people were leaving companies and getting paid a whole lot more. It took the cost of hiring talent up that includes hourly and salary. And as a result, your groceries, your combo meals, pretty much every area of life, the clothing you bought for $20 is now 25. We understand that. So I'm setting the context for this, Rachel, because I'm about to reveal something that I can't believe I'm about to say. I can't even believe I'm setting the context for this, Rachel, because I'm about to reveal something that I can't believe I'm about to say. I can't even believe I'm saying it publicly. I didn't think I'd say it privately. But Senator Elizabeth Warren, I don't agree with her on just about anything.

But she recently had Jerome Powell in, 1st of March, at a congressional hearing, and she put him to the test. Now, Jerome Powell's the Fed chair. He's the guy that kind of is the front man for the Federal Reserve, and they're deciding, are we going to continue to raise interest rates? Now, before I let you see this clip, Rachel. And they're raising interest rates. Oh, they're raising. Trying to stop. To stop inflation. To stop inflation, to stop having people in the market buying stuff, right?

To slow inflation. They're trying to counter it, but. You got it. And so their weapon is I'm going to raise rates. Well, that has caused a lot of pain. We all know that, but inflation hasn't gone down. Now I want to show you a clip and then I'm going to walk you through and some of you are going, why are you going through this? Because at the end of this, I'm going to reveal what this monetary policy actually means for you in your day-to-day life and what you can do about it. But we've got to see this.

This is unbelievable. So she's questioning him, and she's going, you are openly saying that raising the interest rates is going to drive the unemployment number up. She puts him to the test. Watch this one-minute confrontation. If you continue raising interest rates as you plan, unemployment will be 4.6% by the end of the year, and that would be about 2 million people. If you could speak directly to

the 2 million who you're planning to get fired over the next year, what would you say to them? Inflation is extremely high, and it's hurting the working people of this country badly, all of them, not just 2 million of them. And we are taking the only measures we have to bring inflation down. And putting 2 million people out of work is just part of the cost, and they just have to bear it? Will working people be better off if we just walk away from our jobs and inflation remains 5%, 6%? There have been 12 times that we've seen a one-point increase in the unemployment rate in a year. How many times did the economy fail to fall into a recession after doing that out of 12 times?

I think the number is zero. I think the number is zero. That's exactly right. Ouch. Elizabeth Warren bringing the heat. And this is where I'm shocked, but I actually agree with her. This is a situation where Jerome Powell, folks, has gone on record many times. You can get on the Google if you think I'm making this up. And he has said it is an unfortunate pain point that we're going to have to get to to see unemployment go up. And his idea is if

unemployment goes up because we are raising the cost of borrowing, raising the cost of doing business, that companies will lay people off. Now we've seen big tech do that and he's flirting with a recession because he's hoping that companies will lay people off. What happens then is the job demand goes down in his mind. And so now people aren't having to pay as much because he knows that wage pressures, Rachel, are causing inflation to be stubborn. Here's the challenge with what he said. It's not the only tool he has. The Fed screwed this up. The Fed flushed too much money into the economy and got us to this point because

they were worried about the pandemic. This is what happens when the federal government and the federal bank gets involved in the economy. He then says, ironically, what would you have us do, Senator Warren? Walk away from our jobs? Yes, actually. I would like you, feckless Fed chair pal, to walk away and just let the economy figure out. Do its thing. Here's why. Yes, inflation has made the household budget much higher. However, to force 2 million people or maybe more, because here's the deal.

These are projections. We're at 3.4% unemployment right now. Historic lows. If it gets pushed, and there are quotes where he said, Rachel, it may 3.4% unemployment right now, historic lows. If it gets pushed, and there are quotes where he said, Rachel, it may get to 6% unemployment, and that may be what it takes. So you're going to drive millions of people to unemployment, and you think that's going to fix it. But here's the issue. We've got five to six million jobs available right now. I know, I'm paying it off. We've got five to six million jobs available right now in this economy.

