My mother is 68 and hasn’t saved for retirement – a financial professional gave me 3 steps for her to follow, but she must act fast

A WORRIED son is trying to improve his mother’s financial future.

Kevin called The Ramsey Show looking for solutions on how she could start saving for retirement.

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A conversation on the financial advice podcast, The Ramsey Showbetween a caller named Kevin and Dave Ramsey, centering on one woman’s difficult journey to retirement.

Kevin called on behalf of his 68-year-old mother.

She has $18,000 in her 401k and $60,000 in cash saved.

Her home is valued at about $500,000, according to her son, but she owes a $205,000 mortgage.

Caught in a moment of “what to do next”, she refuses to talk about her situation, according to her son, despite her concerns.

“That’s a tough question, man,” said Ramsey, who asked how much money she currently makes.

His mother makes $70,000 as a nurse, with about $2,200 going into Social Security every month, Kevin relayed.

Ramsey said her ultimate goal is to get her out of the situation and build a nest egg so she can feel comfortable until retirement.

But the financial expert said he wasn’t sure how to do that with her income and age.

Ramsey advised Kevin that if he were his mother, he would start by thinking about purchasing a condominium with cash to ensure her housing was covered.

THE PRICE OF A PERFECT PROPERTY

As soon as the subject of housing came up, Kevin threw Ramsey a curveball when he suggested that his mother could build a small house on land provided by his brother-in-law.

But Ramsey quickly shut down the idea.

“I wouldn’t build a tiny house,” he said several times. “There’s no resale for them. There’s no proven market. It’s a fad.”

Instead, he encouraged Kevin to consider real estate deals that could only increase in value and to think about long-term livable homes.

That could mean building a house on the land your son-in-law is giving you, but only if it’s a house built to last, according to Ramsey.

Where to save retirement money

There are several different places you can put the money you have saved for retirement. Each has different tax advantages, but not all are available to everyone.

401(k) – an employer-sponsored retirement account. Contributions are made pre-tax and many employers will match a certain percentage of your contributions. Taxes are paid when funds are withdrawn in retirement.

Roth IRA – an individual retirement account. Contributions are made after taxes, but withdrawals in retirement are not taxed.

TSP (savings plan) – a retirement savings and investment plan for federal employees and members of the uniformed services. They work similarly to 401(k)s, but may have more limited investment options.

Pension – an employee benefit that obliges the employer to make payments to the employee upon retirement. Pensions are becoming increasingly rare.

He advised that the property be donated to her, or transferred ownership, in the form of a signed agreement.

“Cut a package, an acre or something, and give mom an acre,” Ramsey said. “Then she [can] build a house on it and use the money from selling it.”

“This will help a lot,” he said in closing, advising Kevin’s mother to build a house for $200,000 and keep the extra $100,000 to start her nest egg.

The US Sun has covered other cases of seniors struggling to save as retirement approaches.

Watch how a woman lives on the beach for $420 a month after failing to save for retirement.

Plus, Dave Ramsey helped another cash-strapped retiree figure things out – it turned out her car was the solution.