A 54-year-old Woman with No Retirement Plan Gets Financial Tips from Suze Orman

A 54-year-old woman named Kim has saved $12,000 but doesn't have a retirement plan like a 401(k). So, she received advice from Suze Orman, a well-known financial advisor and host of the "Women & Money" podcast.

Kim's job offers a 401(k) plan, but they don't give any extra money to match her contributions. Besides her savings, she only owes $4,000 on her car.

Suze Orman's advice to Kim was straightforward, saying she shouldn't bother with her job's 401(k) since there's no match. Instead, she gave Kim three tips:

1. Invest in a Roth IRA

Orman told Kim to put $8,000 of her savings into a Roth IRA, specifically in a money market account that could earn about 4% interest.

This move is good because people who are 50 or older can put up to $8,000 in a Roth IRA in 2024. It's also flexible, allowing Kim to withdraw her original contributions (but not the earnings) anytime without taxes or penalties. 

2. Open a Special Savings Account

The second tip was to start an Ultimate Opportunity Savings Account at Alliant Credit Union. By saving $100 each month, Kim could earn 3.1% interest. After a year, the credit union would also give her a $100 bonus.

3. Pay off the Car Loan

Orman's last piece of advice was to pay off her car loan as soon as possible. The quicker she's free from debt, the more she can save for a comfortable retirement.

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Kim's story is not unique in any way. A survey by AARP found that 20% of Americans over 50 don't have retirement savings, and 61% worry about having enough money for retirement.

If you're like Kim, then following these tips could help you financially prepare for the future as well. 

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