Enough

Alternative to Dave Ramsey's retirement calculator

Can you really retire on Dave Ramsey's 8% rule?

Dave Ramsey tells you to save 15% of income, invest in mutual funds, and withdraw 8% in retirement. Here's what those numbers actually mean — and where his math gets pushback from other experts.

Assumed return

12.0%

Withdrawal rate

8.0%

Savings rate

15.0%

radio host, author of The Total Money Makeover

What Dave Ramsey's Numbers Mean For You

Using Dave Ramsey's assumed 8.0% withdrawal and 12.0% return. "Years to FI" assumes a $50,000 starting portfolio and $2,000/month contributions.

Annual SpendingFIRE # (Dave Ramsey)FIRE # (4% rule)Years to FI
$40,000$500,000$1,000,0008.8y
$70,000$875,000$1,750,00012.6y
$120,000$1,500,000$3,000,00016.6y

The Methodology

Dave Ramsey teaches a step-by-step approach he calls the Baby Steps. Step 4 says to invest 15% of household income into retirement accounts — spread across four mutual fund categories (growth, growth & income, aggressive growth, international). His widely-quoted assumption is a 12% average annual return, drawn from long-run US stock market averages. For retirement withdrawals, he tells callers that drawing 8% per year from a portfolio returning 12% is safe because the portfolio grows faster than you spend it (after inflation, ~4% real growth).

Citations

  • “Save 15% of income in retirement accounts” — Baby Step 4 — TheRamseyShow.com
  • “Expect 12% average annual return on mutual fund portfolios” — Ramsey Show — ramseysolutions.com investing lessons
  • “8% withdrawal rate in retirement” — Dave Ramsey Show episodes, 2022–2024

Our Honest Take

Where Dave Ramsey is right

Ramsey's rules are simple, memorable, and have helped millions start saving. Teaching 'invest 15%' beats 'invest nothing' every time. His core move — get out of debt, then invest consistently in low-cost index-style mutual funds — is directionally correct, and the behavior change he drives is worth more than a few basis points of return.

Where we differ

Three issues with the numbers. First, 12% is a nominal long-run US-only average; real returns net of fees and inflation are closer to 6–7%. Second, the 1998 Trinity Study and the Bengen safe-withdrawal research (which created the '4% rule') both concluded 4–4.5% is the safe rate for a 30-year retirement. 8% has a high failure probability — Monte Carlo simulations show 50%+ portfolios run dry within 30 years at that rate. Third, his advice ignores taxes and geography entirely. Our FIRE Calculator uses historically grounded returns, lets you pick your own safe withdrawal rate, and adjusts for the cost of living where you'll actually live.

Try the Enough FIRE Calculator

Set your own return and withdrawal rate assumptions. Pick any city in the world to adjust your FIRE number for local cost of living.

Open FIRE CalculatorSafe Withdrawal Rate Tool

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Where You Retire Changes Your Number

Dave Ramsey's math assumes a generic US cost of living. The state or country you retire in can move your FIRE number by 30-70%. Start with a tax-friendly state or an international destination:

Florida

No income tax

Texas

No income tax

Portugal

D7 + NHR

Thailand

Territorial

Browse all 50 US states → · International retirement guides →

This page is an independent educational analysis of Dave Ramsey's publicly stated retirement methodology. It is not officially endorsed by or affiliated with Dave Ramsey or their organization. Retirement planning involves significant uncertainty — consult a qualified fiduciary advisor before acting on any calculation.