How Much Should I Invest If I’m Self-Employed?

Summary

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Podcast Summary: “How Much Should I Invest If I’m Self-Employed?”

Ramsey Everyday Millionaires — April 1, 2026
Hosts: George Kamel (“B”), Dr. John Delony (“C”) (as inferred by style), and caller Terry (“A”)

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Episode Overview

This episode tackles a common financial challenge for self-employed individuals: How should you prioritize investing for retirement, especially if you’re starting at age 60 with limited prior retirement savings?
The discussion centers around Terry, a self-employed consultant and mother to a special needs adult son, who seeks practical, actionable guidance on striking a balance between paying off her house and aggressively investing for retirement in her 60s.

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Key Discussion Points & Insights

1. Terry’s Financial Situation & Goals

• 60 years old; recently retired with a $47,000 annual pension.
• Started an LLC as a consultant earning $130,000 - $150,000 gross per year (business expenses: ~$30,000).
• House balance: $60,000; only debt.
• Primary concerns: caring for her adult special needs son, uncertainty about retirement, and starting late with investing.
• Retirement savings goal: $300,000 by age 70.

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2. How Much Should a Self-Employed Person Invest?

Recommendation:

• Immediately start investing 15% of income for retirement while paying extra toward the mortgage.
• The goal: enter retirement completely debt-free—with both the home and retirement savings secured.
• Once the house is paid off (projected in about 3 years), direct freed-up cash flow to max out retirement contributions.

Notable Quote:

“I would be investing 15% of your awesome income while paying down extra on the house. And in no time you're going to pay off that house.” — [B, 02:13]

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3. Retirement Account Choices for the Self-Employed

• Host strongly recommends a Solo 401(k) over a SEP IRA for the higher contribution limits, particularly for someone in Terry’s age bracket with “catch-up” provisions.
• For 2026, Solo 401(k) contribution limits (with catch-up) could be as high as $80,000.
• SEP IRA is “fine,” but Solo 401(k) offers more ability to catch up rapidly late in one’s career.

Notable Quote:

“I like the Solo 401K because the contribution limits are massive, especially for someone your age, because you have catch up contributions.” — [B, 02:49]

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4. Strategic Payoff of Debt

• Hosts debate the trade-off: should Terry invest everything or pay off her house first?
• Dr. Delony leans towards paying off the house quickly before investing more, to reduce risk and simplify future retirement cashflow.
• George (B) counsels that doing both—investing 15% and paying down the house—will ultimately reach the same finish line, consistent with the Ramsey "baby steps":
  1. Invest 15% of income for retirement
  2. Pay extra toward mortgage
  3. When the house is paid off, “max out retirement”

Notable Exchange:

“...I would feel an intense internal pressure to not put a penny in retirement until I could just throw everything and get that house taken off like that.” — [C, 04:08]
“I think either way…you’ll kind of get to that finish line either way. But if you're tracking through the baby steps, it's 15% until the house is paid off, and then we're maxing out retirement.” — [B, 04:15]

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5. Realistic Projections: What’s Possible by 70?

• With a $3,000/mo investment starting at age 63 (after the house is paid off), at a 10% annual rate of return, Terry could amass $362,000 by age 70. If she contributes $4,000/mo, that figure jumps to $483,000.
• The hosts stress using the rule of 72 and investment compound growth.

Notable Quote:

“If you keep making what you're making, three grand a month from 63 to 70, you'll have $362,000 at our 10% rate of return.” — [B, 04:57]

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6. Addressing Family and Legacy Concerns

• Special emphasis on setting up a special needs trust for Terry’s son, to ensure ongoing care if something happens to her.
• Advice: Consult a local estate attorney to explain options “like you’re a ninth grader.”
• The hosts acknowledge the emotional pressure, guilt, and anxiety around late-start retirement planning and legacy for dependents.

