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Your Debt or Your Retirement?

Retirement planning—or, more accurately, the lack of it—has been a hot topic for some time now, and the focus is usually on the many ways Americans are unprepared for the financial realities of retirement. It’s enough to send you into panic mode, throwing anything and everything you can into your retirement fund without any solid financial plan to back it up.

That’s a bad idea.

Build a Retirement Savings Foundation

A better choice? Wait. Yes, wait! Don’t start saving for retirement until you are financially ready. Here’s what you need to do first:

1. Get rid of all non-mortgage debt. Your income is your most powerful wealth-building tool. When it’s tied up in monthly payments, you can’t use it to its fullest potential. Use the debt snowball method to attack your debt and get rid of it for good.

2. Save an emergency fund. Once you’re debt-free, you may be tempted to stash your extra cash in your retirement fund, but now isn’t the time. Instead, save up an emergency fund of three to six months of expenses. This is the cushion you need to keep you from dipping into your retirement savings when, not if, you encounter a large, unexpected expense.

Work Your Plan

You’ll work toward those first two goals with intense focus, so within a couple of years at most, you’ll be ready to start investing for retirement. Here’s how you get started:

*Invest in your 401(k) or other employer retirement plan up to your employer’s match if there is one.

*Next, invest in a Roth IRA until you’re investing 15% of your income into these tax-advantaged retirement accounts.

*Choose good growth stock mutual funds with a history of strong returns.

Start Your Plan Off Right

Once you’re ready to start investing, it’s common to have a lot of questions. An experienced investing professional can answer those questions, help you set up your accounts, and help you select the best mutual funds for your goals.

Be confident about your retirement. Find an investing pro in your area today. 

You can find a trustworthy investing advisor through Dave’s nationwide network of Endorsed Local Providers (ELPs). Your ELP has earned Dave’s recommendation by providing outstanding service and advice.

Also, don’t overlook how important a 401(k) rollover can be. You might be losing thousands in these old accounts. An ELP can help you find out what you’re missing and show you how to put that money to work for your retirement fund. Find your ELP today!

Ramsey Solutions

About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners.

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Thank you!  Your guide is on its way.

Build Long-Term Wealth 

Build Long-Term Wealth

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Build Long-Term Wealth

Work with an investing pro and take control of your future.
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