How Do You Know How Much You Need To Save in Order To Retire?

Summary

Podcast Summary: Ramsey Everyday Millionaires

Episode: How Do You Know How Much You Need To Save in Order To Retire?
Date: August 29, 2025
Host: Dave Ramsey (with callers)
Podcast Network: Ramsey Network

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Overview:

This episode delves into a common question among aspiring retirees and financially savvy listeners: “How do you actually know when you’ve saved enough to retire?” Through a candid call-in with Chris, the hosts discuss not just the math and mechanics of retirement, but the practical realities and psychological hurdles people face in planning to leave traditional work. Dave Ramsey's signature direct advice shines in addressing both the numbers and mindset involved.

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Key Discussion Points & Insights:

1. Defining Retirement Readiness

• Chris calls seeking advice on when he can step away from work, not necessarily to stop working completely, but perhaps to take a year off and consider what’s next.
• Dave Ramsey: “When your nest egg is big enough to run perpetually.” (00:30)

2. The Myth of Passive Income in Real Estate

• Chris mentions expecting $8,500/month from rental properties.
• Dave quickly debunks the idea that rental property income is passive.
  • Dave Ramsey: “There’s no such thing as passive income… Rental property is not passive.” (00:45)
• Dave explains that vacancies and non-paying tenants are inevitable, and “in the real world,” one should budget on an estimated 70%–80% actual income (here, about $6,000/month).

3. Budgeting for Real Life

• Chris claims his expenses are minimal and he carries no mortgage or debts.
• Dave presses him to put actual numbers down, emphasizing the importance of a real, detailed budget.
  • Dave Ramsey: “Run a budget.” (01:27)
  • On uncertainty of lifestyle: “You and your wife need to sit down and go, ‘This is the price we’re going to pay.’” (02:11)
• Key advice: Don't count on ideal scenarios (100% occupancy, always-paid rents) in your financial planning.

4. Financial Flexibility and Lifestyle Choices

• Chris wonders if wanting to take a year off is “selfish” or “insane.”
  • Dave Ramsey: “Mathematically, it might be impossible.” (01:41)
  • If your desired spending is $16,000 a month, but your reliable income is $6,000, “get me some cheese with this wine.” (01:44) (Dave’s playful way to say: Don’t whine, face reality.)
• The discussion shifts to real-life trade-offs: cutting discretionary spending and adjusting lifestyle to fit available resources.

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Notable Quotes & Memorable Moments

• Dave Ramsey on Rental Income:
  “There’s no such thing as passive income… Rental property is not passive. You passive with a tenant, you got no tenant.” (00:45–02:11)
• On Facing Financial Reality:
  “Deal with your own reality, right? That's right. Pull up your actual numbers. And don't count on 100% occupancy and 100% of the tenants paying. That's an illusion, and it ain't passive, ever.” (02:11)
• On Budgeting & Planning:
  “If you can live on $6,000, you’re okay. If you can’t, then you’re not... You need to run a budget.” (01:59–02:11)
• On Lifestyle Adjustments:
  “We’re used to spending $10,000 because we go on all these trips and stuff. This year, we’re going to take off and live on $6,000. And we’re not going to go on the trips, or whatever it is. I don’t care. But deal with your own reality, right?” (02:11)

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Important Timestamped Segments

• 00:30: Dave defines retirement readiness as when your “nest egg is big enough to run perpetually.”
• 00:45: Debate about the myth and reality of “passive” real estate income.
• 01:27: Dave’s emphasis on starting with a detailed budget.
• 01:41–01:44: Dave’s “get me some cheese with this wine” quip – a highlight in dispelling unrealistic expectations.
• 02:11: Strong advice on budgeting, real numbers, and not counting on perfect conditions.

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Final Takeaways

• Retirement (or taking time off) is about numbers and lifestyle choices: know what you spend, know what you can reliably earn, and reconcile the two.
• There's no substitute for running an accurate, honest budget—wishful thinking and “passive” income myths won’t secure your future.
• The discussion is realistic, relatable, and encourages straightforward, responsible decision-making—a hallmark of Ramsey advice.

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This episode is a valuable listen (or read) for anyone wrestling with the question of “how much is enough?” and craving clear-cut, actionable financial wisdom straight from the Ramsey team.

Transcript

[A]

Foreign this episode is brought to you by Smartvestor. Connect with an investing pro near [e-mail] Smartvestor Chris is in Nashville. Hi, Chris. What's up?

[B]

Not much. Thanks for taking my call. Sure.

[A]

How can I help?

[B]

I. I guess I'm calling for a reality check or just some wisdom. In what? When I can stop working. And it's not as much stop working. It's just figure out what I want to be when I grow up.

[A]

When your nest egg is big enough. When your nest egg is big enough to run perpetually.

[B]

Well, I got some. I got some rental property. I'm closing on a deal, hopefully the end of this month. And I'll have about 8,500amonth passive income coming in.

[A]

There's no such thing as passive income. You talking about real estate deal?

[B]

Well. Well, I'm talking about rental properties.

[A]

Rental property is not passive.

[B]

I get it. Yes, sir.

[A]

Okay. All right. So you have. You're gonna have $8,000 a month net profit.

[B]

Yes, sir.

[A]

If everybody pays and if it's all full.

[B]

Correct.

[A]

So in the real world, you probably got 6,000. Well, because it's never all full, and everybody. Not everybody always pays.

[B]

Correct.

[A]

Okay. I got a bunch of rental property. Okay. I mean, I know what works, right? So.

[B]

Yeah.

[A]

So you got about 6,000 you can count on there. And what's it take for you to live?

[B]

Dude, I got no bills, no mortgage.

[A]

What's it take for you to live?

[B]

That's what I'm trying to figure out.

[A]

Run a budget.

[B]

Yeah. I mean, what is the. I mean, how do you. It's also, like, even if I don't quit what I'm doing, like, I just want to take a year off. Am I selfish for that? Is that insane?

[A]

Mathematically, it might be impossible.

[B]

Yeah.

[A]

If you need 16,000amonth to live, and you're going to try to do it on 6000 because you want to take a year off. Well, get me some cheese with this wine.

[B]

Yeah, yeah. No, sir, no, that's. My expenses are nothing. I mean, literally.

[A]

Are you single?

[B]

Yeah. No. Married, two kids.

[A]

All right, so what does it take to operate your house? Can you do that on 6,000? If you can, then you're okay. If you can't, then you're not. You need to run a budget.

[B]

Got it.

[A]

You and your wife need to sit down and go, this is the price we're going to pay. We're used to spending 10,000 because we go on all these trips and stuff. This year, we're going to take off and we're going to live on 6000. And we're not going to go on the trips or whatever it is. I don't care. But deal with your own reality, right? That's right. Pull up your actual numbers. And don't count on 100% occupancy and 100% of the tenants paying. That's an illusion, and it ain't passive, ever. You passive with a tenant, you got no tenant.