Episode 361: Dave Ramsey is Right About Bonds, but Not for the Reasons He Thinks

David McKnight addresses something Dave Ramsey has been saying for years: “You should NEVER own bonds in retirement!” David points out that the tool that actually solves the problem Ramsey has been trying to avoid is the same one he spent years mocking on his call-in show: the Fixed-Indexed Annuity. Ramsey’s argument is that stocks outperform bonds over time – hence, bonds should be avoided as they’re “slow, underperforming, and risky.” David indicates what Ramsey is half right about, as well as something he’s missing the mark on… David discusses how bonds can act as a sort of volatility buffer, despite what Ramsey preaches.  The irony is that the best alternative to bonds is something that Ramsey has derided for years (the Fixed-Indexed Annuity). David goes through the key differences between a Fixed-Indexed Annuity and a bond. In years when your stock portfolio is down, you can draw from your annuity – this gives your stock time to recover before you start taking further distribution...