I'm Afraid I Won't Have Enough To Retire

Summary

The Ramsey Show Highlights: "I'm Afraid I Won't Have Enough To Retire"

Podcast Information

• Title: The Ramsey Show Highlights
• Host/Author: Ramsey Network
• Description: The Ramsey Show Highlights offers a quick, daily dose of advice on life and money in under ten minutes. Featuring experts like Dave Ramsey, Ken Coleman, Rachel Cruze, Dr. John Delony, George Kamel, and Jade Warshaw, it’s part of the Ramsey Network and delivered seven days a week.
• Episode: I'm Afraid I Won't Have Enough To Retire
• Release Date: February 19, 2025

---

Introduction

In this episode of The Ramsey Show Highlights, Monica reaches out to express her deep concerns about her retirement savings and whether she'll have enough to live comfortably at age 67. Hosted by Dave Ramsey and George Kamel, the discussion centers on Monica’s financial status, her retirement planning, and strategies to alleviate her anxiety about the future.

Monica’s Financial Situation

Monica, a 56-year-old professional, outlines her current financial landscape:

• Income:

  • Salary: $47,840 annually
  • Savings: Contributes 20% of each paycheck to her savings account, currently holding $12,237.

• Investments:

  • IRA: $47,702 with a $200 monthly contribution.
  • CD: $36,022 locked in at 5% interest for 13 months.
  • Roth IRA: $2,581 with an 8% monthly contribution, set to increase by 2% annually until it reaches 15%.

• Debts and Housing:

  • Debt-Free: Successfully paid off debts following a divorce in 2018.
  • Housing: Does not own a home and pays approximately $1,200 monthly for utilities and groceries, living with her significant other.

Notable Quote:

Monica [00:27]: "I do not have any debt. I'm debt free, but I do not own a home."

Analysis of Monica's Retirement Readiness

George Kamel employs his calculator to assess Monica’s financial readiness for retirement.

• Emergency Savings: With $12,237 in savings, Monica exceeds the standard recommendation of three to six months' expenses.

• Retirement Accounts: Monica currently has about $50,000 in retirement accounts. However, George and Dave highlight that this amount may not suffice for a comfortable retirement, especially considering her planned retirement age of 67.

Notable Quote:

George Kamel [00:27]: "George has got his handy calculator ready."

Dave Ramsey’s Insights

Dave Ramsey commends Monica for being debt-free and maintaining a diverse set of financial instruments. However, he emphasizes that her current savings trajectory might not meet her retirement needs.

• Investment Growth: Assuming a 10% rate of return, Monica could amass approximately $258,000 by age 67. While substantial, Dave asserts, “That’s not enough for me to retire on.”

• Recommendations:

  • Increase Savings Rate: Shift her Roth IRA contributions to 15%, as per the Ramsey plan.
  • Boost Income: Consider a second job or seek higher-paying opportunities to elevate her annual salary.
  • Potential Extended Working Years: Suggests that Monica may need to work until 72 to secure a more robust retirement fund.

Notable Quotes:

Dave Ramsey [02:00]: "So you're doing 17 things at once, Monica, and none of them are inherently bad."
Dave Ramsey [04:14]: "You might need to work longer than expected."

Emotional Impact and Personal Concerns

Monica shares the emotional toll her financial worries have taken, revealing that her anxiety has significantly impacted her sleep and overall quality of life.

• Personal Context: Monica is in a relationship with a 60-year-old man who has a pension that will provide $50,000 to $60,000 annually upon his retirement next July. They are not yet married, which complicates their financial planning.

Notable Quote:

Monica [05:32]: "I have so much anxiety over this that it's been a year that I can barely sleep because this takes the enjoyment out of my life."

Developing an Action Plan

George Kamel and Dave Ramsey work with Monica to formulate actionable steps to alleviate her retirement fears:

1. Increase Retirement Contributions:

   • Monica commits to raising her Roth IRA contributions to 15%.

2. Enhance Income:

   • Explore opportunities for a higher-paying job or a second income stream to boost her annual salary.

3. Investment Strategy:

   • Continue investing with a focused savings plan to grow her nest egg, potentially reaching half a million dollars if income and savings rates increase.

4. Long-Term Planning:

   • Consider working beyond the traditional retirement age if necessary to ensure financial stability.

Notable Quotes:

Monica [06:27]: "Maybe get a second job or look for another job with a higher salary."
Dave Ramsey [05:25]: "So we need to A, get our income up and savings rate up, and B, we might need to work longer than expected."

Building Confidence and Taking Action

George and Dave emphasize the importance of clarity and taking decisive action to build confidence and reduce anxiety. They encourage Monica to leverage her extensive experience and impressive resume to secure a more lucrative position.

• Clarity Breeds Confidence: By understanding her financial needs and having a clear plan, Monica can overcome paralysis and take proactive steps.

• Confidence Breeds Courage: Increased confidence will empower Monica to make bold decisions regarding her career and savings.

