Dave Ramsey suggests how pensioner with a £26,000 pension can retire
Dave Ramsey advises elderly woman with no retirement plan
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On the Ramsey Show Highlights YouTube channel, the American personal finance expert answered a listener’s concern about his situation. Jon called in concerned about his retirement plan.
The money expert admired his good heart, and helped him figure something out for Jon and his wife.
Jon said: “We don’t make a lot of money. We own our own business so there have been times where we have had to skip taking a pay check.
“We are both receiving social security now so that supplements our income but I don’t have a lot of money saved.
“I’m concerned that I might not have a lot of money to live on when it’s all said and done.
“We are debt free except for our house and we don’t owe a lot of money on that.”
Jon explained that he and his wife pastor a small church and do not make a lot of money.
There have been times they have had to skip taking a small pay check.
Jon’s wife works outside their home and they both receive social security payments so that supplements their income.
Jon and his wife owe $84,000 (around £73,000) on their home and they have around $30,000 (around £26,000) in their nest egg for retirement.
Their household income varies but on average it is $70,000 (around $60,000).
Both Jon and his wife plan to continue running their business for as long as possible, and they don’t have plans of stopping work.
Jon said: “I plan to stay working for the church, it’s not a career choice for me but a calling.
“Otherwise I would have picked something with a better pay package. It’s where I’m at.”
Dave thought that John had a “great heart.”
Mr Ramsey suggested a five-year plan to Jon if he wanted to be able to get by as he gets older.
The money expert had two goals for Jon.
He wanted him to get the house paid off and put $100,000 (around $86,000) in mutual funds.
It may still not be enough but by the time he is 71, he will be approaching $200,000 (around £173,000) in there with the growth of the $30,000 (around £26,000) if it’s in mutual funds.
He said: “So you’ll be approaching $200,000 (around £173,000) with a paid for $600,000 (around £521,000) house.
“If you can’t make it, at least we know you can sell the house and move to a $400,000 (around £247,000) house.
“Not today, but that’s your fallback plan.”
He explained that the couple could make it if they get their house paid off and put $200,000 (around £170,000) away.
In agreement, Jon stated they would fast-track the house and overpay it each month.
If they pay $1,800 (around £1,500) extra each month, they could pay off their house in the next couple of years.
He hoped to pay off his house in the next 2.5 years by following the steps.
“That’s perfect,” Dave said.
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