A 66-YEAR-OLD guest on The Ramsey Show revealed that she and her husband had no retirement savings, seeking financial advice from experts.
Julia from Sacramento, California was advised to address her fears head-on and consider postponing retirement to capitalize on a Social Security rule that many don’t take advantage of.
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The 66-year-old guest in an episode of The Ramsey Show detailed her financial situation to hosts Jade and John, who offered her practical advice.
Julia explained that she had her teaching license but was not currently working and her 67-year-old husband worked as an automotive service director.
The woman noted that while their income was decent, California was an expensive state to live in.
She also shared that their home had appreciated in value but she and her husband still owed $300,000 on it.
Julia proposed several solutions she had considered, including moving to a cheaper state, taking up work as a teacher, or even opening a small business such as a coffee shop or daycare.
However, she and her husband were highly conflicted and unclear on what to do regarding their financials.
“I don’t know,” said Julia. “He just refuses to think of retirement. We have no savings.
GET THE FACTS
Jade and John stepped in to provide the frustrated woman with practical financial advice.
Jade first pointed out that moving out of California was a good idea, as Julia and her husband may not be able to maintain their current cost of living.
Julia shared that her husband had pushed back on the idea, fearing they would be unable to find a job or a home at their age if they were to move.
She explained that while her husband expressed much uncertainty regarding steps forward, he also did not have a solid retirement plan.
“He’s thinking he’s going to get Social Security, keep working, and put that money into the house payment,” said Julia, expressing her concern that they would be left with no money to live on.
Jade explained that while Julia’s husband was already able to claim his retirement benefits, delaying his retirement would considerably boost the amount of money he would receive each month from Social Security.
The financial expert, however, emphasized that what Julia and her husband were lacking was facts.
“It’s really about getting these numbers out of the air and getting solid facts for what it will be, can it work, if it doesn’t work how much do we need to be earning,” said Jade, stating that budgeting was key.
Julia shared that her husband predicted he would make around $3,500 each month if he waited to claim his benefits, but that their mortgage was $3,000 per month.
Jade noted that the couple’s mortgage was significantly high and agreed that delaying retirement was a smart move.
Social Security Payments
Claiming retirement benefits before your full retirement age permanently reduces your monthly Social Security payments.
The full retirement age, or FRA, is based on the year you were born:
- 1943–1954: age 66
- 1955–1959: age 66 and a certain number of months, increasing by two months each year:
- 1955: 66 and 2 months
- 1956: 66 and 4 months
- 1957: 66 and 6 months
- 1958: 66 and 8 months
- 1959: 66 and 10 months
- 1960 or later: age 67
Americans who retire at 62 this year, for example, can only receive up to $2,831 in monthly Social Security benefits.
Those who delay their retirement until their FRA in 2025 have a monthly benefits cap of $4,018.
Americans who wait even longer to retire, at age 70, can receive a maximum monthly benefit of $5,108.
Regarding Julia’s other concerns, Jade and John emphasized that she needed to sit down with her husband and focus on the facts of their financial situation.
John offered her a line on how to approach the conversation with her husband: “I need to know what our money situation is because I’m scared to death. Will you help me be less scared?”
“You’ve gotta address that fear with him, and then it’s a math problem,” he said.
The experts advised her to get real numbers such as how much their budget was or would be if they moved and how much Julia’s husband would make if he delayed Social Security.
They also encouraged Julia to come to terms with her current housing situation.
“That’s what’s scaring the pants off you right now – it’s just too expensive,” Jade said of her mortgage.
She added that regardless of where the couple ends up living, their housing payment should not be any more than 25% of their take home pay.
Others have felt overwhelmed by their financial situations, turning to experts for advice.
One man’s wife left him and drained $72,000 of his life savings – he was in six figures of debt, but an expert shared a simple step.
Another couple was desperate to clear $428,000 in student loan debt – an expert said they must “sacrifice” and make a “rate” change.
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