Should We Change Our Investing in Baby Step 7?

Summary

Podcast Summary: Ramsey Everyday Millionaires

Episode: Should We Change Our Investing in Baby Step 7?
Date: December 3, 2025
Hosts: Ramsey Network – Dave Ramsey, Jade Warshaw, Ken Coleman
Caller: Ann from Phoenix, Arizona

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Main Theme & Purpose

In this episode, the hosts guide Ann and her husband, recent achievers of Baby Step 7, on how to adjust their investment approach post-debt freedom and mortgage payoff—especially with the added complexity of planning lifelong financial security for a special needs adult child. The conversation delves into transitioning from “intensity” to “intentionality” with money and navigating the practical, emotional, and strategic challenges in this new stage of financial independence.

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Key Discussion Points & Insights

1. Transitioning from Intensity to Intentionality (01:00–02:10)

• Adjustment Period: Ann shares how new and even uncomfortable the feeling of security is after years of financial tension; the hosts reassure her this is normal.
  • Quote (Ken): “A lot of Baby Step 7 folks are still trying to adapt from intensity to intentionality… it’s going to take time for your nervous system to adjust because you have been.”
• Guidance: They emphasize being intentional rather than frantically driven—a crucial shift for newly debt-free families.

2. Snapshot of Ann’s Financial Picture (02:28–03:14)

• Ann and husband are 60 and 63, with about $403k in retirement accounts, and a paid-off home worth $437k.
• Income: Ann earns $250k; husband does part-time real estate ($10k–$15k/year) and is a primary caregiver for their special needs daughter and other family.
• Key goals: Plan for retirement in 7 years, ensure care for their daughter, and balance generosity with security.

3. Retirement Projections and Needs (03:29–06:24)

• Ann is contributing 19% of income to retirement accounts (~$3,800/month).
• Conservative projections: In 7 years, expect ~$1.3–1.4 million in retirement savings, not including the home.
  • Quote (Jade): “I think you’re going to be fine if you keep doing this in the next seven years… The question you need to ask is, what’s it going to cost annually for her [your daughter’s] care?”
• Hosts walk through the inheritance and care plan for their special needs daughter, highlighting the importance of ensuring her housing and annual support needs are covered by investment income and assets.

4. Increasing Financial Margin – Spousal Earning Potential (06:31–08:18)

• Ken addresses the husband’s lower income and potential for more earnings via real estate, suggesting that even a moderate increase could mean an extra $1M+ into investments over a decade.
  • Quote (Ken, 07:13): “If I was hanging out with your husband, I’d pull him aside and go, ‘Hey, bro, no disrespect, but your wife is seriously crushing it… you can make way more than $10–15,000.’”
• The message is honest but supportive: encouraging contribution and expanded focus for the success of the whole family, especially their vulnerable child.

5. Tax Strategies & the Roth Conversion (08:18–08:54)

• Jade recommends consulting a SmartVestor Pro about rolling traditional retirement funds into Roth accounts ASAP for tax-free growth and to ease future financial management for children.
  • Quote (Jade, 08:18): “…get on with one of our SmartVestor pros and talk about if it makes sense to convert some of these traditional funds to Roth funds so… they're not paying taxes on it.”
• Ann mentions her funds are tied up in current employer plans for now but is planning to convert gradually in retirement.

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Memorable Quotes & Moments

• Ken (07:13): “If I was hanging out with your husband… you can make way more than $10–15,000, number one, and number two, you should be. Let’s just say he listened to me… got serious about selling real estate and made $100,000 and all of his money went to juicing this retirement. If he does that for another 10 years, that’s a million dollars.”
• Jade (05:40): “You have a paid-for home so great that your special needs daughter is going to have a place always to live… If you and your husband can live comfortably off of the interest on this, then you’re going to have this wonderful nest egg that is going to continue to grow for her care.”
• Ken (01:00): “A lot of Baby Step 7 folks are still trying to adapt from intensity to intentionality… so new at this, right? …It’s going to take time for your nervous system to adjust.”
• Jade (08:18): “…convert some of these traditional funds to Roth funds so… that money can continue to grow tax free. We want that for them. We don’t want them to have to deal with that as they take your inheritance one day.”

