Is 57 too late to start saving for retirement? Dave Ramsey says 'of course not'. What to do now to build nest egg

When Susan, a 57-year-old surviving successful Florida, called into The Ramsey Show, she admitted thing that millions of Americans softly consciousness but seldom accidental retired loud.

"I ne'er thought astir retirement,” she told co-hosts Dave Ramsey and John Delony. “It was conscionable thing not successful my vocabulary.”

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After spending her 20s and 30s enjoying beingness without overmuch thought to the future, she present finds herself with humble savings, a tiny IRA and a sinking feeling that she's tally retired of time.

Is it excessively precocious for maine to deliberation astir retirement?" she asked (1).

Ramsey laughed and reassured her with a clear, “Of people not!” But she has to get busy.

Susan explained that she fell down erstwhile her catering concern cratered during the pandemic, costing her $4,000 a period successful mislaid income and forcing her to merchantability her home. Five years later, she's inactive struggling to recover.

"I deliberation I've been making immoderate mediocre decisions," she confessed.

Although Ramsey acknowledged she's "still surviving successful the trauma and the pain” of the pandemic, helium said wallowing successful past mistakes won't alteration her future. The question wasn't whether she should person started earlier, but what she could bash now.

Susan has $57,000 successful her IRA and earns $50,000 a year. Ramsey recommended she prevention 15% of her income — $7,500 per twelvemonth — successful a Roth IRA invested successful maturation banal communal funds.

Delony told her if she contributes $7,500 a twelvemonth to a Roth IRA for the adjacent 20 years, she should person conscionable implicit $1 cardinal by the clip she’s 77, assuming mean marketplace returns.

Ramsey added that she volition gain much erstwhile she gets her catering concern going again and if she applies utmost wealth to her nest egg, she whitethorn scope a cardinal by 67.

It's worthy noting that Ramsey and Delony’s projections presume accordant contributions and mean marketplace returns.

The S&P 500 has delivered supra 10% mean yearly returns implicit the agelong word with dividends reinvested (2), but it’s important to retrieve that past show doesn't warrant aboriginal returns.

So starting precocious doesn't mean starting from zero. Even modest, accordant savings tin turn importantly implicit 10–20 years.