Millions of Americans build their savings around Dave Ramsey’s Baby Steps, but the plan’s guidance on withdrawing that money has become the most contested part.
Ramsey recommends an 8% annual withdrawal rate, based on his assumption that a stock-heavy portfolio will average 12% returns per year, leaving a 4-percentage-point cushion for inflation.
Two major research studies published over the past year place the safe withdrawal ceiling far below that target.