What retirement plan does Dave Ramsey recommend?
Asked by: Valentin Wehner IV | Last update: April 14, 2025Score: 4.4/5 (24 votes)
What type of retirement account does Dave Ramsey recommend?
For personal finance guru Dave Ramsey, one retirement account option stands apart from the rest. Ramsey recommended contributing to a company-administered 401(k), but not necessarily the traditional version. “We always recommend the Roth option if your plan offers one,” said Ramsey.
What is Dave Ramsey's 8% retirement rule?
According to Ramsey, an aggressive portfolio comprising equities and with a 3% inflation rate factored in can easily help retirees withdraw at an 8% high retirement withdrawal rate while still allowing their investments to grow. However, many financial advisors challenge the notion.
What type of investments does Dave Ramsey recommend?
Ramsey often recommends allocating investments into four types of mutual funds: growth, growth and income, aggressive growth, and international funds. This diversification strategy helps protect against market volatility and ensures a balanced approach to retirement savings.
What does Dave Ramsey say about 401(k)?
Ramsey clarifies his belief that a company matching 401(k) is a great place to start. Once a person maxes out their company match on their income, a Roth IRA is the next place to complete the remaining portion of the 15%.
What's The Right Way To Invest 15% Of Your Income?
Is it better to max out 401k or Roth IRA?
Depending on their plan's investment menu, employees might be better off maximizing the match from their employer and then funneling extra retirement dollars into a Roth IRA. That way they can take advantage of better investment options if the fund lineup is too limited in the employer's plan.
What is the difference between a 401k and a 403b Dave Ramsey?
Investment options: 403(b) plans only offer mutual funds and annuities, but 401(k) plans offer mutual funds, annuities, stocks and bonds. Because 401(k) plans are more expensive for the company, they usually offer a wider range and sometimes better quality of investment options.
What does Suze Orman recommend investing in?
Whether you're new to investing or looking to refine your strategy, Orman advises investing in index funds or ETFs and staying consistent, whether the market is going up or down.
What type of bank did Dave Ramsey recommend?
Ramsey points to credit unions as a better option for most consumers. "I prefer credit unions because of their membership focus, lower fees, and better experience overall," he explained. Unlike traditional banks, credit unions are nonprofit organizations.
Does Dave Ramsey recommend index funds?
Although index funds are popular among novice investors, money guru Dave Ramsey is a big believer in actively managed funds.
How much does Dave Ramsey say to save for retirement?
According to the Ramsey Solutions post, the recommendation is to invest 15% of your household income for retirement. The article uses the example of a household income which is $80,000 annually. Based on these earnings, each year you need to invest $12,000 towards your retirement savings.
What is the 5 year rule for retirement?
If your investing and tax strategy for retirement includes tax-advantaged Roth accounts, you've probably heard about the IRS's five-year rule. The simple version says the Roth account needs to have been funded for five years before you withdraw any earnings—even after you've reached age 59½—or you could owe taxes.
What is the 7% rule for retirement?
The 7 Percent Rule is a foundational guideline for retirees, suggesting that they should only withdraw upto 7% of their initial retirement savings every year to cover living expenses. This strategy is often associated with the “4% Rule,” which suggests a 4% withdrawal rate.
What does Suze Orman recommend for retirement?
As reported in the article “Are You On Track for Retirement?” she advocates having at least one times your current income saved by 30. She also says you should have three times your current income by the age of 40 and six times by the age of 50.
Does Dave Ramsey recommend a savings account?
You're trying to save for specific purposes like emergencies, a down payment on a house, a family vacation, or even next year's Christmas fund." If investing your money into a savings account is something you want to do, Ramsey does acknowledge that a high-yield savings account is a better option but points out the ...
Which is better Roth or traditional IRA?
To come out even in terms of after-tax savings, you have to be disciplined enough to invest the traditional IRA tax savings you get every year back into your retirement savings. If that seems unlikely to happen, then you'd be better off saving in a Roth, where you'll arrive at retirement with more after-tax savings.
What bank does Suze Orman recommend?
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What bank do millionaires use the most?
J.P. Morgan Private Bank, Citi Private Bank, and Bank of America Private Bank are among some of the most popular banks for millionaires.
What bank does Warren Buffett use?
Buffett, one of the world's most revered investors, started investing in Bank of America in 2011, when Berkshire purchased $5 billion of preferred stock. The 93-year-old's investment in the lender came at a time when some investors were worried about the bank's capital needs.
What does Warren Buffett recommend you invest in?
“Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund,” he wrote in his 2013 letter to Berkshire Hathaway shareholders. Buffett has given this advice for years.
What does Dave Ramsey say you should invest in?
Plain and simple, here's the Ramsey Solutions investing philosophy: Get out of debt and save up a fully funded emergency fund first. Invest 15% of your income in tax-advantaged retirement accounts. Invest in good growth stock mutual funds.
What is the safest investment with the best return?
- High-yield savings accounts.
- Money market funds.
- Short-term certificates of deposit.
- Cash management accounts.
- Treasurys and TIPS.
- Corporate bonds.
- Dividend-paying stocks.
- Preferred stocks.
Is it better to put money in an IRA or 403b?
An IRA has more, and often better, investment choices than a 403(b) and IRA fees tend to be lower, sometimes significantly so. And while traditional IRAs require you to take withdrawals after you turn 70½, you may have more control over managing how you take those withdrawals than you do with a 403(b).
What does Dave Ramsey say about Roth IRA?
One, the worker contributing money to a 401(k) plan has fewer options for mutual funds from which to choose. In a Roth IRA, individuals have many more investing options. "With a Roth IRA, you're not limited by some third-party administrator deciding which funds you can invest in," Ramsey wrote.
Which retirement plan is best?
A 401(k) plan is one of the best ways to save for retirement, and if you can get bonus “match” money from your employer, you can save even more quickly. A 401(k) plan is one of the best ways to save for retirement, and if you can get bonus “match” money from your employer, you can save even more quickly.