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Yahoo
4 days ago
- Business
- Yahoo
Dave Ramsey vs. Suze Orman on the 4% rule: Who's right?
Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below. The 4% rule in retirement has been a widely accepted retirement standard for over 30 years. The rule states that you should draw 4% of your assets from your investments each year in retirement. This should, in theory, allow you to maintain a comfortable standard of living while continuing to let your investments appreciate in value. However, it seems this longstanding rule could be poised to fall. Don't miss Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) You don't have to be a millionaire to gain access to this $1B private real estate fund. In fact, you can get started with as little as $10 — here's how A recently retired caller to The Ramsey Show asked host and finance personality Dave Ramsey if it would be safe to go up to a 5% withdrawal rate in order to pay for trips he and his wife wanted to take in early retirement. Ramsey has said he believes that retirees can earn up to a 12% annual return from mutual funds, and will therefore be safe to withdraw more than the standard 4% per year without jeopardizing their nest egg. He calls the standard rule 'absolutely wrong' and 'ridiculous.' But another finance celeb has a very different opinion. Suze Orman has called the classic 4% rule 'very dangerous.' Orman, a fellow best-selling author and expert, also called for a tweak to the 4% rule in an interview with Moneywise — saying that retirees should only withdraw a maximum of 3% yearly if they are retiring in their 60s. Who's right? Here's what to consider. The importance of retirement accounts Ramsey's advice is based on a number of suppositions that may not reflect the real financial status of the average retiree. Inflation will eat away at the value of your retirement savings, and it's very possible that your retirement years could coincide with a period of higher inflation. That's not to mention the stock market's volatility. Many experts believe a consistent 12% return, like Ramsey has optimistically said mutual funds can deliver, may not be likely. Suze Orman's advice, on the other hand, is more conservative. She advises retirees to withdraw as little as possible from their savings, which is a safer approach. Either expert would argue that the best way to make your money last in retirement is to start saving as early and as aggressively as you can. A gold IRA is one option for building up your retirement fund with an inflation-hedging asset. Gold has historically acted as a hedge against inflation, and many professional investors such as Ben Mallah and Peter Schiff tout it as a solid alternative investment to the stock market and way to diversify your IRA as the price of gold continues to rise. Opening a gold IRA with the help of Goldco allows you to invest in gold and other precious metals in physical forms while also providing the significant tax advantages of an IRA. With a minimum purchase of $10,000, Goldco offers free shipping and access to a library of retirement resources. Plus, the company will match up to 10% of qualified purchases in free silver. If you're curious whether this is the right investment to diversify your portfolio, you can download your free gold and silver information guide today. Read more: Rich, young Americans are ditching the stormy stock market — Boost your existing savings If you're already in retirement, you may want to follow Ramsey's advice on growing your existing savings with safe vehicles like mutual funds. However, many retirees have not considered the benefits of certificates of deposit, whose returns can now exceed 5%. Between 2008 and 2022, when certificate of deposit rates were practically zero, and their appeal to investors about the same, they fell out of favour. But since the Fed started aggressively raised interest rates to combat inflation, certificates of deposits (CDs) have become a hot topic once more. And even though rates are slowly coming back down, these accounts are still worth a look. A certificate of deposit is a low-risk savings account that could earn as much interest as a high-yield savings account, possibly more. However, to earn that higher rate, you'll have to park your money in the account for a certain period of time. Invest for passive income in retirement Dave Ramsey is a huge advocate for finding new passive income streams to pay down debt and build savings. While much of his advice is focused on finding a lucrative side hustle, for those in their golden years, a more relaxed approach may be easier to incorporate. Before you begin investing however, you need a plan. And while Ramsey and Orman make good points on withdrawal strategy, you may need help that's more tailored to your personal situation. If you're unsure of how to navigate planning for retirement on your own, calling a professional give you some peace of mind. simplifies the search process by connecting individuals with an exclusive network of fiduciary advisors, each dedicated to transparency and held to high ethical standards. All you have to do is answer a few simple questions regarding your finances and long-term goals, and will connect you with a vetted expert near you who is best suited for your needs. You can then set up a free, no-obligation consultation to see if they're the right fit for you. What to read next How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you'll need a substantial stash of savings in retirement 5 simple ways to grow rich with US real estate — without the headaches of being a landlord. Start now with as little as $10 This tiny hot Costco item has skyrocketed 74% in price in under 2 years — but now the retail giant is restricting purchases. Here's how to buy the coveted asset in bulk Financial aid only funds about 27% of US college expenses — but savvy parents are using this 3-minute move to cover 100% of those costs Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free. This article provides information only and should not be construed as advice. It is provided without warranty of any kind. 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Yahoo
4 days ago
- Business
- Yahoo
Dave Ramsey vs. Suze Orman on the 4% rule: Who's right?
Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below. The 4% rule in retirement has been a widely accepted retirement standard for over 30 years. The rule states that you should draw 4% of your assets from your investments each year in retirement. This should, in theory, allow you to maintain a comfortable standard of living while continuing to let your investments appreciate in value. However, it seems this longstanding rule could be poised to fall. Don't miss Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) You don't have to be a millionaire to gain access to this $1B private real estate fund. In fact, you can get started with as little as $10 — here's how A recently retired caller to The Ramsey Show asked host and finance personality Dave Ramsey if it would be safe to go up to a 5% withdrawal rate in order to pay for trips he and his wife wanted to take in early retirement. Ramsey has said he believes that retirees can earn up to a 12% annual return from mutual funds, and will therefore be safe to withdraw more than the standard 4% per year without jeopardizing their nest egg. He calls the standard rule 'absolutely wrong' and 'ridiculous.' But another finance celeb has a very different opinion. Suze Orman has called the classic 4% rule 'very dangerous.' Orman, a fellow best-selling author and expert, also called for a tweak to the 4% rule in an interview with Moneywise — saying that retirees should only withdraw a maximum of 3% yearly if they are retiring in their 60s. Who's right? Here's what to consider. The importance of retirement accounts Ramsey's advice is based on a number of suppositions that may not reflect the real financial status of the average retiree. Inflation will eat away at the value of your retirement savings, and it's very possible that your retirement years could coincide with a period of higher inflation. That's not to mention the stock market's volatility. Many experts believe a consistent 12% return, like Ramsey has optimistically said mutual funds can deliver, may not be likely. Suze Orman's advice, on the other hand, is more conservative. She advises retirees to withdraw as little as possible from their savings, which is a safer approach. Either expert would argue that the best way to make your money last in retirement is to start saving as early and as aggressively as you can. A gold IRA is one option for building up your retirement fund with an inflation-hedging asset. Gold has historically acted as a hedge against inflation, and many professional investors such as Ben Mallah and Peter Schiff tout it as a solid alternative investment to the stock market and way to diversify your IRA as the price of gold continues to rise. Opening a gold IRA with the help of Goldco allows you to invest in gold and other precious metals in physical forms while also providing the significant tax advantages of an IRA. With a minimum purchase of $10,000, Goldco offers free shipping and access to a library of retirement resources. Plus, the company will match up to 10% of qualified purchases in free silver. If you're curious whether this is the right investment to diversify your portfolio, you can download your free gold and silver information guide today. Read more: Rich, young Americans are ditching the stormy stock market — Boost your existing savings If you're already in retirement, you may want to follow Ramsey's advice on growing your existing savings with safe vehicles like mutual funds. However, many retirees have not considered the benefits of certificates of deposit, whose returns can now exceed 5%. Between 2008 and 2022, when certificate of deposit rates were practically zero, and their appeal to investors about the same, they fell out of favour. But since the Fed started aggressively raised interest rates to combat inflation, certificates of deposits (CDs) have become a hot topic once more. And even though rates are slowly coming back down, these accounts are still worth a look. A certificate of deposit is a low-risk savings account that could earn as much interest as a high-yield savings account, possibly more. However, to earn that higher rate, you'll have to park your money in the account for a certain period of time. Invest for passive income in retirement Dave Ramsey is a huge advocate for finding new passive income streams to pay down debt and build savings. While much of his advice is focused on finding a lucrative side hustle, for those in their golden years, a more relaxed approach may be easier to incorporate. Before you begin investing however, you need a plan. And while Ramsey and Orman make good points on withdrawal strategy, you may need help that's more tailored to your personal situation. If you're unsure of how to navigate planning for retirement on your own, calling a professional give you some peace of mind. simplifies the search process by connecting individuals with an exclusive network of fiduciary advisors, each