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If you’re over 50 and you’re still in debt, overspending or relying on Social Security to carry the heavy burden in retirement, Dave Ramsey has a message for you — and it’s not soft.
Here are the money habits that could derail your retirement if you don’t pay attention to them now, a personal finance expert said.
1. Carrying debt until retirement
Ramsey calls debt “the single biggest barrier” to building real wealth.
“They stay in debt. Especially mortgage and car payments. Then they assume they can ‘manage’ it in retirement,” Ramsey explains. Kiplinger. “The solution is simple. Attack that debt intensely now, before you step into your golden years.”
federal reserve data It shows that debt among Americans aged 65 to 74 is set to quadruple between 1992 and 2022, making it a widespread and growing problem.
2. Not having or ignoring a budget
According to Ramsey the budget is seen as “permission to spend” rather than a punishment. Wealth. Once major expenses, debt payments and investments are covered, the remaining cash can go toward guilt-free spending. Without a budget, people routinely overspend on housing, cars, and lifestyle expenses that quietly deplete retirement savings year after year.
3. Retiring too early without really being prepared
“Don’t retire until you’re really ready,” Ramsey said. Kiplinger. “This means zero debt, a fully funded nest egg, and a clear monthly budget.”
Retiring before Medicare begins at age 65 means self-financing health care costs, which can amount to thousands of dollars annually. And collecting Social Security at age 62 rather than waiting until full retirement age could permanently reduce benefits by as much as 30%.
4. Relying too much on Social Security
Social Security was never designed to be a retiree’s sole income source — and Ramsey said treating it that way is a serious mistake. Wealth. A 2023 Ramsey Solutions study found that 42% of Americans are not saving for the future at all. money wise – That means millions of people are on track to enter retirement, relying heavily on a program that will average just $1,907 a month in 2024. social Security Administration.
5. Not saving at least 15% of gross income
Ramsey recommends saving a minimum of 15% of gross income for retirement.
“If you invest $100 a month in a good growth stock mutual fund from age 25 to age 65, that would be $1,176,000,” he said. “You’ll retire a millionaire.”
After 50, as the path to building wealth becomes shorter, saving below that threshold becomes very difficult to move forward.