Notable Quotes:

George Kamel [07:12]: "Monica, you can sell. You are a six figure earner. Let's go get it."
Dave Ramsey [07:30]: "She can. We could learn a thing or two from Monica."

Conclusion and Encouragement

The episode concludes with reassurance and encouragement for Monica to implement her action plan. Dave directs listeners to Ramsey Solutions' free investing guide for those seeking further assistance, emphasizing that with the right strategies, Monica—and listeners alike—can achieve financial peace of mind.

• Final Advice: Maintain a disciplined savings and investment strategy, seek income growth, and remain committed to long-term financial goals.

Notable Quote:

Dave Ramsey [09:03]: "Monica, you're going to be okay."

---

Key Takeaways:

• Assess and Optimize Investments: Regularly review and adjust retirement contributions to meet long-term goals.
• Increase Income: Actively seek opportunities to boost earnings, whether through career advancements or additional income streams.
• Emotional Well-being: Address financial anxiety by creating and following a clear, actionable plan.
• Long-Term Planning: Be prepared to extend working years if necessary to secure a comfortable retirement.

---

For more detailed guidance, listeners are encouraged to visit RamseySolutions.com to access free budgeting and investing resources.

Transcript

[Dave Ramsey]

Brought to you by the EveryDollar app. Start budgeting for free today.

[Monica]

I am just extremely worried and hope that you can help me break down what I currently have in retirement to maybe give me some peace of mind that at the age of 67, I may be able to retire frugally.

[George Kamel]

How old are you now?

[Monica]

I'm 56. I'll be 57 in April.

[George Kamel]

Okay, give us the numbers. George has got his handy calculator ready.

[Monica]

Great, Great. Well, I'm going to tell you. The salary that I make currently is $47,840. I currently have an IRA that has $47,702 in it, and I can contribute 200 per month to that IRA. I have a CD that I locked up for 13 months at 5% interest. It currently has $36,022 in it. I have a Roth IRA in a job I started a year ago. It has $2,581 in that I am contributing 8% and set it up for a 2% per year increase until I reach 15%. And then in my savings, I currently have $12,237. I put 20% of each check into that savings account. I do not have any debt. I'm debt free, but I do not own a home. I went through a divorce in 2018. Took years to pay off my debt to get to where I am now debt free.

[George Kamel]

What would be three to six months expenses for you?

[Monica]

Very minimal because I live with my significant other. He doesn't have a house payment, so I just pay utilities. We split utilities, we split groceries. So, you know, maybe, maybe 1200amonth.

[George Kamel]

Okay, so you have more than three to six months in that savings account with the 12,000. That's what I was trying to get to.

[Monica]

Oh, yeah.

[George Kamel]

Okay.

[Monica]

Yes.

[Dave Ramsey]

So you're doing 17 things at once, Monica, and none of them are inherently bad. So let me encourage you that you're in a good spot at 57 being debt free. You've got a little nest egg going. You've got some savings going. But we're doing like seven things. Like, you got the CD over here. We got some savings here. We're doing a little investing here. One, what's the deal with increasing it from the 8%? Why not just go? I'm going to invest 15% with the Ramsey plan. I'm going to do the Roth accounts and see where I go there.

[Monica]

I am so open to that. That's why I wanted to talk to you today. I live very frugally. The Only thing that I spend a decent amount of money on is good organic produce and grass fed meat.

[George Kamel]

Look at you.

[Dave Ramsey]

Which means you need more in retirement because you're going to live to be 120 at this rate by eating. So health.

[George Kamel]

Monica, quick question, George, before you get to your. Your crunching of numbers. Do we expect to marry this significant other?

[Monica]

I would love that. But the Significant other is 60 years old and never been married, never had children. I'm working on that. We're both Christians and I'm not feeling comfortable with the situation that we're currently in. I was gonna say, and we're not married.

[George Kamel]

Not sure what church is good with that situation. Monica, no judgment here. I mean, so I love that you're working on it.

[Dave Ramsey]

She's working on it. Working on a lot of things can a lot of irons in the fire.

[George Kamel]

But see, that changes the equation a little bit. George, I wanted you to have that information.

[Dave Ramsey]

That's good to know because you don't have a mortgage and you may not.

[George Kamel]

What's his. What's his income?

[Monica]

He is 100,000 a year, but he retires next July.

[George Kamel]

What kind of nest egg does he have?

[Monica]

I think he said he'll be able to with what he has in his pension and retirement. He'll retire with like 50 or 60,000 a year. So it's not a ton.

[George Kamel]

Yeah. Okay. All right, George, take it away.

[Monica]

I'm going to.

[Dave Ramsey]

You guys have separate finances, Correct. Okay. So I'm going to pretend like this is Monica's situation through retirement is that she's doing this on her own. Okay.

[Monica]

Yeah.

