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The Ramsey Show

What the U.S. Hitting the Debt Ceiling Means for You (Hour 3)

20 Jan 2023

Transcription

Transcript generated automatically by AI and may contain errors.

Chapter 1: How can I withdraw from my 401(k) effectively?

29.377 - 51.513 Ken Coleman

Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Mugen and Storage Studio, this is The Ramsey Show. It's where America is hanging out to have a conversation specifically about your money life, your work life, and your relationship life. The phone number to join in is 888-825-5225. I'm Ken Coleman. George Campbell joins me this hour.

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51.974 - 63.068 Ken Coleman

Again, the number to jump in is 888-825-5225. We're going to start this hour off with Kara in Houston, Texas. Kara, how can we help?

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63.088 - 79.806

Hi. I have a 401K, and I wanted to roll it over to a Roth IRA, but I needed to take some money out. So I'm wondering, is it best to do a withdrawal now and then roll it over, or roll it over and then try to take a withdrawal?

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80.667 - 83.43 George Campbell

I just wouldn't take a withdrawal at all. How old are you?

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84.355 - 90.742

I'm 65, and it's not a lot of money. It's only $14,000, and I didn't even know it was there.

Chapter 2: What steps should I take to prepare for a potential layoff?

90.762 - 95.407

I got a letter from an old employer of 10 years ago. I completely forgot about this.

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95.508 - 103.777 George Campbell

So this old 401K you've had sitting around, and you're at retirement age now when you can withdraw from this with no penalties. Is it a traditional 401K?

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0

106.6 - 113.788 George Campbell

I would go through with the withdrawal, the rollover, direct rollover to a traditional IRA, and then use that money.

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114.595 - 118.402

and then use it. Okay. That's short and sweet. That's all I needed to know.

118.683 - 122.97 George Campbell

Absolutely. All right. How about that? That was the easiest call of the day, Ken. There you go.

Chapter 3: Should I choose a higher-paying job over job stability?

123.071 - 130.825 Ken Coleman

Thanks for the win, Kara. Way to go, Kara. Jennifer is now up in St. Petersburg, Florida. Jennifer, how can we help?

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131.025 - 162.334 Jennifer (Caller)

Hi. Hi. So I'm just kind of, I need assistance to figure stuff out because my husband may possibly be laid off of work and we have a home that we need to pay for that we just recently purchased. And we don't really have major bills, but I have a job, a side job, and I'm going into like a third job. So it's just kind of like, you know, how can we prepare in case that was to happen?

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162.714 - 167.959 Ken Coleman

Okay. So what do we know? What do we know? Not what we think and what we feel right now.

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Chapter 4: What does the debt ceiling mean for the average American?

167.979 - 173.664 Ken Coleman

We want to focus on what we know about the possibility of him being laid off. What, what, what is he hearing? What is it?

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173.744 - 197.108 Jennifer (Caller)

There's new management on board now in the company. And there's like this one major project that they've had him working on. And once that project is done, um, Previously, they had talked about converting that particular office space into something that has nothing to do with what he does now. Okay.

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197.128 - 201.395 Ken Coleman

So when does he anticipate that the project that he's working on will be finished?

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201.415 - 202.297 Jennifer (Caller)

In about a month and a half.

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202.697 - 208.187 Ken Coleman

All right. So we start there. All right. So worst case scenario is in a month and a half, they lay him off.

208.758 - 209.499 Bruno Satin

All right.

Chapter 5: How can I pay off debt when I have no financial margin?

210.22 - 240.477 Ken Coleman

So in that month and a half time, starting today, tonight, if it's me, this is what I would do if I were your husband. I'd be reaching out to people that I know in his industry, people that may know somebody in other companies that hire people to do what he does. So we're just looking, you know, St. Petersburg, Florida, big area. Pretty good job market is my guess. And so I'd be shaking the tree.

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240.718 - 247.091 Ken Coleman

He's looking. He's applying. I mean, he can start that process now. He doesn't have to take it. He can start interviewing.

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247.993 - 260.344 Jennifer (Caller)

The thing is that he's already at his max. He's actually getting overpaid now. for what he actually does anywhere else.

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260.364 - 262.186 Ken Coleman

What does that have to do with what I told you, though?

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Chapter 6: What should I do if my dream job becomes unfulfilling?

262.346 - 267.592 Ken Coleman

What does that have to do with the fact that he's still got to be looking for something? We need a plan. We need a backup plan.

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267.712 - 277.702 George Campbell

So you're saying worst case, there's a slight reduction in income if he goes to a different company. So that'll adjust our budget. So let's look at the numbers here. Are you guys okay financially?

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279.944 - 281.026 Jennifer (Caller)

For the most part, yes.

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281.306 - 281.927 George Campbell

Do you have debt?

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282.327 - 282.387

No.

282.907 - 299.161 Jennifer (Caller)

Um, just like the, the house and we don't have car, we, we don't have car debt. Um, credit cards we do have. Um, I have like two credit cards. Um, not too, not nothing too crazy. Maximum, maybe like 3000.

Chapter 7: How can I create a budget that allows for debt repayment?

299.301 - 301.463 Jennifer (Caller)

Are you carrying a balance?

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301.483 - 303.124 George Campbell

You have credit card debt that you're carrying?

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303.144 - 312.492 Jennifer (Caller)

Yes. How much? Well, like 2000 change, you know, I just recently got the credit card. So of course during the holiday, you know,

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312.978 - 325.84 George Campbell

Well, the best thing you can do when this is just kind of the warning sign is to cut them up because if you have a reduction in income, the last thing you need is payments to lenders. And so I would get rid of these cards, pay them off. Do you have money in the bank right now?

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326.613 - 346.158 Jennifer (Caller)

Not really. I tried starting like a savings account. I've always been very bad about financials, like very. I've always like counted pennies because I've always been for the most part a single mom. So obviously now it's different. He actually, on the other hand, he's very good with finances and savings and, you know, numbers.

Chapter 8: What financial strategies can help during economic uncertainty?

346.218 - 347.44 Jennifer (Caller)

He's like a numbers man.

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347.42 - 362.12 Ken Coleman

Okay, so hold on a second. Let's slow down for a minute. And I appreciate we're asking about your money, but you called to say, what are we going to do if he gets laid off? The point is, number one, George will help you. You need to get disciplined with money. We're going to give you some resources so that you two get on the same page. I'm glad he's good with money.

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362.14 - 374.577 Ken Coleman

You need to let him lead in that way. Let him model for it. Say, hey, I'm in. I want to do the way that you do things. That's a start. But the reality is that he makes X amount of dollars. How much does he make?

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376.299 - 377.14 Jennifer (Caller)

Close to $30,000.

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377.305 - 379.429 Ken Coleman

$30,000. And what does he do?

380.131 - 385.14 Jennifer (Caller)

No, no, close to $30 the hour. Oh, $30 an hour.

385.281 - 388.126 Ken Coleman

So we'll call that about $60,000 a year. Yeah. So what does he do?

388.326 - 392.331 Jennifer (Caller)

Um... Do I really have to share that?

392.811 - 413.978 Ken Coleman

No, but you don't have to. I was just simply trying to say, I said to you, my first thing was he needs to start looking for jobs, looking for work that he does now that he's got some actual experience in and some skill. Your first response was, well, he already makes more than he would anywhere else. And that's not the mindset. I mean, he needs to be looking right now.

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