Is my mother-in-law okay?

Dear Dave,

My mother-in-law is 60 years old. She works hard and has no debt, but she also has no savings or retirement accounts. However, she does own a few paying rental properties worth around $350,000 each, and her house is worth $700,000. What can I do to help her plan her future?


Dear Paul,

It would be best to see if she already has a plan first. I understand your concern that she has no savings or retirement. It makes you a good son-in-law. But it seems to me that she has the ingredients for a pretty good retirement, even if she didn’t take the traditional route to get there. You just told me she’s sitting on nearly $1.5 million in paid real estate. Dude, she’s a millionaire!

If the time comes when she decides she doesn’t like being a landlord anymore or she just wants to retire, she can always sell the rental properties, invest that big chunk of money in mutual funds and live off his income. I have a feeling this lady is not going to starve or depend on social insecurity.

If there are things that worry you, just sit down with her and let her know. Ask her if she needs help with her financial situation and retirement plans. If she doesn’t want to talk about it now, that’s okay, but making the offer shows that you care about her. And having a good, solid game plan means less worry!



Dear Dave,

My wife and I have two children and one on the way. We have no debt except for our house and we have set up our emergency fund. We also saved for retirement, with me putting 15% in a 401(k) and her putting 10% in her retirement account. On top of all that, we’re putting some money into the college fund for the kids. We talked the other night, and after that we started thinking about withdrawing retirement savings and paying down the house. What do you think of that?


Dear Callen,

I teach people to start investing 15% of their household income for retirement after completing Baby Step 3, which involves saving three to six months of expenses for an emergency fund. Baby Step 4 would be you both putting 15% of your income into retirement, and you’re not quite doing it yet. Saving for college comes next in Baby Step 5.

I don’t teach people to put less than 15% of their retirement income to pay for the house a little earlier. It’s tempting when you have the debt-free bug, but it’s not the shortest distance between where you are right now and wealth. The average person following my plan – the Baby Steps – can pay off their house in about seven years.

You have to think about offense and defense, Callen. Defense gets rid of debt, and offense creates wealth. You don’t want to let your guard down on offense in order to just play defense and make the house pay. What you’re talking about is a normal reaction for a lot of people in your position, but it’s not what I would recommend right now.

I love your fire, but follow the baby steps as shown. My goal is not just to help people get out of debt. It’s about teaching people how to get rich out of debt and encouraging them to be outrageously generous along the way!


Dave Ramsey is a seven-time #1 national bestselling author, personal finance expert and host of The Dave Ramsey Show, heard by more than 16 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business and many more. Since 1992, Dave has been helping people regain control of their money, build wealth and improve their lives. He is also CEO of Ramsey Solutions.

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