Dave Ramsey Says the 4% Rule is 'Stupid'--8% 'Perfectly Comfortable'

In a recent video answering a caller's question, Dave Ramsey described those promoting the 4% Rule as "stupid," "goobers," and "morons. He described the 4% Rule as stupid and said he's "perfectly comfortable" with an 8% withdrawal rate.

In this video, I'll describe his rationale and why I'm "perfectly comfortable" telling him he's wrong.

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#daveramsey #4percentrule #robberger

ABOUT ME

While still working as a trial attorney in the securities field, I started writing about personal finance and investing In 2007. In 2013 I started the Doughroller Money Podcast, which has been downloaded millions of times. Today I'm the Deputy Editor of Forbes Advisor, managing a growing team of editors and writers that produce content to help readers make the most of their money.

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DISCLAIMER: I am not a financial adviser. These videos are for educational purposes only. Investing of any kind involves risk. Your investment and other financial decisions are solely your responsibility. It is imperative that you conduct your own research and seek professional advice as necessary. I am merely sharing my opinions.

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[Azel]

Dave will never admit he is wrong about anything. He will just raise his voice because the person who speaks loudest must be right.

[ezmaass]

Dave Ramsey doesn't let facts get in the way of opinions.

[spyridon]

Dave Ramsey is like the guy you hire when your company is small, does a great job, and then the company gets so big that the new job requirements exceed his abilities.

When discussing debt reduction, saving, restrained spending, etc. he's excellent.

On investing, he's horrifyingly bad and he's going to put a lot of people in the poorhouse with this 8% nonsense.

[jgallone]

Dave's advice is actually brilliant - convince people to withdraw 8% of their retirement and then when they go broke and get into debt, they can call him for help and buy his books/classes.

[stemikger]

I used to love listening to Dave (many years ago) and I stopped listening when a very nice respectful gentleman like yourself called in and actually presented the facts just like you did here. He was not arrogant and you can tell he was very well informed in this area. Dave treated this guy with such disrespect I could not believe what I was hearing. For some reason Dave dug in his heals on this one and won't admit he was wrong. Very arrogant! He also used very nasty comments when talking about the Bogleheads which I am one of them and that's when I knew he was talking out of his A___S. He is one of those people when he feels threatened, he attacks even when he is wrong. I love reading and listening to J.L. Collins, he is a real gentleman and understand the subject, unlike Dave

[royprovins]

This guy didn't get rich as an investor. He got rich selling books and having a radio program. Also remember he went bankrupt trying to sell real estate.

[cato]

Dave Ramsey’s a great motivator for people that are in deep deep debt. No question about it. But Dave Ramsey doesn’t know anything about retirement planning, investing, or retirement draw downs. There are tons of forums that mock Dave’s severe investing ignorance.

[marysvara]

In a world full of extremists & people who are sure their way is the ONLY way, it is so nice to have a voice of reason to listen to. Someone who doesn't consider their own opinion as fact & who is willing to study the numbers & share the results. Thank you.

[charlesprice]

Thank you for this video. Your rational, factually-based analysis, absent of any name calling, will always be worthy of my time.

[kipcasper]

Rob, you're an inspiration. Thank you for doing what you do to help the average cat like me figure out this whole retirement thing! I can't thank you enough for your level-headed and informative analysis on a number of these type of topics! Keep it up my friend!

[garys]

Thanks Rob. You base your thoughts on facts and research. That is how retirement planning is supposed to work. In fact, facts and research could do wonders in a lot of areas these days. Please continue with helping to learn how to figure things out for ourselves.

[FlagstaffChief]

I think you just made a profound observation. If you take out more to begin with (8%) you are more likely to have to reduce your withdrawals later to remain viable. But if you take out LESS to begin with (4%), you are more likely to be able to withdraw MORE later, and still remain viable. 11:45

[GilreathDental]

Great video Rob! Well presented and thought out as always. As Forrest says, “Stupid is as stupid does”. Most sad is that he has millions of followers blindly following his advice. Super irresponsible.

[blackfootdaisy]

You are the most reasonable person I watch when it comes to retirement advice. I truly appreciate that. Thank you.

[WhiteBoardFinance]

It would give his statements a lot more credibility if he just shared his investments that have earned 12% for years

[jlee]

Thanks Rob. I do love watch yours and Dave show. I personally get to learned lot from both and some other advisors. Im glad i can continue to learn great things from great people out there. Thanks for teaching.

[kojackMintz]

This is a very good analysis. You are direct and to the point and back it up with something that works: the facts.

[Rick-kjdd]

Great video Rob. Straight to the point. Many times Ramsay does not make any sense and believing him could be dangerous to your forward planning if you believe his rubbish statements.

[gregolson]

Loved your tone in this video and the crunching of the numbers and the tools you referenced. I'll have to check those out.

[danhowell]

Dave Ramsey is what dumb people think is a smart person. He is instantly relatable in a cranky old neighbor kind of way.