You may have seen Dave Ramsey’s viral rant in response to a caller questioning his advice on 8% withdrawal rates but has an article on his website that praises the 4% rule. I interviewed Jay Disberger, from Kansas City who called into the Dave Ramsey Show and led to Ramsey’s meltdown.
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Dave Ramsey, a well-known financial expert, recently had a viral meltdown on his radio show over the 4% rule for retirement savings, and now the caller at the center of the controversy is speaking out. In an exclusive interview with Jay Disberger, the caller who challenged Ramsey on his advice, we dive deeper into the heated exchange and the implications for the personal finance community.
For those who may have missed it, the viral clip shows Ramsey getting visibly agitated when Disberger questions the 4% rule, a widely accepted guideline for determining how much money retirees can safely withdraw from their savings each year. Disberger, who saw flaws in the rule and the assumptions behind it, found himself at odds with Ramsey, who staunchly defended the principle.
In the interview, Disberger shares his thoughts on the contentious conversation and offers insights into his own beliefs about retirement planning. He explains his concerns about the 4% rule and why he felt compelled to challenge Ramsey on the topic. Disberger’s perspective sheds light on the complexity of retirement planning and the need for critical thinking in the field of personal finance.
The controversy sparked by the viral clip has reignited discussions around the 4% rule and its relevance in today’s economic landscape. While the guideline has been a cornerstone of retirement planning for decades, critics like Disberger argue that it may not adequately account for factors such as inflation, market volatility, and longer life expectancies.
The interview also delves into the broader implications of the clash between Ramsey and Disberger. It raises questions about the responsibility of financial experts to engage with differing viewpoints and adapt their advice in response to changing circumstances. The exchange serves as a reminder of the importance of open dialogue and continuous reevaluation of financial strategies in an ever-evolving world.
Ultimately, the interview with Disberger offers a valuable perspective on the ongoing debate surrounding the 4% rule and the larger conversation about retirement planning. By speaking out, he has sparked a much-needed conversation about the complexities of personal finance and the need for a nuanced approach to retirement savings.
As the personal finance community continues to grapple with the fallout from the viral meltdown, Disberger’s insights serve as a timely reminder that there is no one-size-fits-all solution when it comes to retirement planning. It is essential to critically evaluate financial guidelines and adapt them to individual circumstances. In doing so, we can better prepare ourselves for a secure and fulfilling retirement.
I've been a fan of Dave Ramsey since 2008, and I am also a "Financial Coach Master Trained" person by the Ramsey network. I have NEVER once heard Dave mention "sequence of returns" risk. And it is a genuine risk. I'm afraid I also have to disagree with Dave on the use of credit cards. I put everything on one card, pay it off monthly, and get about 4 free airline tickets a year, on stuff I'd be buying anyway. Dave is also DEAD WRONG about not contributing to your 401K when you have a company match. THAT is a 100% return on your investment immediately. So I advise folks to only contribute up to the company match, and then focus on your emergency fund and your debt snowball. This young man mentioned the "Money Guy" channel. I recommend them as well.
I’m confused. If you have 1 Million in 3 paid for rental properties, and are charging $2500/month in rent for each one (on the low side), that’s $90,000/year which is 9%. Take 4% ($40,000) off for inflation, and you have 5%, but the property should appreciate at about the same rate of 4%. So wouldn’t it just be 9%? Can someone please explain what I’m missing?
In fact, if you decide to retire overseas, such as Thailand, the Philippines, South Africa, Panama, or Costa Rica, you don't need all the millions of $ they're all talking about
Dave Ramsey has helped millions of people and is a voice of financial common sense. However this shows that you cannot blindly follow someone’s advice. Have been confused about the 8% versus 4% withdrawal rates. Watched a few videos that opened my eyes. Hopefully Dave will be opened minded enough to have a conversation with you or maybe the Money Guys who I have been gravitating towards their advice in recent years.