dedicated to transparency and held to high ethical standards. All you have to do is answer a few simple questions regarding your finances and long-term goals, and will connect you with a vetted expert near you who is best suited for your needs. You can then set up a free, no-obligation consultation to see if they're the right fit for you. What to read next How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you'll need a substantial stash of savings in retirement 5 simple ways to grow rich with US real estate — without the headaches of being a landlord. Start now with as little as $10 This tiny hot Costco item has skyrocketed 74% in price in under 2 years — but now the retail giant is restricting purchases. Here's how to buy the coveted asset in bulk Financial aid only funds about 27% of US college expenses — but savvy parents are using this 3-minute move to cover 100% of those costs Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free. This article provides information only and should not be construed as advice. It is provided without warranty of any kind. Sign in to access your portfolio
Yahoo
13-07-2025
- Business
- Yahoo
Dave Ramsey: What To Do If Someone Asks for Their Monetary Gift Back
Depending on the closeness of friends and family members, a financial gift can either come as a genuine support or it might come with invisible strings that prove to be more complicated than the money is worth. Only you can make that call. Find Out: Read Next: A young man called into finance expert Dave Ramsey's show, 'The Ramsey Show,' with a related problem: His grandmother had given him and his wife a gift of $9,000 to be used as they saw fit: for wedding planning, toward a home purchase or whatever they wanted, saying that she did not expect the money back. Over time, however, Grandma started fishing for personal financial information, such as how they were doing financially, which made the caller nervous. Soon, Grandma now not only wanted her money back, she wanted it back with interest, to the tune of around $12,000. With a household income, after taxes, of around $70,000, $12,000 is a lot of money for the caller and his wife to pay back. Here's what Dave Ramsey recommended they do (and what lessons can you take away from this story). Ramsey took the side of the caller, saying, 'You do not morally owe her a dime.' He suggested that the caller could just as easily take Grandma to task by reminding her that she had patently called the money a gift and was now reneging on that agreement. He told the caller he would be within his rights not to pay her back. However, Ramsey said he suspected the likely result of doing so was that Grandma would become 'Mt. Vesuvius, because she likes to pull people's strings, and when they don't dance at the end of her string, she has a little fit.' The caller agreed this was likely, given Grandma's history of doing similar things to his parents. Ramsey suggested that a person in this position has to make a choice between keeping the peace and doing what feels 'right' to them, which might include maintaining peace in family or being able to literally go home for the holidays. Learn More: Assuming correctly that the caller did not want to handle emotional upheaval or family drama, Ramsey suggested another alternative, a more practical, if disappointing, choice: to pay Grandma back, even though that wasn't the original agreement. Even within this scenario he urged the caller to think through his options that included making a payment plan and staying tethered to a manipulative relative for a long stretch of time, paying off only exactly the amount 'gifted,' or paying off the total 'plus interest' as Grandma now claimed they owed. The choice was the caller's. If the caller opted to pay Grandma back, Ramsey recommended getting the money paid off as quickly as possible — saving it in an account until it was all there — and making a clean break. However, he did warn that Grandma's manipulations might not stop there. If they paid the extra interest she was now 'charging,' he suggested she might suddenly find a way to keep asking for more. Sometimes, a hard boundary is necessary. It was up to the caller to decide. To recap, Ramsey's suggestions for your choices in a situation where a gift has been given and then rescinded include: Tell the person sorry, you're keeping what was given freely and deal with the fallout. Pay the person back either all at once or set up a payment plan, but only the amount given and not a penny more. Pay back the full amount with interest to keep a complicated relationship from getting worse. If any of these options don't appeal, or don't apply, you can also: Look into mediation with a neutral third party to try to reach a peaceful resolution. Speak with a financial therapist to work out complicated emotions before making a decision. Seek legal advice if the person threatens court action. Write a formal letter clarifying the