SECURITY CENTER
COLUMNIST / BLOGS
TOOLS
PODCASTS/VIDEOS
Dave Says
Dave Ramsey is America's trusted voice on money and business, and CEO of Ramsey Solutions. He has authored seven best-selling books, including The Total Money Makeover. The Dave Ramsey Show is heard by more than 12 million listeners each week on 575 radio stations and multiple digital platforms. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com. |
Saving for your retirement is crucial for your future. It is ideal to start this plan after debt has been paid off. However, life can through some curveballs at you and that's ok as long as you're not loosing the money. That's a Lot! Dear Dave, I'm on Baby Step 1 of your plan, and I work at a community college that takes a mandatory 20 percent from our pay for retirement. I know you say retirement contributions should be put on hold until all debt except for your home is paid off, so do you have any thoughts on this kind of system? It feels like it's hard to get traction with getting control of my money when so much is being taken out of every paycheck. Kristi Dear Kristi, That is a lot to take out. I’ve heard of a few places that have a mandatory 12 percent contribution, but 20 percent? That’s very unusual. And it’s unusually high. I’m not sure what to tell you. I mean, you took the job. It’s what you signed up for. But if it becomes enough of an issue with your finances, you may have to decide at some point if you still want to work there. My recommendation is to begin setting aside 15 percent of your income for retirement after you’ve paid off all debt except your home, and you have an emergency fund of three to six months of expenses in the bank. At least you’re not losing the money, so it’s not the end of the world. It’s your money that’s going in there for your use some day. I don’t know the exact structure of the retirement account, but it is going toward retirement savings of some kind—and that’s important! - Dave |
Archive |
|