Dave Says

Control your own destiny


Dear Dave,

I read where you recommend saving 15% of your income for retirement. Should I count my employer’s contribution to my retirement plan as part of that 15%?


Dear Carlotta,

That’s a great question. Employer contributions do not count toward the 15% I recommend setting aside for retirement. It’s great if you work for a company that offers perks like that, but I want you putting 15% of your money into retirement. Whatever your company matches, whatever its pension may be, or even having a military retirement package, none of that enters the equation. I want your money in your name. 

Baby Step 4 of my plan says to put 15% of your income into retirement accounts. The first thing you should put money into is a matching retirement account. If you’ve got a 401(k), a Roth 401(k) or a 403(b) and your employer offers a match, you should do that up to the match before anything else.

Let’s say your employer will match three percent. Since the goal is 15%, that still leaves you with some work to do. You’ve got 3% of your own money already going into retirement, so then you could look at a Roth IRA. If the Roth, plus what you invested previously to get the match doesn’t equal 15%, then you could look at a 403(b), or go back to your 401(k) to hit the 15% mark.

And remember, if you’re going to reach your retirement goals, you can’t do it alone. King Solomon, one of the wisest men who ever lived, wrote: “Where there is no counsel, the people fall; But in the multitude of counselors there is safety” (Proverbs 11:14 NKJV). That’s why you need a quality financial advisor — one with the heart of a teacher — to help you navigate complicated financial issues, and guide you toward the kind of retirement you want. 

Do you see what I’m saying here, Carlotta? I want you — not the company you work for — to control your financial destiny. I want you to be able to retire with dignity, and enjoy life after working hard and saving. The responsibility for making that happens falls to you!

— Dave


Dave Ramsey is an eight-time national bestselling author, personal finance expert and host of The Ramsey Show.