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Notable Timestamps

• 00:17: Ann introduces her situation—new to Baby Step 7, wants guidance with retirement and planning for special needs daughter.
• 01:00: Discussion on emotional transition from intensity to intentionality in finances.
• 02:28: Deep dive into the family’s current financial landscape.
• 03:29–05:39: Monthly contribution breakdown and retirement projections.
• 06:31–08:18: Ken challenges the husband’s earning potential and the impact additional income could have.
• 08:18–08:54: Roth conversion and estate planning advice.

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Takeaways for Listeners

• Baby Step 7 is about purposeful stewardship, not just relentless saving.
• When planning for dependents with lifelong needs, consider not just totals, but the structure (e.g., tax implications, estate transfer, and annual costs of care).
• The emotional transition to “enough" after years of financial struggle is real—give yourself grace.
• Increasing household income—even modestly at this stage—can profoundly change long-term security, especially when caring for vulnerable family members.
• Tax strategies (like Roth conversions) are crucial for ensuring a simple, tax-efficient legacy.

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Tone: Practical, motivational, and candid—balancing hope, realism, and accountability.

Summary by: Ramsey Everyday Millionaires Podcast Summarizer

Transcript

[A]

This episode is brought to you by SmartVestor. Connect with an investing pro near you at RamseySolutions.com SmartVestor let's go to Ann in Phoenix, Arizona. Ann, how can we help?

[B]

Yes, I have a question about how much, what the percentage I'm currently putting into my retirement. I'm going to be 60 this year. My husband is 63 and we currently have 400. We have about 400,000 in our retirement. But we also have a special needs young adult child that we know we want to plan for. We've just gotten to baby step seven two months ago. So I'm feeling still like I should hold on really tight or can I relax a little bit or where should I go? And I'm looking for some guidance.

[A]

Congratulations. First of all, let's not just fly by baby step seven. How does that feel?

[B]

It feels amazing. But I have lived until I found you all pretty hopeless about ever retiring. So I'm adjusting in my mindset to like, can I take my family on a vacation?

[A]

Well, the answer is yes.

[B]

So I just, and I always worry about the future for my daughter. I have a kid, my oldest, who has special needs and probably will never live independently.

[C]

Sure. Okay.

[A]

Okay. Couple quick things. One, I want you to. On the Ramsey cruise, we had all these, you know, folks from the tribe that, you know, or baby steps four through seven. And one of the things that we kept coming into it was funny. We would talk about it on stage. We saw it in conversations on the boat. But a lot of Baby Step 7 folks are still trying to adapt from intensity to intentionality. And you're so. Yeah, you resonate with that. And you're so new at this. Right. You've been baby step seven for two to three months. So number one, it's going to take time for your nervous system to adjust because you have been.

[B]

Yes, I feel that.

[A]

Right. Yeah. And so I'm just calling it out to go. This is normal. Okay.

[B]

Okay.

[A]

It's a function of how intentional you have been with intensity. Now we want to begin to downshift from all this intensity and go, here's the good news. We're going to be great. Now we want to be intentional to take care of our daughter. So give us a snapshot of what you guys have in retirement accounts as of today.

[B]

So as of Today, in my 401B, I have about $357,000. We just sort of discovered, you know, feels shameful, but whatever. Roth, IRA. So I'm, I've got 47,000 in my Roth 403B. And. And my Roth IRA. Individual Roth IRAs for my husband and I.

[A]

Okay. Does he have any, or are you just giving us the totals?

[B]

That's the total. So it's all. That's our total is about 403.

[A]

How old are you?

[C]

Both?

[B]

60 and 63.

[C]

And what's your house worth?

[B]

Primary. Pardon me?

[C]

What's your house worth?

[B]

437.

[C]

Okay.

[A]

And you're about ready to tell us something else. Go ahead.

[B]

And I'm the primary income earner. He does caretaking for parents and our oldest child.

[A]

What is your income?

[B]

About 250,000.

[A]

All right. That's great news. What in your mind has been the age by which you said, I'm out of here. See you later, folks?

[B]

Well, I thought I would never retire before. I got some hope. So when I've been looking at it now, if I were to retire in seven years with that rule of seven, I think based on my calculations, I'd probably end up with about. And my current rate of retirement savings, which is about 19% of my. Of our income, I think I'd have about 1.4, but I just don't know if that's enough.

[A]

Well, so 1.4, that doesn't include the house, right?

[B]

Not including the house.

[A]

All right, so that gets us at. Let's just round up to 1.9. So we're sniffing 2 mil at that stage.

