The Rachel Cruze Show - Is It Still Possible for Gen X to Retire?

Episode Date: November 6, 2024

💵 Start your free budget today. Download the EveryDollar app! If you’re approaching retirement age but don’t have quite enough saved to stop working just yet—don’t panic. In this episode, I’ll share some important steps Gen X and above can take to get ready for their golden years.   Next Steps: 🎥 Watch my video Investing for Total Beginners. 💰 Find out what’s possible with the Investment Calculator! 💸 Invest in your future with a SmartVestor Pro. Ramsey Solutions is a paid, non-client promoter of SmartVestor Pros.  Connect With Our Sponsors: 🏥 Learn more about Christian Healthcare Ministries. 🔒 Get 20% off when you join DeleteMe. Listen to More From Ramsey Network: 🍸 Smart Money Happy Hour 🎙️ The Ramsey Show   💸 The Ramsey Show Highlights 🧠 The Dr. John Delony Show 💰 George Kamel 💼 The Ken Coleman Show 📈 The EntreLeadership Podcast   Ramsey Solutions Privacy Policy Learn more about your ad choices. Visit megaphone.fm/adchoices

Well, hey, you guys. So I was recently thinking about a specific group of people that I hear on the Ramsey show a lot because we talk about retirement investing and how important it is and how you need to be investing 15% of your income once you're debt free and have a fully funded emergency fund. But I also really feel for people because we get calls, you know, with people in their 50s or their 60s and they have not saved anything for retirement. And in 2024, people that are in their 50s, 60s, that's either a boomer or even So today, I'm talking specifically to Gen X out there and those above, so you boomers as well. But to figure out, hey, is it so possible for you to retire? Because the truth is, it is, but it may look a little different than what you think. And this also would apply if you are at the point where you're not investing yet for retirement and maybe you are a millennial or even a Gen Z or out there. But I think it's important to understand, hey, this is what the future looks like. And you could learn a lot from that.

So be sure you guys to hit that subscribe button though before we jump in if you want to hear more content like this. All right, step one, if you are a Gen Xer or a baby boomer when it comes to retirement, is knowing what your current situation looks like. And I think this idea of retirement, if you don't feel like you have enough, can be really scary. And what happens is fear can just magnify so much in our head. So getting actual numbers down is really, really important. And some people don't even know. Like, I think I have this in my 401K.

I don't even know if I have a Roth IRA. I think I funded it a few years ago, but I'm not sure. Like getting all of your numbers is really key. And then plugging them in somewhere to at least get this overall view of when it comes to your numbers and your situation. And one of the best ways to do that is with an investment calculator. And I always use the Ramsey calculator because, again, it's obviously very accurate. But I think it's easy to change up some of these numbers to get some hypothetical situations. So, for instance, let's just say you're 60 years old and you're making some.

$70,000 a year. And if you invested 15% of your income, that's $875 a month for the next 10 years with a 10% rate of return, then you'll have about $180,000 in retirement. Now, if you increase your retirement age to 72 and raise your contributions by 5%, you'll have more like $322,000 saved, which, again, you want to retire as soon as possible. So is that a great retirement age, 72? No, but also people are doing it to get more money in their retirement, which is really, really important. So is it possible to retire later? Yes, it is. Now, here's another example. Let's say you're 52 and you and your spouse have recently become in Denesters, and combined, you make $100,000 a year. If you have nothing saved for retirement, but maybe you have a paid off home and you're in good health and you both have accepted, yeah, we'll probably work later into our 60s. And you get to this point that you're like, okay, let's invest $1,500 a month for the next 15 years. at 10% rate of return. Well, that means you would have $622,000 at the age of 67. And then if you work till

70, you'd have just over $900,000. Again, in this hypothetical situation, also paid off home. So you put all that together, your assets, and you're a net worth millionaire, which is awesome. So if you get the idea of kind of taking inventory of your current situation and playing around the numbers, you can actually kind of get to this place of facts and not emotion to help you better plan. All right, step two for my Gen Xers is to get yourself in a position where you can actually invest. So it's hard to do 15% of your income. Again, when you have a lot of debt payments, you don't have money saved and all of that. So getting yourself with a firm financial foundation is not only going to help you long term when it comes to retirement,

but it's going to help you more in the present. So getting out of debt is so important. So I would actually, some people would yell at me for this, pause investing in order to pay off your debt faster. and people are getting out of debt in 18 to 24 months using the debt snowball method where you pay off the smallest debt first and work your way up. And then once that's paid off, get an emergency fund in place of three to six months of expenses. So all of that is really, really key, again, to have that strong foundation so then you can put even more towards retirement.

All right, step three is to remember that the 15% rule will catch you up over time if you pause investing to tackle getting out of debt and getting an emergency fund in place. Because the truth is, some people just match up to their 401K. So they're like, oh, yeah, I'm just, you know, investing 4% or 5% or 6%. So 15% is crushing it, you guys. So putting that much towards it is going to help you in the future. All right, step four is to shift your expectations. So again, if you are a Gen Xer or a boomer and you are behind and you don't have a lot

of money saved for retirement, number one, just remember it is never too late. Okay, you can do this. You have to start where you are. And again, putting some of these rules in place is going to help you get there faster. But the truth is that the expectations of, oh, yeah, I'm going to just retire at 59 and a half may not be realistic. And that's okay. And I think that's life, too. I think there's, you know, harder expectations that we have to lower in life.

So whether it's like the type of house that you're wanting to buy or even when it comes to getting married or having kids, like there are things in life that happen. And you're like, man, I could have made different decisions, but I'm not going to just sit there and wallow in the past. What am I going to do today? And so shifting those expectations as a part of life. And the truth is if you don't have a lot saved right now and you are in your 50s or 60s, that expectation of how much you'll have and even the age you retire may have to shift a little those expectations, but that doesn't mean that you can't retire. I really, really believe when you get strategic about this, you can do it.

And then step five, part of that strategy is sitting down with a professional. So again, working with somebody that, again, has your overall financial picture. and this is, you know, everything from Social Security. If you have a pension, a family inheritance, house value, estate planning, taxes. I mean, there's so much that an actual professional and investment professional can sit down, run some scenarios, run numbers. And what's really key about these people is a lot of them don't even really get into the nitty of like, oh, the specific funds.

You know, you can have your overall strategy, which is key. But they're looking at you as the whole person. And so having someone with that high level visual, of your financial situation is really, really wise. And so if you're looking for someone, make sure to check out SmartFester Pro. I can leave a link in the description to find a professional your area

that you can sit down with because, again, it's sitting down with somebody that knows what they're doing in this area is so, so key. Okay, so, is it possible for older generations to retire? Yes, it is. And again, it may take some unique strategy,

but it's never too late. So, leave this video with a lot of hope, you Gen Xers and your boomers out there because it is possible. And just to know, the biggest turnaround that you're going to have in your financial situation is up to you. It is you.

You're the one that's going to change the course of your future financially from this day forward, and you can do this. All right, if you found that this episode helpful, make sure to share it with a friend or a relative who may need help in this area. And if you want to dive it deeper into investing,

make sure to check out my episode, investing for total beginners by clicking here or using the link into the show notes if you are listening on podcast. All right, you guys, remember to take control of your money and create a life you love.