Notable Quotes:

“A lot of that type of angst is quenched when you have real information.” — [C, 06:41]
“Reach out to a couple of state attorneys in your area...have them explain [a special needs trust] to you and walk you through what this is going to cost to set up. It might be a few thousand bucks, but you will sleep so much better at night knowing you've taken care of your family and now we're on track for retirement.” — [B, 07:45]

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Memorable Moments & Quotes (With Timestamps)

• [02:49] “I like the Solo 401K because the contribution limits are massive, especially for someone your age, because you have catch up contributions.” — [B]
• [04:08] “I would feel an intense internal pressure to not put a penny in retirement until I could just throw everything and get that house taken off like that.” — [C]
• [06:41] “A lot of that type of angst is quenched when you have real information.” — [C]
• [07:45] “...you will sleep so much better at night knowing that you've taken care of your family and now we're on track for retirement.” — [B]

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Action Steps & Final Takeaways

• Invest 15% of income for retirement now, even while paying extra on the mortgage.
• Pay off the house ASAP to remove risk and free up future cash flow.
• Consider switching to a Solo 401(k) for maximum catch-up contributions.
• Use online calculators (such as the Ramsey Investment Calculator) to run future projections and solutions.
• Set up a special needs trust for your dependent child; consult with a knowledgeable estate attorney who can explain everything simply.
• Get facts on paper—real information calms anxiety and clarifies your path. As Dr. Delony says, “Facts on paper give you a path forward.” [08:41]

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This episode is a candid, practical coaching call that reassures listeners: it’s never too late to take control of your finances, and every dollar invested and debt eliminated can have a dramatic impact—even if you’re starting at 60. The key message is consistent: get informed, follow a plan, and don’t let fear—or lack of information—paralyze your progress.

Transcript

[A]

Foreign.

[B]

This episode is brought to you by SmartVestor. Connect with an investing pro near you at RamseySolutions.com SmartVestor let's go to Manchester,

[C]

New Hampshire and talk to Terry. What's up, Terry?

[A]

Hi. Thanks for taking my call.

[C]

Of course. Thanks for calling. What's up?

[A]

So I'm just looking for a little bit of advice. I am 60 years old. I just ended a career in which I'm receiving a pension. And I've started a second career which I'm hoping to work for about the next 10 years. And I'm just wanting to make sure I'm on the right track as far as what I should be investing over the next 10 years.

[C]

Very cool. What's your new side hustle? I mean, it's not even a side hustle. What's your new career?

[A]

Yeah, I'm consulting. So I started an llc. I'm debt free except for my house. I only owe about 60 on my house. But all I have right now is that pension. It's about 47,000 a year. And I know that's not going to be enough. And I'll tell you, I don't have anything else because of a couple of things. First, I just found you guys a few years ago, but I also have a special needs adult son. So throughout he's in his 30s. So throughout the years when things come up and every time I think I have a little bit of money to set aside, something comes up, right? So then I have to spend or I do spend. So here I am. And I'm getting a little worried because he continues to have needs. But I just want to make sure I'm on the right track. So I have a 47,000 pension. My gross income is about 130 to 150 a year. I have expenses from my business of about 30k, I'd say. And I'm just trying to figure out how much do I put aside, how much do I try to invest between now and then to feel like, comfortable. I feel like it should be like my goal should be about 300,000 in an investment account. Yeah.

[B]

Okay. At 70. So that's your goal. And you still have the mortgage. And the goal for, I would say let's go into retirement completely debt free, house and everything. And so I would be investing 15% of your awesome income while paying down extra on the house. And in no time you're going to pay off that house.

[A]

Okay.

[B]

With this income. Right. In the next few years, it's gone. Which means the following seven years we can now max out retirement options, like for you, a self employed person, a solo 401k.

[A]

So I tried to ask my tax person and my investment guy about that and they both were just like, you don't need that.

[B]

What did they say you need?

[A]

They have me right now in a. I rolled, I rolled some 403B money into a SEP IRA.

[B]

Okay, that works too. I like the Solo 401K because the contribution limits are massive, especially for someone your age, because you have catch up contributions. So you're talking, I think it's 80 grand this year for someone in your shoes.

[A]

Okay.

[B]

Which is insane. You can really catch up on retirement with that kind of, with those kind of numbers. And so I would look into that as an option.

[A]

Okay.

[B]

On top of your ira.

[C]

Terry, I'm gonna ask George a question on your behalf. Okay? He's smarter than I am at this stuff. So, Terry, how old are you again?

[A]

60.

[C]

60. All right, George. My gut tells me that if I was in her situation and I suddenly stumbled on, not stumbled on, I created 130 to $150,000 in extra value, right? So in New Hampshire, I'm gonna guess you'll, you'll take home 80 of that after taxes, and then you're gonna have 30 of that off the top. So you're gonna have $50,000. My, I, I would feel a, an intense internal pressure to not put a penny in retirement until I could just throw everything and get that house taken off like that. Like clear my house at 60 grand, work maniacally to get that risk taken off. So I've got that taken care of. And then I would spend the next however many years just socking every penny away and trying to live off that 47. Could I find a world where I just condensed my expenses, my travel, all that kind of stuff, lived off that pension and I just started saving everything. Is that bad?