original terms of the gift and your intended course of action. Get documentation in writing to prevent future misunderstandings if you choose to repay. Establish a firm boundary and step back from communication for a period of time. Consult a consumer protection attorney if harassment or manipulation continues. No matter what option you choose, get it in writing and have it witnessed and notarized. Additionally, it's probably a good time to lean into very clear communication and get everything in writing when it comes to financial gifts. More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 The 10 Most Reliable SUVs of 2025 The 5 Car Brands Named the Least Reliable of 2025 This article originally appeared on Dave Ramsey: What To Do If Someone Asks for Their Monetary Gift Back Sign in to access your portfolio
Yahoo
13-07-2025
- Business
- Yahoo
Dave Ramsey: What To Do If Someone Asks for Their Monetary Gift Back
Depending on the closeness of friends and family members, a financial gift can either come as a genuine support or it might come with invisible strings that prove to be more complicated than the money is worth. Only you can make that call. Find Out: Read Next: A young man called into finance expert Dave Ramsey's show, 'The Ramsey Show,' with a related problem: His grandmother had given him and his wife a gift of $9,000 to be used as they saw fit: for wedding planning, toward a home purchase or whatever they wanted, saying that she did not expect the money back. Over time, however, Grandma started fishing for personal financial information, such as how they were doing financially, which made the caller nervous. Soon, Grandma now not only wanted her money back, she wanted it back with interest, to the tune of around $12,000. With a household income, after taxes, of around $70,000, $12,000 is a lot of money for the caller and his wife to pay back. Here's what Dave Ramsey recommended they do (and what lessons can you take away from this story). Ramsey took the side of the caller, saying, 'You do not morally owe her a dime.' He suggested that the caller could just as easily take Grandma to task by reminding her that she had patently called the money a gift and was now reneging on that agreement. He told the caller he would be within his rights not to pay her back. However, Ramsey said he suspected the likely result of doing so was that Grandma would become 'Mt. Vesuvius, because she likes to pull people's strings, and when they don't dance at the end of her string, she has a little fit.' The caller agreed this was likely, given Grandma's history of doing similar things to his parents. Ramsey suggested that a person in this position has to make a choice between keeping the peace and doing what feels 'right' to them, which might include maintaining peace in family or being able to literally go home for the holidays. Learn More: Assuming correctly that the caller did not want to handle emotional upheaval or family drama, Ramsey suggested another alternative, a more practical, if disappointing, choice: to pay Grandma back, even though that wasn't the original agreement. Even within this scenario he urged the caller to think through his options that included making a payment plan and staying tethered to a manipulative relative for a long stretch of time, paying off only exactly the amount 'gifted,' or paying off the total 'plus interest' as Grandma now claimed they owed. The choice was the caller's. If the caller opted to pay Grandma back, Ramsey recommended getting the money paid off as quickly as possible — saving it in an account until it was all there — and making a clean break. However, he did warn that Grandma's manipulations might not stop there. If they paid the extra interest she was now 'charging,' he suggested she might suddenly find a way to keep asking for more. Sometimes, a hard boundary is necessary. It was up to the caller to decide. To recap, Ramsey's suggestions for your choices in a situation where a gift has been given and then rescinded include: Tell the person sorry, you're keeping what was given freely and deal with the fallout. Pay the person back either all at once or set up a payment plan, but only the amount given and not a penny more. Pay back the full amount with interest to keep a complicated relationship from getting worse. If any of these options don't appeal, or don't apply, you can also: Look into mediation with a neutral third party to try to reach a peaceful resolution. Speak with a financial therapist to work out complicated emotions before making a decision. Seek legal advice if the person threatens court action. Write a formal letter clarifying the original terms of the gift and your intended course of action. Get documentation in writing to prevent future misunderstandings if you choose to repay. Establish a firm boundary and step back from communication for a period of time. Consult a consumer protection attorney if harassment or manipulation continues. No matter what option you choose, get it in writing and have it witnessed and notarized. Additionally, it's probably a good time to lean into very clear communication and get everything in writing when it comes to financial gifts. More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 How Far $750K Plus Social Security Goes in Retirement in Every US Region Clever Ways To Save Money That Actually Work in 2025 This article originally appeared on Dave Ramsey: What To Do If Someone Asks for Their Monetary Gift Back