My brother is a mathematician with a masters and doctorate in Mathematics. He has analyzed this subject back in is mid to late 20s. He came to the conclusion that if you want to be sure that you never run out of money in retirement that you live on 2% of your savings. That means if the politicians completely screw up and the world falls, you will still have money to live on. In fact, he says that you can retire when:
1. You are 100% out of debt. You house is paid for and you have zero debt.
2. When you can live on only 2% of your savings.
This takes living frugally. They drove inexpensive cars. They took basic vacations if they went on vacations. They did not ever waste money.
His analysis also determined the best way to invest (growth mutual funds-he has a lot more to say about investing but I am simplifying here) and you should invest long term to reduce your tax burden and reduce investment headaches.
I too am a big Ramsey fan and I agree that spending 8% of your savings each year will end in disaster. Dave is wrong. You need to look at each person’s individual situation. For example, I own rental properties that pay a nice income. I am 60 and recently retired. I still have kids in high school and college but once they are both out of college, my wife and I can live on the rental income. We will not have to raid our securities. My situation is probably different than yours.
By the way, my brother had a good job making excellent money in Silicon Valley but today at 73 yrs old, he and his wife are worth millions and millions and millions of dollars and still live the frugal lifestyle allowing their net worth to grow. I don’t have evidence of this next statement but I am willing to bet that my brother is worth a lot more than other people who had his same income. It takes delaying gratification and frugality and dedication to the long term process of saving and investing. Once you are rich, you are so use to living frugally that you continue that lifestyle.
The 4% rules, in my opinion is a good one. But, if you really want to be sure you won’t run out of money in your old age, then live on less then 4%. Every bit less will allow your nest egg to grow more.
Well..TECHNICALLY, Ramsey is correct. If you only took 8% from a portfolio, you would literally never run the balance to zero. HOWEVER..your starting portfolio balance would have to be so GIGANTIC, in relation to your necessary spending requirements..so that, during negative return years, you would have enough set-aside in cash from when you took an 8% withdrawl during positive return years..theoretically, that could result in a "perpetual portfolio". However..the vast majority of people will NEVER accumulate a portfolio of that size.
Can someone post the link of the viral video?
Hey you did a great job on the call and brought awareness. Ramsey is not always right and should be questioned by his audience
Hello, at 26:21 min you said his listeners believe they'll get 12% year after year. This isn't true. This is the average of the S&P500 over the last 70 years. During the call Rachel asked what if the ROR is 10% he said leave 4 take out 6. You also said they are only going to save about half as much as they really should save. As a follower of the baby steps one would invest 15% and once your mortgage is paid off the plan would be to invest as much as possible/maxing it out.
Great conversation just wanted to point this out.
I used to enjoy listening to the DR podcast. But for several months, I've heard too many angry rants where he's just a bully who's time has run out. He is becoming unhinged and his mini-me hosts aren't allowed independent thought. Even Ken who I used to like, has become generally rude. Common sense and living below your means will never go out of style, but DR sure will.
All of this is completely wrong.
Dave is great at getting people out of debt but Dave is absolute shit at retirement advice – hes either ignorant of sequence of returns risk or he stupidly believes the market gives linear returns every year when it obviously does not and you CANNOT use historical AVERAGE returns for determining safe withdrawal rates – it's criminal and Ramsey needs to apologize – ON AIR – for giving this ignorant advice AND trashing his employee for HIS advice to a 30 something about FIRE
retirement withdrawal rates – Dave totally blew it on that show and totally showed what an arrogant ass he can be.
Love this guy!!!
Sounds like the caller was trying to ambush Dave on his own show. He knew he had to misrepresent his actual topic to get through the call screener. He also knew the 8% topic was a hot button issue with Dave. While I adamantly disagree with Dave on his 8% figure, there's NO WAY the caller would change Dave's mind on his own show. Dave's been doing this gig longer than the caller's been alive. You don't build a multi-million dollar company taking advice from those claiming to seek your advice.
Jay Disberger is very smart and articulate
Thanks for your time and wisdom gonna head to Ken Coleman to shift a little I really love and honor Dave Ramsey and his entire team
I just have to say I paid off 55 k in credit cards in 3 years about . Following his plan
lol, you guys and risk. what's the big scarrrrry risk with 8% could you quantify it with real people?
