Ramsey made me think twice... $3.5M PF earning 100k/yr...

[mikes425]

Not a Dave Ramsay fan for a few reasons but randomly stumbled on a recent segment from his show that resonated with me.

A guest called in my age range- mid 60s - states he has 3.5M in assets - still works - and questioning whether he can retire. The guy claimed his work income at 170k/year.
Dave's bottom line is, with those assets, he should 'easily 'be earning 350k/year off the PF alone. Double his work income, doing nothing so, no-brainer. Retire.
Dave casually suggests being mostly invested in 'growth mutual funds' to get that return and that "rarely has the market ever" seen under 5% return. "Maybe 2 years.."

I'm sitting at about 3.5M, age 68 next month. Still working and self-employed but
not pulling in an attorney's salary - more like 40k as a freelancer. Could be 100k+
but i don't want to work that much anymore.

Dividend income generated by my 50/50 AA PF ranges about $105-110k a year in the last few years. I still work some because i can take it or leave it and not stress about it. I also feel less stress having an allocation that's moderate, not all-in on growth funds - which apparently is way conservative in Dave's eyes, with his kind of presumptuous smug assurance that the dude is gonna make 350k/year off a 3.5M
PF and that's that.

I don't feel like tolerating a lot more risk..which to me, his default-recommendation assumes.
My question being...is 100k/year with a 3.5M/year PF overly protective. Should i consider a slightly more aggressive position. I'm not extravagant, COLA is low...
I own my modest 250k house, have no debt. I'll get an SS income of 34k/year if i take it this year, maybe 40k at 70 FWIW. My inclination is take it this year and invest most of it.

I think i'm ok in any event...this just made me question what backs up his slam-dunk certainty of 10% a year...and that anything less than 5%/year in an all-growth fund PF is a foolish expectation.

 

[Phroig]

You’re doing great, and can easily retire if you like. Stick with an asset allocation that you’re comfortable with. Ignore the noise, whether from Dave or somebody else.

 

[TheWizard]

Ignore most of Dave Ramsey...

 

[MarieIG]

Actually, I think you're ok too . . .

Mr. Ramsey has provided some people with assistance with paying off debt and budgeting, but I would take the advice concerning investments . . . with a grain of salt.

 

[Sorcerer]

Dave Ramsey is the new Suze Orman 2.0. They're both entertainers, that's about it.

 

[Diogenes]

I'm sitting at about 3.5M, age 68 next month. Still working and self-employed but
not pulling in an attorney's salary - more like 40k as a freelancer. Could be 100k+
but i don't want to work that much anymore.

Dividend income generated by my 50/50 AA PF ranges about $105-110k a year in the last few years. I still work some because i can take it or leave it and not stress about it. ..

OP, you're already "functionally retired". There really aren't any impending decisions to make, other than when to take SS, and whether to allow yourself to increase your spending.

Dave Ramsey is a fool, hawking high-fee actively managed mutual funds (nope, no conflict of interest there...). As to whether to abide more risk, in hopes of getting more return, that depends on what's your objective for the money. If it's growth for growth's sake, then yes. If it's wealth-preservation to ensure a dignified and commodious retirement, then probably not.

 

[NW-Bound]

I'm sitting at about 3.5M, age 68 next month. Still working and self-employed but
not pulling in an attorney's salary - more like 40k as a freelancer. Could be 100k+
but i don't want to work that much anymore.

Dividend income generated by my 50/50 AA PF ranges about $105-110k a year in the last few years.

Your dividend yield is 3%. If 1/2 of your stash is in the S&P 500 which appreciated 16.4% in 2025, that adds another 8.2% to your stash. You got more than 10% total return last year!

It's not wise to expect a return of 10% or more consistently each year, but an average of 5% is a modest expectation.

 

[bada bing]

What is a PF ?

 

[TheWizard]

What is a PF ?

Portfolio...

 

[COcheesehead]

Dave is good for people in debt, but not so much for everyone else.

 

[TheWizard]

Actually, I think you're ok too . . .

Mr. Ramsey has provided some people with assistance with paying off debt and budgeting, but I would take the advice concerning investments . . . with a grain of salt.

