Dave Ramsey Reaction to Safe Withdrawal Rates - 4% Rule or 8% Rule
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- Опубліковано 9 лис 2023
- Be careful with this. Just my opinion. Dave Zoller, CFP®
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#retirement #daveramsey #reaction
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Dave Ramsey is the smack in the face that people need to get out of debt.
His retirement advice is questionable.
Have you noticed Dave Ramsey has never shared the funds that ALWAYS generate him 12% returns?
It's so weird; Dave's debt advice is simple and works wonders, yet his investment advice is horribly irresponsible and easily disprovable. The market does not move up consistently every year to support his withdrawal rate, it zigs and zags. He is conflating "average returns" with "reliable returns". Some years the market is down 20%. Some years up 20%. Study after study shows this is why (1) You don't want to be 100% equity invested at retirement and (2) Average market returns do not equal safe withdrawal rate. Thanks for continuing to educate people on Sequence of Returns Risk, people with mega-wealth don't need to worry about it but the other 99.9% of us don't have a gigantic $ cushion so it matters to us.
I don't believe math has ever been one of Dave Ramsey's strengths.
I’d never pull out 8%, 4% is more realistic for a 30year time frame. I think George was talking about FIRE people who expect a 40+ year retirement and I agree.
If a person retires, even at 65, with an 8 percent withdrawal rate, and there is a bear market for 2 to 3 years, even at a drawdown of "only" 10% or less per year, do the math. An 8 % withdrawal rate during a bear market would mean assets drop by over 50%, not even counting the impact of inflation. Close to game over. Thank you for politely expressing your concern. Unbelievable.
If i could get 12% every year, i would be retired right now.
I don’t care for Dave Ramsey and condescending attitude, also the name calling.
Poor Rachelle, she knows hes wrong but cant bite that hand that feeds
Dave Ramsey is a salesman. Not an investor. Where are those magical 12% funds ? 😂😂😂😂
There are 4 types of people in this world:
7) those who can do math
5) those who can't do math
8) Dave Ramsey
Strange how Dave plays up being safe and conservative when you have a work income, but let’s throw caution to the wind when the work income is gone.
Love to know where the 12% returns are. None of my 401k accounts are showing anything close to that.
I seriously doubt that Dave made 12% returns on his stock in 2000-2003, 2008-2010 or even 2022. Dave should stick to getting people out of debt and refrain from giving investment advice.
@Streamline Financial of all your videos, I enjoyed this one most. It's off-the-cuff and seems more relaxed and less scripted. It shows your personality a bit more casual. Keep it up.
Thanks for saying that! I'm glad you liked it.
Funny, no one commenting on this post agrees with Ramsys BS 8% withdraw rate. Most professional advisors will advise you to use 3-5% depending on the current climate . Pull back in down periods, treat yourself during the good times.
Now that I have seen it... I think He definitely owes George an apology. Dave went from 0-100 with only the briefest thought that he may not have understood the content the user was referring to.
😂 "Mom! The meatloaf, is it ready yet?!" Hilarious!!
4% is a guideline, not a fixed rule. There are so many unknowns.
Dave is getting two things mixed up, the rate of return and the 4% rule. The 4% rule starts at 4% and then takes the original $ plus inflation each year. In down markets still take the formula. Mixing apples and oranges. If Dave wants to take investment return less inflation, in down markets he would be putting money into the retirement account. Basic misunderstanding of the rule and very quick to disparage others.
As a person retired and depending on your investment to fund your life, you must, MUST keep your finger on the pulse of the market and adjust your withdrawals depending your returns for the previous year. There is a “rule” on withdrawals, but it should be a guideline, not a rule. Be flexible with your financial plan.
I used to be a big fan of Ramsey, but damn did he really let his ego get to him this time.
My financial planner/analyst tells me, my withdrawal rate needs to be fluid, and can and will change due to the economic environment and my own financial situation. This is my first year in retirement and I have been pulling 6% out. I have not taken my SS yet, he said, wait until I reach my FRA, I'm 65 right now.
He totally ignores sequence of returns, and the danger with that. He’s great at helping people get out of debt, but after that his methodology for spending down assets is beyond risky.
Bill Bengen actually had the number close to 5% from my understanding. I have read a couple articles that thought it should be 3%. I'm sticking with 4% for my planning and I'll adjust when needed. Dave can take his 8% and go away. He's flat out wrong on this and I don't need to be an expert to know that.
Sequence of event risks is something Dave must not understand. He should stick with getting folks out of debt. Retire in 2008 and withdraw 8% and you would be hosed.