A. who do you know that retired at retirement age with >1m and "ran out" of money?
B. what's the risk? people would just have to go on gov programs, that's not ideal but you drastically overstate the problem.
if you want to say 4% that's cool but there's a lot of theoretical behind it that's not admitted.
The big question is whether Dave will have the humility to go back on and admit he was wrong in his math or in his attitude… my money is on his ego not allowing him to and him just ignoring it… or even doubling down.
I understand all the maths, but I do also get where Dave is coming from. Making decisions on the worst possible scenarios is not always that smart. It neglects the fact that most scenarios result in capital growth. It neglects the fact that responding to market conditions allows greater withdrawal rates. It neglects the fact that many will have died before they ran out of money. It neglects the fact that sequence risk is key and there may be choice on retirement date. It neglects the fact that many retires will want to spend more money at the beginning than will spend later. If you don't factor all these things into your calculation, you end up with very low withdrawal rates, which are not really motivating. 3% is a joke. Rather than criticising Dave, why not focus on these issues?
I believe this topic was back checked and if you start in 2001, taking 8%, your out of money in 2011. This mathmatical proof should be published on youtube.
I believe Dave is sticking to this 8% rule for 2 reasons:
#1- He's stubborn, and can't omit he's wrong.
#2- It directly ties into this debt philosophy; he's doubting down on being debt-free as the #1 key by underemphasizing retirement.
The distribution phase in retirement requires a different mindset than the accumulation phase leading up to retirement. It's less about growth an more about the income that can be produced from the portfolio. High yielding investments like Dividend Aristocrats matter.
Dave is always right and never wrong….Ramsay endorsed comment.
Dave Ramsey is a tool. Specifically a hammer and he treats every problem like a nail. 97 percent of people are seeking a “guru.” He basically runs his business through the church- brilliant! Instant credibility and to a target market that is conditioned not to question, never mind to think critically. Yet 80 percent of what he preaches is valuable, kind of like the church. Fair enough?
She took out 8% and splurged it without reinvesting any of it like she should’ve.
Wow dude don’t understand the $1000 reasoning. It’s never enough. It’s just a low goal easy to hit so you can get to the second and pay off your debt. Then build the thousand up in step 3 and look your already in step 3 almost 4 and there’s only 7 but the first 4 are the only ones that really matter.
Dave blocks people cus he’s old and don’t wanna deal with the negativity like yourself.
Dude you shoulda just stayed in your lane and let him and George hash it out on their own.
Dave is old. If you were in his position would you listen to a young idealistic kid that thinks he knows more than my experience. I know I wouldn’t and idk who would.
Dave also blows up about index funds, bond investing, traditional retirement accounts, and I'm sure other staples of investing and retirement.
He's a self-proclaimed expert with no credentials. He is a salesman. He sells entertainment and books. He promises his listeners they can all become wealthy. He convinces his listeners to invest in load stock funds. He conveniently plays dumb on any math that might dissuade a person from doing so.
At 63 if I listened to Dave's advice and took 8% I'd be in my early 80's and flat broke. Then what? This is too important of an issue and perhaps criminal by encouraging people to spend money in such a reckless manner as they would clearly prove damages.
You gotta know when to use your own judgement. Lots of people followed Jim Jones blindly and look what happened to them. Same thing with thinking an 8% withdrawal rate is sustainable,
And another thing that I did not like what Dave Ramsey said was the fact that like especially if you’re doing the envelope challenge the savings challenge and someone said that it was hard to do the savings challenge and he pretty much said that it’s not the savings that is the problem it’s your income as if we’re just all supposed to be out here making $1 millionwhen the economy is hard as it is, I didn’t agree with that statement that it’s your income is the issue
I feel like it's a matter of time until someone calls into the show having taken an 8% withdrawal rate and is now out of money. Heck, I wouldn't be surprised if it's already happened and just never makes it through the call screening (or it did and I don't follow the show so don't know about it).