So if you drive an unemployment, they're going to go get another job and we're not going to fix it. And oh, by the way, let's step back. Rachel has the interest rate increase done anything to unemployment so far? No, it has not. He's been steadily raising the rates and unemployment is still low. It's still low because there's so many jobs. So why does this matter to you folks who come to a money show? Because we have debt-free screamers every day on this show, every week, every month, and inflation isn't affecting them because they're not looking to DC and the Fed and interest rates. They're taking control of their money. So these headlines, and while it is painful, you can control your money no matter how expensive groceries are. You can actually control your future through your spending and your saving in Ramsey Solutions.

And the Ramsey Show is here to help you do it. We don't care what Jerome Powell does at the end of the day because he doesn't have a freaking clue. And we are in control of our money. We got you. Don't worry about the headlines. This is The Ramsey Show. Hey, you guys. Health insurance costs are only moving one way,

and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you, try a biblically-based alternative to health insurance, Christian Healthcare Ministries. CHM is a health cost-sharing ministry that's helped hundreds of thousands of families like yours

take care of over $11 billion in medical bills since 1981. And CHM has also helped them stay true to their values and avoid miles of red tape. And CHM support goes far beyond meeting financial needs. They'll also help meet spiritual needs. Members become part of a family who will pray with them and for them when they experience a medical event. So listen, y'all, there's no better way to take care of healthcare costs. CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budget. That's chministries.org slash budget. Welcome back to The Ramsey Show. I'm Ken Coleman. I'm joined by my colleague, Rachel Cruz.

So excited to have you with us. 888-825-5225 is the number if you've got a money question, a work question related to getting more money or just getting out of a nasty situation. Happy to take those calls as well. If you are enjoying the show, we'd love for you to consider subscribing, following us, leaving a review, and sharing with a friend. If this information is helping you, we'd love to help as many people as possible get some

hope-filled, practical advice so they can move forward in their life. So thank you so very much for that. Let's go to Ashland, Wisconsin. Julie's there. Julie, how can we help? Hi. Thanks for taking my call. I really enjoy your show.

I have a housing question. Okay. Well, I think it's probably a national thing, and pretty much everywhere in northern Wisconsin, there's a very low inventory of any homes. Anyway, I did have a house at one point that I had sold about two and a half years ago and had moved in with my boyfriend at the time, who's now my ex. So that's that story. Now I'm renting a very small apartment. It was all I could find. And I don't know what makes

sense at my age because I'll probably work until Social Security, or excuse me, until Medicare age, so that's four years off for me. And I just don't know what makes the most sense, if I should just keep on trying to rent and go that route instead of purchasing a home in this climate or in this market. Sure. Okay, Julie, when or how much debt? Do you have any consumer debt? No. What I accumulate on credit cards is pretty much paid off every month. Okay, but no personal loans, no car loans? Nope. Okay. Car is paid off.

And how much do you have in retirement? meant? I have about $400,000 in a 401k and $344,000 of that is pre-tax and $56,000 is Roth right now. And I also have pension that's valued at about $400,000. At about $400,000, okay. Do you have any liquid cash right now? Yes, I have the proceeds from a house and a little bit of combined savings, which is around $70,000. Around $70,000. Okay. And just how much is a house in your area going for? Even a small one or even a condo, a townhome? Yeah, the problem there really isn't a condo or town home market. It's just there's a shortage in general. But, you know, probably a mediocre house, maybe 150 at the bottom, which is you're not going to get much. You got to get closer to like 180 or maybe higher to get something that's halfway decent.'s there yeah so okay well

here's my thing is owning a home is a great part of your financial overall plan because when it's paid off it's going to have all that equity and it's going to be part of your net worth and so you kind of can just start to build on that and so i think there would be, I would encourage you to look towards that soon. But like you said, with your age and where you're at, I don't want you having a massive mortgage payment going into retirement either. And so. And how much do you make a year? 82. 82.

Okay. So. Yeah. 82. Okay. So yeah, with this, I mean, if you want to slowly start saving and then maybe pull the trigger in five, six years, if you have the cash saved up and looking to see, okay, yeah, I can put a big down payment or half of this home. Again, I just don't want you getting to the point where you want to stop working, but you have to keep working just to fund a mortgage payment. But you're going to have to be funding rent anyway. So like you're going to have to live somewhere.