Life is neither simple nor guaranteed. Markets go up and they go down. Sadly, Dave has forgotten these bare bone rules. As mentioned the 4% and 8% rules are simply for basic bar room napkin calculations. For example, there is no mention of Social Security or possible pension income which can have significant impacts on withdrawal needs.
I use an online retirement calculator that asks for detailed income and expense info and then runs a Monte Carlo on them with multiple tax, inflation and other considerations and it says I have a high chance of doing ok over 30 years. If you really want a good answer on retirement then you need to do the same detailed calculations too. Good luck!
Really enjoyed your honest summary on this topic 👍🏻
You can’t take 8% percent or more out of your IRA during months & years that the stock market is down if you don’t want to deplete it fast. Sequence of Return Risks is real. Be careful when you sell shares on withdrawals. You have to pay attention to your money.
It would be bad enough if Dave only gave his bad advice, he decides to tell you also to stay away from people who actually know what they're talking about.
You are not going to average %12 unless you take a lot of risk. A retiree shouldn’t need to take a lot of risk. From 2000-2012 the S&P500 traded in range. There is no way you could average 12% during periods like that. 2024-2034 will be like that period.
Fall 2007 to spring 2009, the sp500 dropped apx 50% !!!
Great job this was so helpful!
Love your nuanced approach. Just subbed.
Dave, you do such good work, consistently, and with good research and thought. So glad you are not a moron.
I started listening to Dave Ramsey when he launched the Money Game on WTN 99.7 in Nashville around 1993. He was funny, helpful and seemed to really come from a space of service in helping callers. As someone given zero financial advice from my parents or high school at 17, beginning to get into student loan debt, his advice was a godsend and gave me a path that has helped me throughout my life. Having said that, I don't recognize the person inhabiting his skin over the last several years. Is it from that skin being too thin to criticism? Maybe. Bragging about how rich he is, insulting callers and his own employees publicly over the tyranny of small differences, indulging in being a strident ideologue. It seems personal. I don't want to criticize his faith but have a little grace. I'm an atheist and he makes me want to scream at the screen "Jesus Christ, dial it the eff back a skosh!" He should step back and go walk in some modern people's shoes for a mile or a marathon. But he'd say he doesn't need to because he knows it all already got the t-shirt.
The funny thing is that all of the yelling and name calling can be avoided if he just pulled up an Excel spreadsheet. Show everyone your receipt!
Great Video!
Ramsey is just wrong. He doesn't seem to understand the benefit of a montecarlo analysis. In general, his investment advice sucks. His getting out of debt rants, are better. For example, his rant against credit cards makes sense if you don't have the discipline to pay them off every month. I guess there is a place for him, for some. Now he can call me stupid too.
Dave Ramsey's debt reduction plans are as good as it gets.
His retirement thoughts are overly simplistic.
Hopefully, some of his advisors will rein him in on this and explain "sequence of return."
I agree that the financial community has a vested interest in their customers leaving money in their accounts. An adviser who makes a percentage of what he manages wants to manage more money.
Dave wants people to buy his books.
Didn't Dave live through 2008? If your $1 million portfolio dives 30% in year one, you have $700k, assuming no withdrawal. If it goes up 30% in year 2, you have $910k. Your average return was zero, but you lost $90k??? That's the math.
Again, I'm a big fan of his steps. Follow his steps, and you can get out of crippling debt.
Excellent video Dave Z. I am thrilled I found you! New subscriber. TY!
You're pretty funny today. Made me smile at the end of a tough work-week...thanks!
I'm so glad! Have a good weekend.
I really appreciate the analysis. I'd love to hear more of this. Thanks.
I'm a big Dave fan, but this is a very valid point. Thank you
I sensed that also about Rachel , she seemed very uncomfortable, and you’re not the first on this platform to call him out
😂😂😂the attic. Thanks for your analysis.
In my opinion, Dave is incredibly unprofessional by his condescending comments and name calling. He isn’t open to anyone else’s opinions.
I agree with you (Streamline Financial), it is very hard to get 12% year after year....
It is very important that one curb their spending, and one live below their means year after year. Be very frugal. I won't follow Dave Ramsey in that respect.
Dave doesn’t know what FIRE is
thank you for this "public service message" review Dave. There is no way I would have stayed as calm.
I feel so bad for George.
Calling people names would turn me off. I’m no saint and I’m not that religious but he who has not sinned, cast the first stone.
Thank you for your objective analysis.
I retired in Dec 2020 - just in time for market slump of 20 months .. Pulled 3% for first year and a half..
