Dave Ramsey suggests how retiree, 66, with little pension savings can get by in retirement

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Becky explained to the American finance personality that she doesn’t know what to do as her and her husband are both retired, and they don’t have a lot of savings. She said: “The future is scary for me because my husband and I are both retired, and we don’t have a lot in savings.

“We’re both on social security but it’s not much.

“The future is very scary to me.”

On a video posted on The Ramsey Show – Highlights YouTube channel in 2020, Becky called The Ramsey Show where the money saving expert gave her guidance about how she can fix her financial situation.

Becky explained that she and her husband do not have any existing debt.

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They have no money saved for retirement but have $100,000 (around £74,377.10) in the bank and $8,000 (around £5,950) in savings.

She said she gets a “small pension”, but to live on this would “be really right”.

Becky continued: “I was wondering if now would be a good time to put $14,000 (around £10,412) into a ROTH IRA (American tax free pension vehicle) because of our age.

“Everything is paid for, but we don’t have that much in savings.

“I know how fast this money is going to go because we don’t have that much in social security.”

The money guru responded: “You’re going to have to, otherwise the $100,000 is not going to last 10 minutes.

“You have to adjust your outgoings, or your income.”

He explained that she and her husband need to get on a budget and live off of the pension and social security income.

He said that they need to “maintain their life without touching the $100,000” as even if they burned through their money, with $1000 (around £743) a month it will be gone in 100 months.

“That’s an eyeblink. That’s what it is scaring me”, he said.

Mr Ramsey encouraged Becky and her husband to try and earn extra income.

Becky explained her husband could probably drive a couple days a week for somebody. However, at age 70 he gets tired.

Dave suggested the couple try and come up with ideas that can earn them income without them getting tired.

He said: “You have an income issue.

“You cannot tear into this savings unless you’ve solved your income issue. You have to make more, or budget more to live off what is already coming in, then yes I would do the ROTH. If you burn through the budget, it will not serve any purpose because you will burn through it too.”

He explained that she should not put $14,000 into the ROTH IRA unless she can get her budget balanced.

She needs to learn to live on the pension, the social security and whatever extra money they may have coming in before putting that amount into a ROTH IRA.

“You don’t have a choice, you have to balance this budget, then I’d get a ROTH”, he concluded.

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