And exactly. Yep. So it would be, you know, to your benefit to own a home to for it to be working towards equity and all that towards your financial picture. But again, I don't want you to do something that's going to end up harming you. So there is that balance there. So you do have a great savings. And again, some of that is going to be for your emergency fund and what you live off of. So I would be working and putting as much money away as possible to save up for, again, I mean, I would try to put down 50, 60% down on a home. I mean, that would be incredible. And on a home that really is the right home for you.

You know, let's not go overboard here. Let's take care of you. It needs to be comfortable for you. You know, you don't know what's going to happen relationally. Are you single, Julie, still? Yeah. The other question I had is as far as what I'm putting into my 401k, if I should be putting more in savings instead of I actually reduced it. I was putting 16% in.

Part of that was Roth, of course. And now I've lowered that down to 7% no 8% Roth and 3% pre-tax. And so I don't know if I should increase that, you know, in conjunction with just saving more. Yeah. Do you have a Roth IRA? Yes. Like I said, yes. Like about of my portfolio of the 400,000 in there, 56,000 of it is Roth. Okay. Okay. Okay. I apologize. Yeah. So I would go up to the match to the 401k. I would flood the rest into the Roth. And then you're only at 8% right now.

So I would be funding 15%, especially at your age right now. And so whatever the remainder of that is, income-wise, I would go back to the 401k and do that until your income is at that 15% mark. Yeah. Julie, are you single? Okay. Yes. Okay.

Any plans? Any plans? Yeah. Are we hoping that man comes along or are we talking about here? I'm not holding my breath. Yeah, but see, the reason I ask that is, is I want you to have the mindset. I want you to be hopeful for a relationship, of course, but I want you to have the mindset, what was life looking like and what do I really need given the fact that I'm single?

That's what I'm getting at. I want to make sure that you're – because you could always, if you get that kind of house or a townhome or whatever, like Rachel said, and you've got that hefty down payment, it's really setting yourself up. You still have options if the relationship factor changes. Right, right. Yeah, but I would be funding. Usually we would say, hey, to save up for a home,

pause everything and save up Baby Step 3B. But with your age, Julie, I would do the 15% and then anything on the side. And if you can live on half your income, I mean, within three years, you're going to have some serious money to go and buy something. So that would be my encouragement is that I want a house in your future. But take your time.

Let it be slow. And again, do not do something financially that's going to force you into delaying retirement or anything. You know, if you want to be working, I want it for you to be working because you want to. And maybe because you have a realistic, hey, in three years, my house is going to be paid off type mentality than getting into something on a 30-year mortgage or whatever that's going to be forever and ever, amen. So being really aggressive with it. But I think owning something, going into

retirement is going to be a great goal for you. I do too. Do you want to travel? Do you see yourself? What does retirement look like to you? Well, definitely I would like to do some traveling. And then my other love is music. I had originally gone to school for music, so I'm actively working on that and looking at that as somewhat of a side sole proprietorship type thing. Good, good.

And so what I'm looking at with that, and I've talked to tax advisors on that, is, you know, to help offset the cost with driving gigs with, you know, try to get that to balance out to zero, so to speak, and it might help my taxable consequence with my day job. Okay, good. All right. Well, you've got a great vision, and I think you have the ability to do it. And I think it's amazing to me what happens when people kind of get super clear on something. They go, okay, this is what really, really matters here.

This is what I need. And now I'm going to work towards that as opposed to having all these different ideas and not locking in on a very clear goal. It's really important because the discipline and all the things we teach will work if you know what you're going towards. I think that's important. That's right. So that's really important because the discipline and all the things we teach will work. The focus of it. If you know what you're going towards. I think that's important. That's right. So that's really fun. Well, thank you so much for the call, Julie.

