A PROSPECTIVE retiree has sought help from experts after analyzing their financial situation at 66.
Betsy, a North Carolina resident with a neurological disability that impacts her ability to work, argued that “it might be too late” to save enough to live off in the coming years.
She explained her situation in detail to finance professionals Dave Ramsey and George Kamel during an episode of The Ramsey Show podcast.
During the conversation, Betsy revealed that she had about $200,000 for retirement spread across several areas after selling her small business.
Betsy also sold her house and had began “renting very cheaply,” which allowed her to live off of around $600 to $700 per month in other expenses.
The rent, around $1,000 monthly, was paid through Social Security distributions.
Around $100,000 of the $200,000 total cash was invested in a local lender at a return rate of about eight percent per year, Betsy said.
Another $45,000 was invested in a Vanguard investment account, with $17,000 in in Individual Retirement Arrangements (IRAs) and $19,000 cash as emergency savings.
Betsy noted that even with her money in positions that would seemingly be advantageous for retirement, she still comes through her budget and finds herself worrying about whether or not she’ll be able to be financially independent until the end of her life.
“Am I just living a pipe dream?” she asked Dave and George.
“Am I going to be alright if I can really stick to a budget?”
After considering Betsy’s situation, Dave quickly confirmed that the North Carolina resident would be just fine into retirement.
“Yes, you’re gonna make it — no, it’s not a pipe dream,” he said.
Dave then laid out a simple three-step plan to secure Betsy’s financial future while also leaving her the potential to make it even better.
ADJUST THE PORTFOLIO
First, he suggested that Betsy take another look at her portfolio and see if there was anywhere she could make it better through other investments.
He specifically mentioned working with SmartVestor, a subsection of Ramsey Solutions that connects financial professionals with clients to ensure they are making the best decisions possible.
“I want you to sit down with a SmartVestor pro and stir this portfolio a little,” Dave said.
“Let’s see if we can’t make it do better over the long haul.”
“Overall I think you can do better than either one of these investments,” he added.
STICK TO A BUDGET
Earlier in the conversation, Betsy had mentioned her budget of $600 to $700 per month, but noted inconsistencies over the past few months of spending up to $2,000.
Dave stressed that it was imperative she didn’t do that moving forward into retirement, as it would throw off her financial projections entirely.
It would be a surefire way to dig into savings or investments a little too much and short herself in the long run.
The finance expert also suggested expanding the budget as much as possible within reason.
CONSIDER PART-TIME WORK
A key way to increase the budget amount, according to Dave, would be through some low-stress part-time work that wouldn’t affect Betsy’s neurological disability.
Dave said this consideration would be considerably beneficial to allowing her more financial freedom in the coming years.
He added that even an additional $1,000 per month would be game-changing.
“$1,000 per month changes your whole math picture,” Dave said.
“Even it’s just a few hours a day or a week,” George added.
For more related content, check out The U.S. Sun’s coverage of a 60-year-old who said they “YOLO’d” their money away but Dave and his team offered at least four key tips to help them prepare for retirement.
The U.S. Sun also has the story on how you can retire in 10 years starting with $3,000 set aside thanks to a “four percent rule.”