When I'm feeling a bit mischievous, I think it would be great fun to sneak into Dave Ramsey's office and cut up all of his credit cards with a pair of scissors...

 

[jazz4cash]

OP, the most widely discussed maximum Safe Withdrawal Rate for a 30 yr retirement is 4% adjusted for inflation annually from a portfolio with at least 40% stocks. I think I got all the rules right. That’s $140k on $3.5M. You should run Firecalc for a more comprehensive plan.

 

[TheWizard]

When I'm feeling a bit mischievous, I think it would be great fun to sneak into Dave Ramsey's office and cut up all of his credit cards with a pair of scissors...

No more rental car reservations, plane flight bookings, or hotel reservations for him!!!

 

[COcheesehead]

No more rental car reservations, plane flight bookings, or hotel reservations for him!!!

He has said he has debit cards which enable him to do that.

 

[jazz4cash]

I just remembered Ramsey used to say 12% was a no brainer using “good mutual funds”.

 

[TheWizard]

He has said he has debit cards which enable him to do that.

I guess he's not one of those people who can handle credit all that well...
*shurg*

 

[kgtest]

Not a Dave Ramsay fan for a few reasons but randomly stumbled on a recent segment from his show that resonated with me.

A guest called in my age range- mid 60s - states he has 3.5M in assets - still works - and questioning whether he can retire. The guy claimed his work income at 170k/year.
Dave's bottom line is, with those assets, he should 'easily 'be earning 350k/year off the PF alone. Double his work income, doing nothing so, no-brainer. Retire.
Dave casually suggests being mostly invested in 'growth mutual funds' to get that return and that "rarely has the market ever" seen under 5% return. "Maybe 2 years.."

I'm sitting at about 3.5M, age 68 next month. Still working and self-employed but
not pulling in an attorney's salary - more like 40k as a freelancer. Could be 100k+
but i don't want to work that much anymore.

Dividend income generated by my 50/50 AA PF ranges about $105-110k a year in the last few years. I still work some because i can take it or leave it and not stress about it. I also feel less stress having an allocation that's moderate, not all-in on growth funds - which apparently is way conservative in Dave's eyes, with his kind of presumptuous smug assurance that the dude is gonna make 350k/year off a 3.5M
PF and that's that.

I don't feel like tolerating a lot more risk..which to me, his default-recommendation assumes.
My question being...is 100k/year with a 3.5M/year PF overly protective. Should i consider a slightly more aggressive position. I'm not extravagant, COLA is low...
I own my modest 250k house, have no debt. I'll get an SS income of 34k/year if i take it this year, maybe 40k at 70 FWIW. My inclination is take it this year and invest most of it.

I think i'm ok in any event...this just made me question what backs up his slam-dunk certainty of 10% a year...and that anything less than 5%/year in an all-growth fund PF is a foolish expectation.

What do you spend your dough on? It's not what you save it's what you spend at this point.

 

[Koolau]

OP, the most widely discussed maximum Safe Withdrawal Rate for a 30 yr retirement is 4% adjusted for inflation annually from a portfolio with at least 40% stocks. I think I got all the rules right. That’s $140k on $3.5M. You should run Firecalc for a more comprehensive plan.

Yes. Here is the access to FIRECalc:

FIRECalc: A different kind of retirement calculator

www.firecalc.com

The so-called 4% rule is a good starting point to give you an idea if you can retire. FIRECalc should refine things for you. Forget Dave Ramsey.

Decide how much you will (want to) spend in retirement and w*rk from there. With SS and 4% my guess is you can spend $175K/year or a bit less.

Keep in mind at 68, you'll be 98 in 30 years. Just sayin'

(Oh, and my plan goes to age 99)!

 

[mikes425]

What do you spend your dough on? It's not what you save it's what you spend at this point.

Appreciate all the replies here. As to my spending...it'll probably start being more about travel and leisure stuff but averaging an annual spend amount in the realm of 45-50k.

