Suze Orman regularly offers financial advice to those that write into her “Women & Money” podcast. Recently, 54-year-old Kim reached out about find out how to take advantage of her $12,000 savings.
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Kim disclosed that she doesn’t have any retirement plans or investment assets. The one money she has saved is that $12,000. Her employer offers a 401(k), but they do not offer a match on it, so she hasn’t began it. The one debt she has is $4,000 left on a automobile loan. “I would like to create essentially the most security for my future, especially at my age,” Kim wrote.
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Immediately, Orman advised against starting the employer 401(k). “Given the indisputable fact that your organization doesn’t match the 401(k), I don’t want you to place a penny of their 401(k). Useless.”
From there, Orman outlines three things Kim should do to maximise her savings. First, Orman tells Kim to place $8,000 right into a Roth IRA. She recommends putting it right into a money market account, making around 4%.
In 2024, the contribution limit for Roth IRAs is $8,000 when you’re 50 or older ($7,000 when you’re younger than 50). The good thing about this strategy is that Kim can still access her contributions tax and penalty-free, so long as she doesn’t touch her earnings on those contributions.
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The second piece of recommendation Orman gives Kim is to open an Ultimate Opportunity Savings Account with Alliant Credit Union. “I’d put $100 a month in each month,” Orman says. “It’ll be earning 3.1 percent interest. Again, when you need it, you’ll be able to get it any time you wish, but it should be earning 3.1 percent interest. But at the tip of those 12 months, they will provide you with $100.”
The final thing Orman addressed was Kim’s automobile loan. She advised Kim to pay that off quickly with anything she had left. The less expenses Kim has, the more she’ll find a way to avoid wasting and put toward securing her financial future.
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Kim is not alone in this example. In line with an AARP survey, 20% of Americans ages 50 and up do not have retirement savings. And 61% of this demographic are fearful they will not manage to pay for to support themselves in retirement.
“America is facing a serious retirement crisis. AARP has an extended history of supporting laws to expand access to retirement savings. Still, Congress must act more swiftly to supply the financial support older Americans need and deserve,” said Nancy LeaMond, AARP Executive Vice President and Chief Advocacy & Engagement Officer.
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This text 54-12 months-Old Woman With No 401(k) And Only $12,000 In Savings Seeks Suze Orman’s Advice, Orman Says ‘Put $8,000 Into A Roth IRA’ originally appeared on Benzinga.com
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