When it comes to building a solid financial foundation, money guru Dave Ramsey believes age or starting late isn’t a factor – and you can be stable with just a few decisions judicious financial statements.

This is what Ramsey told a 50-year-old woman, widowed for 15 years, who recently called the Dave Ramsey show asking for advice on how to save for retirement. She helped put her children through college and ran the household alone for more than a decade.

She revealed that her responsibilities did not allow her to prioritize her life goals, including her retirement plans. Even though she now has the flexibility to start building retirement savings, she doesn’t know where to start, what investments to make and how much she should contribute each month.

Ramsey presents a simple solution

After hearing about the woman’s financial struggles, the finance guru revealed a simple formula to improve her situation. He explained that if she saved and invested $1,000 a month for 15 years from today, she would have assets worth almost $500,000 by age 65.

However, Ramsey clarified that she won’t be rich, but that half a million dollars will keep her from spending her retirement in the cold and hungry. While this strategy can help achieve a more stable state in retirement, there are several other ways the widow can try to further increase her savings.

Besides this tip, here are some other ways to help you build a nice honeypot even later in life:

Take advantage of catch-up contributions

Americans age 50 or older can make additional contributions to their tax-advantaged retirement plans, such as 401(k)s or individual retirement accounts (IRAs), on top of the annual contribution limit to cover lost time. In 2024, 401(k) account holders can contribute up to $23,000.

However, people 50 and older can invest an additional $7,500 as catch-up contributions to bring the total amount they can put into a 401(k) to $30,500. People without access to 401(k)s can contribute up to $7,000 per year to IRAs in 2024. However, those over age 50 can contribute an additional $1,000 or $8,000 to the retirement account tax deferred.

If the woman on Dave Ramsey’s show maxes out her 401(k), given that she has one, from age 50 to age 65, she could amass a fortune north of America. $800,000considering an annual investment return of 8%.

Hire a financial advisor

Starting retirement planning from zero to 50 can be intimidating for most. A person’s risk tolerance generally decreases as they age, making it difficult to invest in growth stocks in a volatile market. The situation becomes more complex if you lack financial knowledge.

It is therefore imperative for the widow to hire a financial advisor following fiduciary standards because these experts are mandated by law to work in the best interest of their clients. Experienced advisors help you create a comprehensive, personalized financial roadmap that fits your financial situation and goals.

Certified financial planners can help optimize capital allocation, provide exposure to growth stocks while hedging market risks, and navigate financial pitfalls during economic upheaval. This way, you can stay on track until retirement while ensuring that advisors aren’t pressuring you to buy products that benefit them or pay exorbitant fees that many charge.

Finding the right financial advisor is crucial since these relationships last for years and could make or break your future dreams. SmartAsset, a billion-dollar company, solves the problem of finding the right advisors for clients’ needs by connecting you with up to three licensed fiduciary experts when you fill out a form. short online questionnaire.

SmartAsset’s concierge team will arrange a free interview with the advisors, allowing you to decide if they are right for you. The company claims to connect more than 50,000 people with fiduciary financial advisors each month.

Disclaimer: Our digital media content is for informational purposes only and not investment advice. Please carry out your own analysis or seek professional advice before investing. Please remember that investments are subject to market risks and past performance is no guarantee of future returns.