A recent episode of “The Ramsey Show” featured 53-year-old Lisa from Waco, TX, seeking retirement advice for herself and her 59-year-old husband. Together, they have a household income of $7,700, but their nest egg isn’t quite where it should be, with her husband just a few years away from his desired retirement age.
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Having recently talked to a retirement specialist — something Dave Ramsey said is unnecessary — Lisa and her husband determined they have $50,000 in a TSP and that if he retires at 63, he’ll have a monthly benefit of $2,068 combined with his retirement and Social Security.
“I’ve been working the baby steps since last year,” Lisa said. “We have eight children, and I stayed home to be a stay-at-home mom for their whole lives. And then my last is 14 and I went to work whenever my husband did.” Upon returning to work, Lisa was told she needed a college education, so she went to school full-time, while working and caring for her children.
Ramsey immediately responded, “He does not get to retire next year. You don’t have the money.” Co-host George Kamel echoed that sentiment, stating that the husband couldn’t retire in the next four years as he hoped for either.
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Lisa and her husband, with their small nest egg, also have some debts they are working on paying off. She shared that they had paid off $47,000 across 16 credit cards over 13 months, and they still have $17,000 on a car, $21,000 left on their house, and $32,000 in student loans.
Ramsey praised her efforts but stressed the urgency of eliminating the remaining debts. “We need to clean up the car and the school loans as soon as possible in Baby Step 2,” he advised. “And then you need to start setting aside 15% of your household income into retirement accounts in Baby Step four until the house is paid off. And when it’s paid off, you load up everything. And you guys need to get with this. It’s time to clean it up.”
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The conversation highlighted the critical need for financial discipline and planning. Ramsey and Kamel noted the misconception that one could rely solely on Social Security and a modest pension for a comfortable retirement. “Retirement is not an age; it’s a financial number,” Kamel stated, cautioning against underestimating retirement expenses.
Ramsey’s advice was clear: prioritize debt repayment and savings. “Get these debts cleaned up, and then go from there,” he urged. For Lisa and her husband, this means eliminating the $32,000 in student loans, paying off the car, and tackling the mortgage. Only after these debts are cleared can they focus on substantial retirement savings.
For those nearing retirement age, this conversation serves as a reminder that financial preparedness is crucial. Planning, disciplined savings, and seeking professional advice can help secure a comfortable retirement. Consulting a financial advisor can provide personalized strategies tailored to your unique circumstances, helping you maximize retirement savings and maintain long-term financial stability.
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This article 53-Year-Old Caller Asks Dave Ramsey, ‘Are We Going To Have To Live On Beans And Rice Through Retirement?’ — Here’s Where They’re At originally appeared on Benzinga.com
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