SS would essentially cover most basic living expenses/cash flow without having to touch principal so maybe "psychologically" i'll feel more at ease about $$ for luxuries hobbies or whatever add'l cost of lifestyle 'enhancements' once i start taking that.

And that said, i'd like to see more cap appreciation for the portfolio but i guess...who wouldn't

 

[HarveyS]

Yes, you can retire. Yes, as mentioned, you already are most of the way there.
50/50 is very conservative, but you should do what you are comfortable with. I hope you are maximizing the return on the 50% that is not equity.
I'm a big Ramsey fan, by my issue with Ramsey is that he says you can earn 10% on your net worth. I disagree if home value is (correctly) included in net worth. Now, if he based that on investable assets - I have no problem with a 10% return assumption. I've done better than that over the last 12 years.
Oh yeah, it's 10% per year on average. There will be up years and down years.

 

[target2019]

Appreciate all the replies here. As to my spending...it'll probably start being more about travel and leisure stuff but averaging an annual spend amount in the realm of 45-50k.

SS would essentially cover most basic living expenses/cash flow without having to touch principal so maybe "psychologically" i'll feel more at ease about $$ for luxuries hobbies or whatever add'l cost of lifestyle 'enhancements' once i start taking that.

And that said, i'd like to see more cap appreciation for the portfolio but i guess...who wouldn't

Do you still use a paid advisor? If so, I imagine his responses would be that your 50/50 AA is influencing your capital appreciation, and he doesn't use Dave Ramsey projections while advising you.

 

[srblanco7]

While an assumption of a 10% portfolio return is not completely batsh*t crazy, it's a bit aggressive and Dave's advice, in my opinion, ignores sequence of returns risk.

Historically, I believe he's advocated withdrawal rates of up to 8% given a 10-12% portfolio return assumption.

Made we wonder if I met with someone in his network of financial advisors if they'd advocate similarly - somehow, I doubt it.

 

[DrRoy]

To suggest a WR of 10% even at 68 is ridiculous. Your proposal is quite sound. I did not see that you were even counting SS in that. Still, I would go.

 

[Aerides]

Most here would not sign on to retire depending on a 5% swr. More common is 3 or under, though that's conservative. We retired planning for about 3.5, but after 9 years we're closer to 2 just because of portfolio growth far exceeding our spending spread.

OP retire when you want, you have more than enough.

 

[Gonzo26]

Not a Dave Ramsay fan for a few reasons but randomly stumbled on a recent segment from his show that resonated with me.

A guest called in my age range- mid 60s - states he has 3.5M in assets - still works - and questioning whether he can retire. The guy claimed his work income at 170k/year.
Dave's bottom line is, with those assets, he should 'easily 'be earning 350k/year off the PF alone. Double his work income, doing nothing so, no-brainer. Retire.
Dave casually suggests being mostly invested in 'growth mutual funds' to get that return and that "rarely has the market ever" seen under 5% return. "Maybe 2 years.."

I'm sitting at about 3.5M, age 68 next month. Still working and self-employed but
not pulling in an attorney's salary - more like 40k as a freelancer. Could be 100k+
but i don't want to work that much anymore.

Dividend income generated by my 50/50 AA PF ranges about $105-110k a year in the last few years. I still work some because i can take it or leave it and not stress about it. I also feel less stress having an allocation that's moderate, not all-in on growth funds - which apparently is way conservative in Dave's eyes, with his kind of presumptuous smug assurance that the dude is gonna make 350k/year off a 3.5M
PF and that's that.

I don't feel like tolerating a lot more risk..which to me, his default-recommendation assumes.
My question being...is 100k/year with a 3.5M/year PF overly protective. Should i consider a slightly more aggressive position. I'm not extravagant, COLA is low...
I own my modest 250k house, have no debt. I'll get an SS income of 34k/year if i take it this year, maybe 40k at 70 FWIW. My inclination is take it this year and invest most of it.

I think i'm ok in any event...this just made me question what backs up his slam-dunk certainty of 10% a year...and that anything less than 5%/year in an all-growth fund PF is a foolish expectation.

You could add a couple of fixed annuities in the mix for a little more income .MYGA. They are still at. 4.9-5.1 for A+ companies