We're excited for you. The best is yet to be. Speaking of the best is yet to be, there's a couple more segments in this hour. Don't go anywhere. She's Rachel Cruz. I'm Ken Coleman. This is The Ramsey Show. Welcome back, America. You've joined the conversation here on The Ramsey Show. I'm Ken Coleman. I'm joined by Rachel Cruz this hour. We're here for you taking your calls,

888-825-5225. Now, Rachel, you're way more advanced than me on social media. On a lot? On a lot. Look at you taking a shot at me, but that's fair. You really are. In life? In life, yeah. I'm just a loser compared to you. But one of the things you're really good at, and you're just adept, you're on the talk, you're on the gram, you're really good at all the social stuff. And I'm just a middle-aged guy trying to figure out what's going on. But the reason I'm bringing this up is I'm assuming you've heard these terms, quiet quitting and bare minimum Monday. Have you heard these terms? They're huge on TikTok. Bare minimum Monday. Yeah. So bare minimum Monday is a very famous TikToker has come up with a way to like, I got to ease into Monday. I need a little bit

more time than Saturday and Sunday. And these things are huge trends. And so here's the point. This is an excuse for complacency, for living an average life. Like you just can't win. You can't find a job that you're really good at, that you enjoy, that gives you a ladder to grow financially and live a life you want. This is the mentality, and I fight this stuff every day. And one of the tools we've developed here at Ramsey Solutions is the Get Clear Assessment. Now, what is this? It's about a 15 to 18-minute assessment, and it measures three things. I developed this. The team helped me turn it into something. And it measures three things, Rachel, what I'm good at, what I actually enjoy doing, and what motivates me. Now, this is an important tool because it leads to one clear thing, awareness. Awareness of self,

this is how I'm wired, this is how I'm unique. And then it makes me aware of pathways to a profession where I actually really enjoy showing up. And by the way, the financial payoff is exciting as well. So that's the tool. That's what it does. It's on a special deal right now. It's a $30 assessment. It's $10 off right now until midnight. And it's going nuts on the Ramsey store this month

because of this special deal. Go check it out. Ramseysolutions.com slash get clear. Ramseysolutions.com slash get clear. RamseySolutions.com slash get clear. You get a detailed report in those three areas, what I'm good at, what I love to do, what motivates me, and then we put it together in a purpose statement. So you have your own purpose statement. This is who I am and who I want to be and what I want to do. So go check it out. I'm very proud. It's a great, oh, it's so good. And actually my family member,

brother-in-law took it. Absolutely. And raved about it. We did a deep dive. I know. It's so good. It is fun. And actually, my family member, brother-in-law took it. Absolutely. And raved about it. We did a deep dive. I know. It's so good. So, I mean, like, honestly, it really is. Yeah.

But it's such a helpful tool. Thank you. And the fact we live in a world today where stuff like that can be out and you can use it to your advantage. That's right. I mean, do it. This allows you to be uniquely you. So, go check it out.

All right. Let's go to D. Oh, this is great. If I wasn't named Ken, I think this is the name that i would like you would take this name i think i'd take this name let's go to dino in tampa florida dino how can we help well first of all it's an honor to talk to both you i i'm a big time regular fan and listener and i really appreciate the advice you give me whatever it be um just asking you to differentiate between my position and uh my wife's okay oh oh boy like this boy this is great i'm gonna i'm gonna come at it from dino's perspective and rachel will come at

it from your wife's we'll see what happens hit us all right i'll try to give you a synopsis now we we we are well as of 30 days ago we were completely debt free we own our home hey congratulations well thank you thank you i even have a rental house that it's 100 paid for amazing dino right yeah we think we're finally do we really suffered to get to where we're at and all the beans and rice as they say it's true i'm not at the seven-figure number, but I'm tracking it down. You're getting there. What I wanted to do is, right, so my business is heavy into real estate, and I have a fantastic, they call him a whale client. He's a great, great client, and he's responsible for a huge,

huge portion of our business. And long story story short he's invited us to attend um his party a birthday party up in new york city which is going to cost us a couple of bucks now hold on hold on to give us the full detail i gotta know how much is it going to cost you because i know this is where this is headed well the thing is i kind of left something out there we just bought this we just bought it my wife a car brand new um and i anticipate i'm paying that thing off you know in less than six months for sure um wait wait wait you told us you were debt free well i know as of 30 days ago yeah i have to retract the screen for about six months but uh you don't get to do that so now you you you'll no you can't i didn't do the screen for for what it's okay but you can't go to new york you can't

go it's going to cost you a lot you didn't answer my question how much it was even going to cost but you can't do it do you not have cash in the bank, Dino, to pay off this car? Yeah, yeah, I've got about $25,000 in the bank, $15,000 in my savings, and $12,000 or so in my working account. I paid for the tickets already. It's going to cost me about $3,000 more. We're not going on a summer vacation because Fort Myers got destroyed. So I'm kind of also subtracting, also subtracting in by addition. They're kind of.