Yahoo
13-07-2025
- Business
- Yahoo
60-year-old-woman wants to own a home, but only makes $2,800/month
She's debt-free, has some savings and no major expenses. But at 60, Andrea still isn't sure she can buy a home or retire — and she called into The Ramsey Show to ask if it's even possible. 'I want to own a home and retire one day,' the Phoenix, Arizona resident told co-hosts George Kamel and Dr. John Delony. But with a modest monthly income of US$2,864 and no retirement strategy in place, she's unsure how — or if — she can make that dream a reality. Here's the skinny on her retirement plan and how it can help you. Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich — and 'anyone' can do it The Canadian economy is showing signs of softening amid Trump's tariffs — protect your wallet with these 5 essential money moves (most of which you can complete in just minutes) I'm almost 50 and don't have enough retirement savings. What should I do? Don't panic. Here are 6 solid ways you can catch up Andrea lives with her son and his family and only pays for car insurance, gas and the occasional incidental. That leaves her with approximately US$2,154 each month to save. She has US$69,000 in a 401(k) — which is the American equivalent of an RRSP — and US$45,000 in a savings account. She's also considering relocating to Ohio, where her aging siblings live, to be closer to family and cut living costs. Andrea works in medical records and hopes to move to a remote role at her company that pays about US$40,000 annually. She's also certified in medical coding but hasn't worked in that role. The hosts quickly identified her biggest hurdle: boosting her income. 'What you're facing here, Andrea, is an income problem,' Kamel said. 'We've gotta get your income up because that's going to create more margin for you to save for that home.' Starting late doesn't mean it's too late. At 60, Andrea still has solid options to grow her retirement savings. 1. Put money away for a down payment The hosts recommended using her US$45,000 as both an emergency fund and a down payment reserve. They advised setting aside three to six months' worth of living expenses as a safety net, with the rest going toward a future home purchase. 2. Invest 15% of her income into retirement Andrea said she's currently investing only about 1%. The hosts stressed that saving alone isn't enough. They encouraged her to invest in mutual funds through her retirement account. If done consistently, she could see 10-12% average returns over time. 3. Pursue higher-paying roles With her experience and certification in medical coding, Andrea could land a better-paying remote job. While her starting salary is US$40,000, the field offers room to grow. ' Even if it's not the exact role you want, I would just try to get on a ladder,' Kamel said. 4. Continue living with family or find a roommate To keep saving aggressively, the hosts suggested Andrea stay with her son or consider moving in with her siblings once she's in Ohio. 'It might not be ideal,' Delony said, ' but I love the idea of you saving money over the next five or 10 or 15 years until somebody can help you." 5. Adjust expectations around retirement Andrea may need to work into her 70s to reach her goals. That's not uncommon — in 2022, one in five Canadian seniors aged 65 to 74 were working, almost half by necessity, according to Statistics Canada. ' You know you got US$69,000 in that retirement account,' Kamel said. '(If) you keep investing, let's say, a thousand bucks a month. If you can do that to 72, you'll have over half a million in that nest egg. ' He added that she could also get a reasonable mortgage to avoid paying rent forever. Andrea's situation underscores a growing concern for older North Americans: how to make a smooth and comfortable transition to retirement. The co-hosts stressed that with focus and a solid long-term plan, Andrea still has a real shot at a meaningful future. 1. The Ramsey Show Highlights: Is It Too Late For Me To Invest For My Future? (May 15, 2025) 2. Statistics Canada: Employment by choice and necessity among Canadian-born and immigrant seniors (April 24, 2024) Read more: Here are — and very quickly regret. How many are hurting you? This article provides information only and should not be construed as advice. It is provided without warranty of any kind. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
