Dave Ramsey Tells Americans 'If You Retire Broke, It's Your Fault,' Explains How To Retire With $1 Million

Financial guru Dave Ramsey doesn't mince words on The Ramsey Show, asserting, "It's your fault in this country if you retire broke." According to Ramsey, anyone who has worked their entire life should have something to show. 

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Ramsey has built his financial philosophy on some basic principles that he believes can help most people become millionaires — or at least have $1 million for retirement. These are his seven Baby Steps to Financial Peace. 

Let's revisit what those are: 

1. Save $1,000 for a starter emergency fund. 
2. Pay off all debt (except the house) using a debt snowball. 
3. Save 3-6 months of expenses in a fully funded emergency fund. 
4. Invest 15% of your household income into retirement accounts. 
5. Save for your children's college fund. 
6. Pay off your home early. 
7. Build wealth and give. 

Ramsey Solutions emphasizes Step four as crucial for saving $1 million for retirement. While his advice is particularly relevant for people aged 25-45, the basic concept applies to older people too, with adjustments for higher contributions. 

On The Ramsey Show, Dave says, "$100 invested every month from age 25 to 65, averaging 12% with a good growth stock, mutual fund, or Roth IRA is $1,176,000." So, if you can start early, by all means, do it. 

Ramsey’s message is clear and direct, "If you’re listening to this show, and you are under 40 years old, and you don’t retire with $1 million, that’s no one’s fault but yours." 

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So, if you start later than age 25, how does Ramsey propose you save $1 million for retirement? This is where Step four is emphasized: putting away at least 15% of your household income into retirement (only after you're debt-free and have an emergency fund). 

Ramsey Solutions recommends starting with your 401(k). You can invest the full match amount with a 100% guaranteed return with employer matches. According to The National Study of Millionaires, eight out of millionaires invested in their companies' 401(k)s. 

From there, it is critical to stay out of debt and keep a healthy emergency fund saved up as you work on building your retirement. Any debts you accumulate will deplete any extra amounts you could put toward a stable financial future. 

An example from Ramsey Solutions highlights how people under 40 can save $1 million for retirement. If someone is making $80,000 annually, they would need to invest $1,000 per month to reach that 15%. Putting that into "good growth stock mutual funds" could bring in more than $1.5 million in a retirement nest egg by age 65. Holding off retirement another five years could result in $2.8 million. 

Whether you start saving for retirement at age 25 or 55, there are ways to build up your nest egg and have a comfortable retirement. It might take a few years of discomfort to get back on track, but with the right financial advisor on your team, you can devise a game plan for a more comfortable financial future. 

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