[B]

I wouldn't say it's bad. I think either way, if you did it on paper, you'll kind of get to that finish line either way. But if you're tracking through the baby steps, it's 15% until the house is paid off, and then we're maxing out retirement. And so I like the idea of you flexing this sa, this investment muscle, because you really haven't. It's been the pension the whole time. And so you'll get used to not seeing that money in your bank account. Instead it's going towards your future. And I can crunch the numbers for you here. Let's say you pay off the house in three years, could you pay it off by 63, but 20 grand a year towards it?

[A]

Yeah, I can.

[B]

And then after that, the mortgage is freed up on top of the money you can throw. How much could you throw a month after that? If you keep making what you're making,

[A]

three grand a month at least.

[B]

Okay, so three grand a month from 63 to 70, you'll have $362,000 at our 10% rate of return.

[A]

And then I just let that sit, really?

[B]

Yeah. If you let it sit, I mean, what we've seen in the stock market rule of 72, it'll double. If you get a 10% rate of return, that money would double every 7.2 years. So if you didn't need it, you could live off of your pension for a few years. It's just going to continue to grow. And if that's in a Roth 401K, it's going to be completely tax free because you used after tax dollars to fund it. Okay, so think about that. It's like net income. 3, 360 grand.

[C]

And then if you create a special

[A]

needs trust, this isn't, this isn't like pie in the sky.

[B]

No, I would, I would tell you if you are way out of line, but you told me Your goal is 300 grand in that investment account plus your pension, you will be okay.

[A]

Okay.

[B]

And if you do four grand a month, you'll have 483 grand. And so you can play around with the numbers using our investment calculator to kind of figure out what that future is going to look like.

[C]

And I would create a special needs trust for my child that if something

[A]

happens, I'll need to find out more about that because I feel like I never have enough money to do that.

[C]

Okay, yeah, I would, I would dig into that. But if you end up with 400k in retirement funds or retirement accounts, plus your pension, and I don't know how pensions work with trust and with special needs trust, I don't know whether it would be transferable or not.

[B]

There's survivor benefits, something like that, but

[C]

I would dig in and get every bit of that information. And by the way, some of that panic is the wrong word, but that growing gnawing, it's tiny right now, but it's getting bigger. That sense of angst, right? Like you're 60 and then you're, you're gonna blink and you're gonna be 70 and your special needs child will be 40. That it, it feels like guilt almost Like, I need to take care of them. What am I doing? I didn't make enough money. And you start like, a lot of that type of angst is quenched when you have real information.

[A]

So I hit the nail on the head with that because that's why I'm feeling a little bit frantic about yes. Exact thing you just said.

[C]

So finding some and saying, I want to learn about this. And here's the words I use now. I want you to teach me like, I'm a ninth grader and I ask folks that about any purchase I'm making, if I'm going on a hunting trip, if I want to learn about this electric circuit thing, I want to learn how to work a lawnmower. I ask people teach this to me like I'm in ninth grade and I walk away learning how to actually do this thing.

[A]

Okay.

[C]

And at least, even if there's no way you're going to leave that conversation feeling great, right? Like, oh, he's going to be like, you're going to realize, oh, I got a decade's worth of work to do, but you'll have real information and an actual lit path on what direction to take.

[A]

Okay.

[B]

I think you're going to feel a whole lot better when this is knocked out. I would reach out to a couple of state attorneys in your area and just get a feel and go with the one that you like, that you trust and have them explain it to you and have them walk you through what. What is this going to cost to set up? It might be a few thousand bucks, but you will sleep so much better at night knowing that you've taken care of your family and now we're on track for retirement.

[C]

And George, this goes when it comes to finances, when it comes to retirement, when it comes to future. That angst that we, that we all feel. And the closer you get to the third and fourth quarter of your life, the bigger that anxiety gets. You cannot avoid it or work around it. There's one path only, and it's through it, right? And often that path is lit with real information. And so getting real information on a special needs trust, using the Ramsey retirement calculator to say how many dollars will equal this many dollars. Right?

[B]

Getting facts on paper because your emotions will cloud your judgment and you'll just

[C]

feel over all the time. And facts on paper give you a path forward.