Okay. Dino, we know what's happening. What's the wife's position and what's yours? Let's get to the drama. That's what everybody wants to know. No, Dino wants to go. You want to go to New York. Yeah.

I know he does. But I want to hear him say it. That's part of it. Yeah, I mean, not only is it going to be awesome when you take the wife. Yeah, of course it is. Do you know? FOMO. Start spreading the news.

Dino's leaving today. I mean, we get it. She thinks we should hunker down. She thinks we should hunker down. Yeah, because she got a car loan now. She's already riddled with guilt over the car. Why didn't you go buy a $25,000 car? I bought a $25,000 car? I bought a

$48,000 car. Why? Because she's been doing without for so long. You're such a great guy, Dino. She got the truck. She got the big one, the nice truck. One and done, though. I've checked that off the bucket list. I won't ever be asked from her to buy

a car again. But that's the deal you know well you can go to new york if she sells the car back to the dealer we make up the difference hey just threw a high fastball right under dino's chin and he's thinking about it wow even though i could pay this thing off for real in six months you know um bro what do you want us to say you you started the call saying i really love the show you give me good advice and you thought we were going to give you a pass i thought you were going to say hey dude you know you're you're you know you can handle three g's you know what i mean

okay and here's the deal could you sure but also there's a discipline factor of like new you guys put yourselves back in a financial hole. Yeah. Yeah, you got a car loan now, and it's like, all right, now everything's focused on getting this car paid off. We're going to sell it. 100% buy into that. You know, on the negative side, will it hurt my career? Because this guy is in charge of more than half. She says it won't matter.

He doesn't care. He's not that guy. Trust me. Dino, I don't want this to hurt your feelings. He doesn't care if you don't show up. He's going to be pretty happy with or without you. He's going to be a New York party. Yeah.

Yeah. You're going to be home watching Netflix. That's what's going on with some microwave popcorn. And your new $48,000 car. Sitting in the garage. You should go watch the movie in the car Because I'm sure that's a DVD player Good call Movie night in the new car

I'm not going to New York Is what I'm saying I think we made it abundantly clear Dino Oh Kenny I thought you were A little bit nicer to me But you called the Ramsey show All of our cars we say Beans and rice, rice and beans.

You do nothing until your debt is paid off. We got really quick, though. I do have to go back. We're having so much fun with you, Dino. Did you say you already had paid some of the money towards the New York whale trip? Yes, sir. Can you get it back? Well, I can probably get a credit from the airline.

My company paid for it, and it's already booked. How much left would be on the trip? What's the rest of it? You figure it was like $500 for the tickets. It wasn't all that much. If they give me a credit, they might charge me $100 a ticket, so I'll have a little bit of credit if we want to do something. Yeah, but I'm saying how much more money would you have to put towards the trip?

Probably $2,500. You've got to do two hotels. Yeah, $900 a saying how much more money would you have to put towards the trip? Probably $2,500. You've got to do two hotels. Yeah, $900 a night for the hotel. We're getting a private yacht tour of New York. Oh, man, Dino. Dino, I've got to tell you, I really want you to go see the whale client. I really do. I want you to take a yacht trip around New York City.

I mean, that sounds amazing. It feels like you've got to have some pain in order to do this. You've got to sell something, maybe sell the car. Hey, I really would just sell that car, though, y'all. That's not worth it. Go ahead and get rid of it. It's depreciating right now. It's not worth it.

Then go. She's going to be okay in two years. So sell the car. And go to New York, then. Go to New York. Tell him to buy that. Get that whale harpooning. Get him to buy something else.