[C]

How much are you contributing monthly?

[B]

Monthly, I'm putting in 90% of my income. I'm sorry, 19% of my income into my retirement. So that's my match, my Roth 403.

[C]

Do you know the number of that? Just so I don't have to do the math right quick.

[B]

Oh, I'm sorry. Yeah. My monthly right now that's going in to Ross 403 is 2,622.

[C]

Good job.

[B]

And then, and then I have. Going into my match is about 1,000, 12, 10.

[C]

Wow.

[A]

Okay, so can we round that up, Jade, to what do we got?

[C]

Okay, so, yeah, we got 3,800. Like, yeah. Every month going in there.

[B]

Yeah.

[A]

So what's going on here? Jade has got her trustee calculator out and she's doing a little investment calculator to run these numbers. What do you got, Jade?

[C]

Okay, yeah. So if you continue to do this, you're. You're pretty close to what you said. You're pretty close. I did a really conservative rate of return for the haters, but, you know, I think that you're going to actually do better. So let Me just, I think you're going to be fine if you keep doing this in the next seven years. I have 1.3 million. You said 1.4. Great. Same thing, right?

[B]

Yeah.

[C]

The question you need to ask yourself, and I think this is what Ken also was getting at, is you. You're thinking about your special needs daughter. You have a paid for home so great that your special needs daughter is going to have a place always to live. Right. If you pass that along, then for you, if you and your husband can live comfortably off of the interest on this, then you're going to have this wonderful nest egg that is going to continue to grow for her care. And so that's kind of the way to think of this is what is it going to cost annually? What? Once you and your husband, you know, have beamed up, what's it going to cost you annually for her care? And is she able to draw that off of your nest egg without touching it or without, you know, deeply deplenishing it? And I think that, and knowing that.

[B]

We also have another child so they would split whatever we've got, that's the other younger child.

[C]

Good point.

[B]

Yeah.

[A]

Well, the only way to change this is you're making a good salary. The only way to change this in my mind is your husband to get a little bit better paying job. I appreciate what he's doing, but if he can make, what's his income, I'm guessing it's what, less than.

[B]

So he does part time real estate. So it varies, you know, so it's probably he's doing, you know, maybe six houses a year. It's not a lot, but you said.

[A]

Caretaking of some sort. What's he make a year? Give me an average, roughly.

[B]

He's probably making 10 to 15,000 a year.

[A]

Okay, listen, I don't want to be, I don't want to be unkind, and this is not unkind, but I'm going to shoot you really straight. Are you okay with that?

[B]

Yeah.

[A]

Okay. If I was hanging out with your husband, I'd pull him aside and go, hey, bro, no disrespect, but your wife is seriously crushing it. And you guys have a really unique situation and I'm not judging you at all, but you can make way more than 10 to 15,000, number one, and number two, you should be. Let's just say he listened to me. He's like, you're right, Ken, I need to step up. Let's say he got serious about selling real estate and he made 100,000 and all of his money went to juicing this retirement. If he does that for another 10 years, that's a million dollars. 100,000 a year. I'm not pulling crazy numbers out of my, you know what in my hand.

[B]

Yeah, yeah. All right.

[A]

So this is all possible. That's the answer. We put an extra million dollars in this situation, Jade, now. Now we don't have to worry about our adult child who is going to need special care.

[C]

Exactly.

[A]

I don't know why he's not fired up to do this. I'm not judging him and. But I am going to shoot you really straight and go. He should be making way more money, and every nickel of it should be going into Jade's fancy calculator.

[C]

Yeah, and I also want you to get on with one of our smartvestor pros and talk about if it makes sense to convert some of these traditional funds to Roth funds so that when the time comes that they are drawing on this money, they're not paying taxes on it and they're able. Do you see what I'm saying? That money can continue to grow tax free. We want that for them. We don't want them to have to deal with that as they, you know, take your inheritance one day.

[A]

And I'd play.

[B]

I'd play that conversion process. Right now, everything's tied up in my current employer's plan, so until I retire from that, I won't be able to convert. But that's my thought, is to convert over time.

[C]

Definitely. Yeah. The sooner you do it, the worse the tax hit.

[A]

So you, you've done a great job. Replay that call for your hubs. Hopefully you don't get upset at me. I think you didn't mean any harm, Ken. No, no, I just think that that is a massive play right now. If I was in their shoes, that's exactly what I would be doing, right?