A TROUBLED caller to The Dave Ramsey Show has revealed he has “no retirement” at 48.
The financial guru told Steve from Columbus, Ohio, exactly how to make every cent count toward his future.
Steve called into The Dave Ramsey Show last year to explain his financial situation.
Despite making $80,000 a year, the Ohioan had no retirement plan.
But the only savings he had were $20,000 in cash in a safety deposit box and another $20,000 in a savings account.
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Dave first recommended paying off his truck to become debt-free, and then setting aside around $20,000 as an emergency fund.
Then, he told Steve to start saving for retirement with a Roth IRA.
Although Steve did not have a retirement fund, Dave was impressed by how much money he had been able to squirrel away.
“That guys a natural saver, he’s done a good job,” the guru told his co-host, Christina.
“But he’s listless and hasn’t yet used the power of his income, to not only get out of debt first, but then point it toward something other than piling up cash in a safe deposit box.”
A big disadvantage to saving money in cash is that it cannot grow interest to keep up with inflation.
“If the inflation rate is 9%, that means that every $10,000 that is in there is losing $900 a year,” said Dave.
“You can’t let money just sit in a stack of Benjamins, it goes down in value.”
Another problem is that it’s a safety risk.
The money could get lost, stolen, or damaged in an accident like a fire or a flood.
ANOTHER RETIREMENT CRISIS
Steve is not the only person struggling to plan for retirement that Dave has helped.
Dave was able to help Fred by explaining his “Baby Steps” method to becoming debt-free and building wealth.
“We’re gonna get you on a rice and beans, beans and rice budget,” he explained.
Once the debt was paid off, Dave recommended saving “$10,000 to $15,000” in one year as a rainy-day fund.
“Then, you’re gonna start pouring into your 401k, really, really, aggressively,” he said.
Dave told Fred that he would have to keep working until he was in his early eighties because he had so little saved for retirement over the previous decades.
See what another financial pro told a woman drowning in credit card debt with $400 interest racking up every month.
And find out why a TikTok budget coach reckons some Americans will never be able to fully retire.