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- [00:06]
A
This episode is brought to you by SmartVestor. Connect with an investing pro near you at RamseySolutions.com SmartVestor all right, let's go to Anna, who's joining us in St. Paul, Minnesota. Anna, how can we help?
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B
Thank you for taking my call. We did the baby steps. We have no debt. We're less than a month away from my husband's retirement.
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A
Wow.
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B
Now we want to use our 401k as part of our retirement plan, but we just don't know where to go and whose advice to trust. And we don't want to run out of money.
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C
Yeah, it's a good fear. How old are you guys, anna?
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B
I am 60 and my husband's almost 67.
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C
Oh, great. Okay, how much do you guys have in your 401k?
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B
It's just a little over 450,100.
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C
Okay, 450. And is that all the retirement you guys have or do you guys have a Roth IRA or anything else?
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B
I have a little, but not very much. I didn't work very much.
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C
Okay. And any other accounts or is that the 450 which you guys will be.
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B
Living, is the, that is it for the Social Security and I do some odd jobs.
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C
Okay. Okay. Do you guys have, you guys run a budget on how much household expenses and all that you need a month?
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B
Yes.
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C
Okay.
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B
I. Between about 4,002, 200amonth.
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C
42. And how much do you guys get from other funds like Social Security and all of that?
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B
I think it's, let's see, 30, 400amonth.
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C
Okay, great. So you're not looking at, you know, way too much to pull out just to sustain life besides like a trip or something. But just like what you guys need month to month, I mean it's not, yeah, it's not that much that you're looking at. So yeah, when it comes to the actual running the numbers and everything, a couple of things. One, I would sit down with a Smartvestor pro. I would have at a financial advisor in your corner just to look over, especially where you guys are age wise and stage of life, to be looking over your whole financial picture. So everything from estate planning, you know, anything with taxes, these investments, your home, I mean, all of that, they really can get a good picture and help you get a really detailed plan that will make you feel, I think, really secure because you're going to be seeing numbers and knowing exactly what's going on. So you can go to ramseysolutions.com and check out a Smartvestor pro we have, you know, many in your area, Anna, so I would do that. And then also, I mean, honestly, when you're looking at the math of it, we don't know exactly what the market's going to do year to year. But kind of one of the, one of the rules with investing, if you think if you don't touch the principal, then in this 450, it doubles every seven years. It's kind of like the rough math you can play. So it'll be 900,000 in seven years and then 1.8 million. And that's really, you know, not touching that principle is going to be key in order for that math to work out. But you guys can, you can even just go on Ramsey Solutions.com and our investment calculator and plug in some of these numbers too, and to know, okay, if the market on average is making, you know, you can do, you know, 8, 9, 10, 11% on what your money probably will make on average over the long haul, you can see how much interest is gonna be gained and you guys living off that. Cause I think the key really with investing, if you want this to go the furthest, is not touch that principle. And it's really that interest that you guys are using to be living off of. And the encouraging thing, you know, is that you guys, there's not gonna be, there's not a ton that you're needing month to month. I mean, it's like not even $2,000. So I think you guys are gonna be completely fine. But I do, I think you would feel better, I would feel better if I were you, is to be able to look at everything, my whole financial picture. And honestly, a smartvestor pro could sit down with you and do that. And so that's what I would do. I recommend this for everyone is to get a someone, a financial planner in your corner because it is so helpful to look at the bigger picture. And that's really what they're going to be able to walk you through and do. But just know, you know, on the front end that you guys know what your expenses are, which is great. You know, what's coming in outside of investments. And then to know, okay, we're not needing a ton month to month that we need to live off of. So you're not even really going to touch the principle when it comes down to it, which is great.
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A
Yeah. And I think Rachel's absolutely spot on. I would only add that when you're sitting with a smartvestor pro, you really want to look at this number and you want them to help you project to where you understand what a low output would be as far as interest, medium and high. And then I personally would go, okay, let's, let's just do our planning on what a low number would be.
