Dave Ramsey Baby Step 4 Explained

 

Baby Step 4: Invest 15% of Your Household Income in Retirement

Now you can shift your focus off debts and what-ifs and start looking up the road. This is where you begin regularly investing 15% of your gross income for retirement. Because if you're still working at 67, it should be because you want to, not because you have to. An investing pro can help you build a solid strategy.

How: Here’s the simple breakdown. When you start this step, first look into your employer’s 401(k), if you have one, and invest up to the match. Then open a Roth IRA and max out how much you can contribute to this fund. If you hit the max and still haven’t reached 15% of your income, go back to your 401(k) and contribute the rest there!

Note: If your employer offers a Roth 401(k) and you like the investment options, you can invest your whole 15% there.

Because it’s so confusing, we suggest you don’t make money moves like that without finding a reputable investment pro. These people enjoy investment lingo but know how to talk to you in a way you can understand. They’ll listen to your preferences and help guide you on your investment journey as you set yourself up to save for the retirement of your dreams.

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Please note that I am not affiliated with Dave Ramsey or any links. I have done the baby steps

and just wish to share them with others.