[Dave Ramsey]

So I crunched your current numbers. Here's what I found out. You got 50 grand in retirement accounts. Let's say from 57 to 67. You invest 15%. You never get a raise. It's about 600 bucks a month. Right. Of your $48,000 salary and assuming a 10% rate of return, you'd have 258,000. Now that's great. That's not enough for me to retire on. I don't know about you. I'd want a bigger nest egg.

[Monica]

Yes.

[Dave Ramsey]

So what does that tell us? We need to A, get our income up and savings rate up, and B, we might need to work longer than expected.

[Monica]

Okay.

[Dave Ramsey]

If our body allows us. So you might need to do both of those things. And I would recommend it because if we can get your income up, get your investing rate up, have you work a little bit longer now, we can go. Okay. We might retire with half a million. The Other piece of this equation is you're going to have to pay rent the rest of your life if we don't get into a house with a fixed expense. And so that's the part that worries me here. I hope you guys are together a long time. I hope you get married, because that changes this equation completely. But this idea of you sort of just not having anything, not building towards something at your age gives me some pause.

[Monica]

Yes.

[George Kamel]

Have you had this conversation with him that just how you feel about your own finances?

[Monica]

Yes.

[George Kamel]

How does he react?

[Monica]

And I'm going to tell you, to be honest with you, I. I have so much anxiety over this that it's been a year that I can barely sleep because this, it takes the enjoyment out of my life because of this constant fear and worry. Now, I know we none of us know about tomorrow, but you still have to have a plan.

[George Kamel]

Yeah, well, and George is addressing that plan. So when George hits you with that, what is your reaction that you can do tangibly when it comes to income saving more, what immediately comes to mind? Because you got to stop worrying and start getting busy. Part of this challenge is you didn't have a clear vision of what you need to do. George just gave it to you. But now the second thing is we start getting busy, and the busier I am attacking something that is a potential problem, the less I'm worried about it. Do you resonate with that?

[Monica]

Yes, I do.

[George Kamel]

Okay, so what can you do tactically coming out of what George just told you?

[Monica]

Well, first and foremost, immediately, I can increase my Roth to 15%.

[Dave Ramsey]

Good.

[Monica]

Maybe get a second job or look for another job with a higher salary.

[Dave Ramsey]

Yeah. Can you make 60, 70,000 in your field doing something similar with your experience?

[Monica]

I have a pretty decent amount in Social Security right now, which probably won't be there, but for years I made six figures. It's just the rigorous travel in the sales that I was in. I just couldn't deal with it anymore. I was on the road, you know, four nights a week.

[Dave Ramsey]

Who told you there's no sales roles that you could do without traveling all the time?

[Monica]

No one.

[George Kamel]

Yeah, she just. I get it. You downshifted. I. I get the downshift. But hey, you downshifted. Now you're on the other side of this and you got a lot of experience. My guess is your resume is very impressive.

[Monica]

Yes.

[George Kamel]

Well, let's go get it. Monica, you can sell. You are a six figure earner. Let's. You want to attack this worry and sleep well at night, Start making Some more money and putting more money away.

[Monica]

Agreed.

[George Kamel]

Come on, Monica, do not let this fear happen to you. You need to happen to it. Let me tell you something I've learned, okay? I've had the privilege at Ramsey Solutions, not counting the Ramsey show, but on the Ken Coleman show. George, I've coached over 10,000 people and they're trying to make more money or experience more meaning and work. And Monica, here's what I want you to hear. There's a formula that I've learned because people call me and they're paralyzed. Do I take this job? Do I stretch out to this? Do I get a degree? You know, they're trying to figure out what do I do to make my life better through my work. And here's what I've learned. George, you've heard me say this. And Monica, I want you to catch this. Clarity always breeds confidence and confidence breeds courage. And I think that's what you need today. And George just gave you tremendous clarity and you got it. You repeated back exactly what we would want you to do. There's your clarity. Let that clarity, that action plan that you laid out for us so clearly. Let that be the thing that you focus on and watch what happens. George, your confidence is going to go up. And then the confidence gives you that courage to keep going, keep trying, get a new gig here.

[Dave Ramsey]

The income then goes up along with confidence.

[George Kamel]

There we go.

[Dave Ramsey]

Savings rate goes up. The nest egg will start to grow. And you might need to work until you're 72. And I hope you're able bodied with all those organic foods. Oh, that, you know, you're still very limber.

[George Kamel]

Monica's eating clean. She can.

[Dave Ramsey]

She can. We could learn a thing or two from Monica.

[George Kamel]

Yeah.

[Dave Ramsey]

Hey, Monica, hang on the line. Jump on ramseysolutions.com guide we've got a free investing guide. It's going to walk you through this much more detail. Anyone can go get it. Ramseysolutions.com guide Monica, you're going to be okay.

[George Kamel]

This is the Ramsey Show. Create your free every dollar budget today.

[Dave Ramsey]

The simplest way to budget for your life.