And enjoy the yacht. And pay cash for the new car. Watch the DVD in the car. Dino! Welcome back to The Ramsey Show. Thrilled to have you. I'm Ken Coleman. Rachel Cruz joins me this hour.

The phone number to jump in is 888-825-5225. Our scripture of the day comes from Ecclesiastes 1, verse 8. Everything is wearisome beyond description. Can we just pause right there? That's what I'm feeling sometimes. You got three teenagers. I'm exhausted. Back to the Bible.

No matter how much we see, we are never satisfied. No matter how much we hear, we are not satisfied. No matter how much we hear, we are not content. Our quote comes from Bob Lazar or Laser. I don't know how to. Lazar. Is it Lazar? Thank you very much. I'm hooked on phonics.

There is much that appears initially to be black and white and absolute, but later is revealed to be more gray than white or black. And I'm getting cheer hands over here from you. You got a little something to add to that? No. You like the gray? That's what I've learned. The older I get, the grayer life is.

That was curated for you, Rachel. Was that for me? Do you know who that is? No. He's like an aliens conspiracy theory guy. Oh, is he? See, which explains why I didn't know his name. I missed it.

I stay away from the conspiracies. Anything I know about that comes from you. And I dive right in. Wow. Talk about a rabbit hole. I should have known that. I don't know why that didn't ring a bell. I'm surprised you don't have our end in his book club.

That's why he's talking about the gray, the gray in life. And why you did praise hands. There's a lot. I know. It speaks to my soul. A lot being revealed, folks. In my soul. So a million dollars seems to be the end goal for a lot of people. But in today's

economy, the question is, is it really enough to retire on? So listen, no one likes surprises, especially when you're ready to retire and go on the beach and enjoy your life. You don't want to realize that you don't have enough to cover your day-to-day expenses. So in this week's edition of the Ramsey newsletter, we answer the question on whether you can still retire on a million dollars. So to get the question answered, simply sign up at ramseysolutions.com slash newsletter to subscribe to our Sunday newsletter and learn more on how much you need to have for retirement. And this is perfect timing because Kelly happens to be on hold in Rochester, New York. And I think may have a retiring question. Kelly, how can we help? Yes. Thanks for taking my call. So I hope to retire in about four years. I'll be 59 soon. I will have a New York state pension and that should

equal about 47,000 gross, then plus Social Security. I have really no investments at this point. I'll be probably finished with maybe step three mid-November. It depends on what I think I really need to have as my safety net. So my question is, I really wanted to get my mortgage paid off before I retire. I mean, I know it's going to be hard work, but if I do that, then I really, I would, if I took the 15% and invested that, you know, after step three, I would not be able to pay my mortgage off because that's going to be, you know, that would probably be half of what I would be putting towards extra towards my mortgage. You know, I have the possibility to be able to work part-time after I retire, but you know, for what I'm doing right now, I think that's my plan is to stop in four years. Okay. So how much do you make a year? Let's see. So I'm at at 86 000 and then that'll go up every three percent for 3.5 percent for the next four years 3.75 okay so 86 and how much is left on the house 107 107 okay yeah so it's always that that balance of wanting to retire because if you pour everything into the

house but you don't have any cash to money to off of, then that puts you in a predicament. But then also, you don't want to be left with a massive mortgage payment that you're having to pay out of your retirement. So it really is kind of walking that fine line, Kelly. Right. So if you can be doing, I mean, honestly, to where it is at both. And if I were you, I know you, what do you do for a job? Because I know you're saying you're wanting to retire in four years. Yeah, I'm an occupational therapist.

Okay, okay. So what if you did work an extra two years beyond what you wanted, and you ran the math out, would that be able to help with the mortgage significantly? Like, I'm just thinking another $86,000, I mean, $180,000 by that point, two years of working, would be able to push through to the mortgage. I mean, I guess I'd have to really sit down and figure it out. Do you do occupational therapy for the state? It's in the school district, yeah. Okay, that's what I was wondering because you mentioned the pension. Back to Rachel's question, the reason I asked the question, back to Rachel's question,

you're looking at four more years to be able to collect the state retirement pension, right? But to her point, an occupational therapist in the private sector is going to make a good bit more than you would for the state. And so even if you worked less hours, and I think that's where Rachel's going, okay, we retire from the state, we get the pension, that's nice, you put your time in, but I can pay the house off if I work three or four more years so that I get the investment going now and I can pay the house off even when I walk away from the state job. I'm just wondering, because you're still going to be relatively young. I mean, 59 and 4, and you're 63. That's pretty young.

