Did y'all catch Dave Ramsey rip George Kamel apart over withdrawing 4% from retirement?

Who is in the 100% S&P 500 during retirement? So, the. 70 year old would have had 25-30% of his investable assets wiped out in 2022?

I watched a video the algorithm suggested to me a few weeks ago on this and they showed the math and basically exposed Dave as a fricking idiot.


His basic financial plan is good for (1) dumb people (2) people who had no financial education but are willing to change. Basically getting you out of hoc and starting to save.

Almost anything else Dave Ramsey says is not based in anything (other than his magical investment opportunities that are secret) and is much more often bad advice than good advice.

Ramsey is a shock jock that likes to shame people out of debt. It works for his purpose

But if you are a responsible person he offers no advice worth taking.

It is always relative to income. Can't focus on withdrawal rate alone.

Also, a steady withdrawal rate never materializes. Withdrawal rates fluctuate with age. Most go thru some years of spending more on key wishes and less in other years. Medical costs and insurance affect withdrawal rates and can fluctuate by large amounts.

I have been looking at safe withdrawal estimates for a long time. I think the 4% rule is a good starting point for estimating how far retirement assets will go but the math behind it is very rigid. For instance, are you going to withdraw 4% from your retirement account every year and quit? Or, after a couple of good years in the stock market, are you going to withdraw 9% so you can buy a new truck (or roof, or AC) that year, but figure you are still safe because 4% of what's left is going to be enough next year? Are you going to try to get by on 3.5% if the stock market declines for a couple of years, maybe skip a vacation or something? When you compare the options of taking Social Security at age 62, 67, or 70 do you still plan to draw your assets down by 4% in each scenario?

It's a very typical of economists who keep preaching that the economy is like a pie, and that if someone gets a bigger piece, then everyone else's piece has to be smaller. In reality, everyone will adjust their spending somewhat to conditions. We see that every day in economic statistics when consumer adjust their spending based on how they perceive the economy. You will do the same in retirement, and a great many will crash and burn regardless of what withdrawal rate they choose.

In all those "Monte Carlo Analysis" scenarios, usually something like 8% is a safe withdrawal rate in something more than 60% of all scenarios (don't hold me to exact numbers this is off the top of my head), and 4% is safe in 95%. I don't go out deep sea fishing when there are 12 foot swells, if the water is too rough, I stay home. That's how people live, and how most are going to manage retirement assets. The 4% rule, or 8%, or 12%, are useful numbers, but life is different than that, and you will adjust your behavior to the situation at hand. If you have been good at doing that all your life, you probably will continue to be good in retirement.

Just remember the fable of the ant and the grasshopper. If the market is good for a few years, plan on that truck, but plan on stashing some of your wealth in some asset to prepare for the inevitable times when the market will not be good.

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What's the Money Board think?

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I think Ramsey is hack and a hypocrite. He uses God to sell. He takes government incentives while railing against them. To get hired there, they interview your spouse and will fire you if you have a kid out of wedlock. Super creepy vibe in those offices. They have a "righteous living policy"

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Ramsey and other company executives said in their depositions they don't fire employees for engaging in oral sex outside of marriage, but only sexual intercourse.

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the company fired a male employee whose wife was pregnant after company officials calculated the date of conception was before the couple got married, according to transcripts with depositions with multiple company officials and copies of their emails. Another female employee was fired after her boyfriend was reportedly seen walking around her apartment building one morning in boxers.

If an employee is living with a boyfriend or girlfriend, company officials assume the couple is having premarital sex, thus necessitating that employee's termination, Ramsey and another company executive said in depositions.

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LINK

I mean an 8% withdrawal rate is fine if you can guarantee 12% returns every year without fail.

But all it takes is just one bad year of a 20% drop and you have a huge problem on your hands.

Remember, this guy went bankrupt. He didn't all of a sudden learn some magic financial breakthrough.

Having no consumer debt, especially no credit card debt, is great advice for anyone. He likes to say it's advice his grandma would give... and he is 100% correct.

But Dave has figured out that if you become an "expert" in one area, then people will let you sell other areas to them... and when you sprinkle in some religion... it makes a lot of sense.

He's basically Joel Osteen in corporate form instead of church form.

Seems like Ramsey's advice is to live in a shack while having a million in the bank and then die and pass it off to your children who will continue living in that shack.

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Seems like Ramsey's advice is to live in a shack while having a million in the bank and then die and pass it off to your children who will continue living in that shack.

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People who choose to live with less are much happier than those that choose to live with more.

Dave Ramsey is a very good for general purpose “how to handle money and run your household financially”. It’s not an end point, it’s a basic overview guide. Many many people will not get past the basic overview. Certainly most on money talk are way beyond that overview and focused on maximizing every avenue they can. Most Americans are not money talk