Now that market has recovered - pulling 6%
Working for Dave must be horrible 😂
I am so glad you are putting out another opinion and challenging the Ramsey crap! He is a bully! And obnoxious!
ma! meatloaf!! Classic Dave. Happy to be in the Streamline Financial "Rabbit Hole" keep it up!
Dave Ramsey never heard of sequence of returns?!?!?
Heart of a teacher
Amazing seeing dave bash people for being more conservative with their money...
Dave Ramsey's baby steps worked for us, so thankful for it.
Even his daughter’s facial expression and body language didn’t agree with David Ramsey😂😂
Dave, I’m glad to be in your rabbit hole!
😂😂
Ha! Thanks, JP!
This was an excellent reaction video. I am floored at DR’s advice here.
Dave Ramsey: if you're makin' 12.... Seriously? Who is making 12? I'm not. Dave Ramsey's assumptions are, to be polite, a bunch of bunkum.
12% annual return??.. 👀😳.. Wait... Wutt??.... Is he for real?? 🙄
Your approach to disagreeing with Dave is with grace, to say the least. You will be on the right side of history and considered a gentlemen. Carry on!!
A typical Dave Ramsey response. He is the personification of a narcissist. Clearly he doesn't use Fi Calc or other tools like Monty Carlo analysis to test his opinion. Simply put he is dead wrong IMO. He does have some good opinions and observations but his arrogance, rudeness, and illusion of grandure does more harm than good. His ego would never allow him to acknowlege he made a mistake or misspoke. Keep up your good work here.
Great video, thanks! How was the meatloaf?
I've just recently came across your videos and was on the fence about whether to subscribe to another investment advisor partially because I sometimes find you hard to follow but when I heard you yell down to your mother about the meatloaf it knocked me off the fence and into subscribing to you. Bonus points for pointing out how Ramsey's investment advice should be avoided at all costs. Keep up the good work. #ChazzReinhold #WillFerrell #weddingcrashers
I agree. You can’t assume a 10% return. Sometimes there are years upon years of mediocre returns. Every person has unique needs and portfolio’s
Enjoy that meatloaf, Dave! DR wants everyone to eat beans and rice only! Rachel is on more with him to try to calm him down. If someone thinks the best way to talk to me is to shout and rant AT me, that does not work for me. Keep up your good work, Dave!!
Even a 15 year retirement is unsustainable at 8%
6% is safe, even including sequence of returns
Never have had 80K to spend a year, why would you need that much? Never made that in a whole year gross.
That return is average. Some years more but many years less. If you have several down years your principle will drop.
You have to take a lot of risk to get 12% each year.
That was great. Mom is the meatloaf ready?
Dave's risk in retirement is more than mine. I am more 60/40 and not tracking the SP at age 65. 7% withdrawal should be fine. A withdrawal rate isn't what I am spending. It is just what I am withdrawing to get it out of my accounts.
Who is banking 12%?
I have never seen 12 % gains year after year. From 1930 to 1953 the market was zero gains.
If I were to take 8% plus my S/S would give me more money a year than I ever have had let alone have anything to do with that kind of money and run out much sooner. I'm 67, if I took what my RMD would be now + S/S is still to much. It's more than I would need or could spend.
How do get 12% . I haven’t seen it in my investments over the years.
According to Vanguard Expect 5% a year stock market return over the next decade.
What about a "cash buffer" as prescribed by Next Level Life? Would that effectively insulate you from retiring in a bear market?
2022 was a 19% down year. So what do you suggest Mr. Zoller? We're now back where we were in the beginning of 2022 with our balances (actually a little above).
Might be a better approach if Dave would talk across to people rather than down upon them.
S&P500 return in 2022 was -18.11%. Nuf said
The investment return may not go up to 12% every year. It may go up to 18% for a year or more! 12% is average!!
Needs in retirement change as one ages. Getting more in early years make life more enjoyable. As one ages needs and travel usually declines.
“What is she doing? I never know what she’s doing.” 😂 loved the reference
Does Dave Ramsey know about a thing called capital gains taxes or dividend taxes? Or fees?
Yeah, Good Luck averaging 12% per year. Disclaimer; past results may not indicate future returns. If you are basing your future returns on a 12% average assumption, you are going to be in trouble.
I wonder if Dave remembers Oct. 19, 1987.
Most people don’t have a million in their accounts.
Wow it really is a long way to the top if you want to rock and roll .
I like his get out of debt plan. However, his investment advice I’m not a fan off
Someone needs to semd Dave an investopedia article on sequence of risk 😂
Dave can get a negative return for years and it won’t really matter. For you and me, not so much
Someone give Ramey a variance calculator
Dave versus Dave. 😅 So much to say but I won’t. I voted with my retirement savings. Thank you Streamline!