Are you planning just to stop working altogether? No. Good. No, my plan was I was thinking about doing some travel therapy and go across country. I love that because of the travel pays better. Yeah. Oh, it definitely does. You know, but again, you know, I don't know what, you know, in four years, like what's

that going to look like. Plus, you know, if either one of my children have a baby, I want to be able to be around to help and things like that. Sure. Kelly, have you looked into the private sector at all? I just wonder even for the remaining four to five years of you working. There's the trade-off. You know what I mean?

You may be paying less into your pension, but the point is that you're making more money. Yes, but it's definitely a lot more hours. Just not at that stage in my life. I've been a therapist for almost 35 years. Sure, got it. That's just a whole home care. I get it.

So here's my point. I think that would be something I could definitely fall back on. So what you're saying, I could kind of split it. Good, good, good. But I would be funding still 15% of your income into retirement.

Yes, absolutely. And then anything else, I'm sorry? Like to a Roth maybe? Yes, exactly. I'd anything else? I'm sorry. Like to a Roth maybe? Yes, exactly. I'd be opening a Roth IRA. And I would sit down with a SmartVestor Pro, Kelly, in your area there in Rochester, because they're going to be able to run, because they may put you in more aggressive funds because of your age. They're going to help really guide you when it comes to get the most for your retirement. And then when that pension comes out, you're going to be wanting to invest that and use that money as well on living, obviously. So any money that you can still put away at

retirement, 15%. And I mean, man, I just always know those so close to retirement age, you know, even, I mean, it teeters at 15. I mean, even a little bit more if you went through extra. It's just, I want you to have a, be able to eat and travel and do the things that you want to do at retirement, as well as starting to see that mortgage chip away. So I would be doing both, Kelly, but I would sit down and yeah, if you don't have a vehicle like a Roth IRA or other things besides the pension, I would be looking into that because I want to flood as much money as possible again into that retirement, but also at the same time looking at the goal of the house. And you just make great money. And so looking ahead

to say, okay, what if I do work another year or two past retirement age? Even at less hours. Even at less hours. Kelly, you are in great shape. Walk the baby steps out. You're almost done with three. Let's go to four. Get fully engaged in four. And then you skip right to paying the house off at six. And you won't regret this. Get with a smart investor pro, as Rachel says.

And they'll help you see the specifics of what we're talking about. Real numbers. And then how long it'll take you to pay off that house, even after 64. I love that. Yeah, I mean, she has 107 left on the home, so I'm like, she can do this. And still enjoy the grandbabies and still travel. And I just love this, so walk it out. And I want to say something really quick.

This is not a hot take. It may be controversial, but I want to share this with people. We're talking about retirement right now. You can go do your own research on this. I don't have data to hit you with specifically, but the data is very clear that, Rachel, when we retire, people that when they go from working to no working at all, I mean, just like we're done, the physical and the mental and the emotional decline is substantive. And so slow down, yes, but I'm not retiring. I will work until I hit the desk. And that's it for me.

And I think that's how we're wired to do it. Hopefully not here on the show. It'd be terribly awkward. I was like, that would be just so sad. It'd be pretty memorable, though. Hey, Rachel Cruz, great hour. Always a joy to be with you. James Childs, our fearless leader. And the crew, thank you, guys.. Always a joy to be with you. James Childs, our fearless

leader and the crew. Thank you guys. And to you, America, thank you. This is The Ramsey Show. Hey, it's Ken. If you like what you heard in this episode and want to know more about getting started on the Ramsey baby steps, go to ramseysolutions.com and click on the Get Started button. We'll help you figure out the best next step for you based on your specific situation. Again, that's ramseysolutions.com and click Get Started.