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C
Be conservative in it to Rachel's point.
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A
To be very conservative so that we're not touching that, the principal. And so then I would do whatever it takes, part time job, you know, cut some expenses here and there just to leave that nest egg, that, that alone. Leave that alone if you can, for as long as you can.
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B
We have month, we have money in a money market too for like our emergency or like you said, if something comes up. We have about 60,000 in that.
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A
Perfect. So that's going to keep you from most likely touching anything for emergency. That's a pretty good amount. So again, you're looking at your month to month expenses. What do we live comfortably with? And we're going to make up the difference so that we try to not touch that principle. And that's the goal. But you got to get with that SmartVestor Pro, somebody who you trust, who explains it to you in a way that you guys go, oh, totally get this. Here's what we think we ought to do. And then we make up the difference. So you guys are in good shape. You just, what's, what's missing from this equation for you going forward is knowledge. Just really understanding the numbers.
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B
And Ramsey Solutions, the smartvestor Pro is somebody they endorse to go talk to.
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A
Yeah. So if you go to ramseysolutions.com and you click on Smartvestor Pro, these are independent financial folks. It's just that we have vetted them so that they're advising people right within our values. But we don't give investment advice. You know, we can't do, we don't do that. So these people are, are trusted in the sense that we know that they give advice that Dave has given for decades. Okay. And then you vet them yourself as well. So yeah, go interview three or four, sit down with them. And you got some chemistry there, you know, like, you know, I'm sure you, you really trust the lady who does your hair, Anna. Yeah, I think it's the same process. However you came about picking her. I know Rachel's very finicky with who touches her hair. So that's a process. Whatever you want it to be.
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C
Yeah, but have somebody, Anna, remember that has the heart of a teacher, is what we always say, not the heart of a Salesman. And these SmartVestor pros should have that. But I want you to fully understand after meeting with them to the point that you can teach someone else what you're doing. Right. Like, I want you to be able to know that. So ask questions. Questions. If you get a weird feeling about somebody and you don't like them, don't use them. Right. Trust your gut in it. But having. Yeah. Someone in your corner, I think is one of the best things that you can do long term for you guys just to help. And we meet with ours once a year. Ken Winston and I do the same thing and we look at everything and it just. There's something about having a third person that knows every number, knows where everything is invested, and they can even make changes in a great way to help you even more. You know what I mean? Some of this stuff could be in, like, really low risk, you know, investments, and they could maybe up it a little bit and you can even make more, depending on what everything's in. So having someone in your corner in that way is smart.
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A
Yeah. And we can't underestimate enough this process. When we say go meet with three or four different investment professionals, we mean that that's not just a rule of thumb. The reason is, is because chemistry matters, trust matters, all of that. And I joke about the person doing your hair, but I think it's the same thing. It's like you're just not going to go to somebody who you don't like or you don't think is going to do a good job, or every time you make a request, they talk you out of it. We just have to apply some common sense here. And I don't think we can, we can really accentuate that enough that to your point, do you understand what it is that your investment pro is telling you that you should do?
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C
Yes.
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Because if you don't understand it, don't agree to it.
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C
That's right. No, under. Yeah, the. Fully. And I think too, this is. This can be an intimidating industry to kind of tap into if you're not used to meeting with someone because there's kind of a jargon, you know, there's a language, you know, there's all this stuff around it. But again, the, the people that we want our listeners to be sitting down with and advising is someone that's not going to turn their nose up. They're not going to make you feel dumb or stupid for asking questions. They are going to be extremely humble people that are going to help you and be advised in the right way. They're not going to try to sell you on a reverse mortgage or, you know, doing something so stupid that it's within the values of, yes, let's get our house paid off. Let's live below our means. Let's, you know, here are my financial goals again. Like, what are you guys wanting to do? And how can we make this 450,000 stretch as far as we can to do the things that we want to do with our lives? And so someone that's on your team in that corner, that's. That's what we're looking for.