Calculate your retirement savings using Dave Ramsey's proven Baby Step 4 method. See if you're investing 15% of your income in growth stock mutual funds and track milestones to becoming a millionaire.
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Dave Ramsey recommends investing 15% of your gross household income into tax-advantaged retirement accounts as part of Baby Step 4. This calculator helps you project your retirement savings using Ramsey's methodology, which assumes 10-12% average annual returns from growth stock mutual funds based on historical S&P 500 performance.
Dave Ramsey's retirement strategy is part of his 7 Baby Steps financial plan. Baby Step 4 begins after you've completed Baby Step 3 (saving 3-6 months of expenses). The key principles include: invest 15% of gross household income, prioritize tax-advantaged accounts (401k match first, then Roth IRA, then back to 401k), focus on growth stock mutual funds with long track records, and stay invested for the long term regardless of market conditions.
Future Value Formula
FV = PV(1+r)^n + PMT × [(1+r)^n - 1] / rInstantly see if your monthly contribution meets Dave Ramsey's 15% recommendation and how much more you need to invest to reach that goal.
See exactly when you'll reach $100k, $500k, and $1 million milestones based on consistent investing—a key motivator in the Ramsey method.
Factor in your employer's 401k match (free money!) to see the true power of maximizing your workplace retirement benefits first.
Explore how small changes like an extra $100/month, starting earlier, or slightly higher returns could dramatically increase your retirement wealth.
Completed Baby Steps 1-3? Use this calculator to see how your newfound cash flow can build serious wealth when invested at 15%.
Not sure if you're hitting the 15% target? Enter your income and current contribution to get instant feedback.
See the impact of your employer's 401k match on your total retirement savings—it's free money you shouldn't leave on the table.
Starting Baby Step 4 later in life? See what aggressive saving can still accomplish and when you could reach key milestones.
Dave Ramsey's 15% rule is based on his observation that investing 15% of gross income, when started early and maintained consistently, typically allows people to build enough wealth to retire comfortably while still having money for other goals like college savings and paying off the house (Baby Steps 5-6).
Dave Ramsey cites the S&P 500's historical average return of 10-12% over 30+ year periods. Critics note this doesn't account for fees or inflation. A more conservative estimate of 7-8% after inflation may be appropriate for planning purposes.
Dave Ramsey says NO—the 15% should come from YOUR income. Employer match is bonus money on top. However, you should always contribute at least enough to get the full employer match before putting money in a Roth IRA.
Per Dave Ramsey: (1) 401k up to employer match, (2) Roth IRA up to max contribution ($7,000 in 2024), (3) Back to 401k or 403b for the remaining amount to reach 15%.
Start where you can, especially to capture any employer match. As you pay off debt and increase income, gradually increase contributions toward 15%. The most important thing is to start and be consistent.
Ramsey recommends spreading investments across four types of growth stock mutual funds: Growth, Growth & Income, Aggressive Growth, and International. He advises against bonds for long-term retirement investing and discourages individual stock picking.