Overview of We Have Nothing Saved For Retirement
This episode is a Ramsey Network coaching segment. A 42-year-old mom (Amanda) and her 48-year-old husband called in: they have no retirement savings, no consumer debt, $30,000 in cash, a mortgage with about $130k remaining (≈$300k equity), a newborn baby born unexpectedly last August, and one income (husband, $90k/year). The hosts walk them through realistic retirement math, mindset shifts, and practical next steps to get started immediately.
Key points and main takeaways
- It’s not too late: starting in your late 40s/early 50s still gives you time—compound growth can do heavy lifting if you begin now and are consistent.
- Practical strengths: no consumer debt, $30k emergency fund, home equity, and a steady income ($90k) are strong foundations.
- Prioritize retirement accounts and employer benefits: open or max out tax-advantaged accounts (401(k), Roth IRA, spousal Roth) and capture any employer match.
- Don’t liquidate low-interest mortgage: their ~3% mortgage is cheap money—don’t sell the house to fund retirement.
- Mindset shift is crucial: accept that life has changed (late parenthood), stop trying to reclaim the old spending lifestyle, and design a new life that fits priorities now.
- Expect short-term discomfort: redirecting discretionary spending toward retirement will feel like being “broke” for a while—acknowledge it and keep moving forward.
Numbers & examples used in the show
- Example savings scenarios (using a 10% assumed annual return):
- $1,000/month starting now for husband (age 48) until 67 → ≈ $676,000.
- $2,000/month → ≈ $1.3 million.
- Example breakdown: if they had $1.3M at retirement, a 10% return would generate $130k/year on paper; a safer withdrawal might use $70k/year (after taxes/expenses) if housing and debts are handled.
- Contribution vs growth illustration: their total contributions over time (
$456k in the example) are far outpaced by investment growth ($900k), highlighting compound interest.
Recommended action items (practical next steps)
- Confirm employer benefits
- Ask HR if the husband’s company offers a 401(k) and what the match is. Immediately enroll and contribute at least to the match.
- Open tax-advantaged accounts
- Husband: Roth IRA (or traditional IRA if more appropriate).
- Wife: spousal Roth IRA (eligibility depends on filing status and household income).
- Set a savings target and automate
- Aim for at least 15% of household income toward retirement eventually; start with what’s feasible now and increase over time.
- Automate contributions to retirement accounts and/or brokerage accounts.
- Budget and reallocate discretionary spending
- Redirect nonessential spending (example cited: $2,000/month) into retirement/savings accounts.
- Professional review
- Meet with a SmartVestor Pro or financial planner via RamseySolutions.com to map a detailed plan considering taxes, Social Security, and college planning.
- Preserve the mortgage
- Keep the low-rate mortgage; don’t sell the house to fund retirement. Paying it off is reasonable but consider other uses of cash first.
- Use tools & education
- Use RamseySolutions investment calculators and resources to model different contribution scenarios.
- Healthcare and cost savings
- Evaluate affordable health alternatives if applicable (e.g., the episode mentions Christian Healthcare Ministries as an option).
Mindset & behavioral advice (what makes this work)
- Reframe the past: stop trying to “get back to” the pre-baby spending life and instead create a new, intentional lifestyle that fits current goals.
- Embrace temporary sacrifice: feeling “broke” for a while is normal. Lean into that discomfort and take consistent next steps.
- Focus on identity and creativity: redesign activities (e.g., become camping/hiking-focused instead of expensive vacations) that match a lower-cost but still meaningful life.
Notable quotes
- “We had our fun. We spent it. We went on every vacation. That was awesome. And now inside this new world… we’re going to have to create a new kind of awesome.”
- “Feel that feeling and then just go do the next right thing.”
- “The growth starts to outpace the principal so quickly when you realize… if I can just start as early as possible, that’s on your side.”
Bottom line
They’re not doomed—given no consumer debt, a solid emergency fund, home equity, and steady income, starting now with aggressive, disciplined saving and taking advantage of employer plans and Roth accounts can put them on a viable path to retirement. The immediate priorities are to claim employer match, open Roth/spousal Roth IRAs, automate contributions, get a tailored plan from a vetted advisor, and adopt the necessary mindset shift to sustain the changes.