No retirement cash at 58

Posted: Sep 13, 2017 12:01 AM
No retirement cash at 58

Dear Dave,

I’m 58 years old and have nothing set aside for retirement. My wife and I are on Baby Step 2 of your plan and paying off debt. We have $37,000 in debt not counting our home, and five kids still at home. We have a household income of $73,000 a year, and were wondering if we should go ahead and start Baby Step 4, investing for retirement, instead of paying off the debt.


Dear Dan,

Your most powerful wealth-building tool, both mathematically and factually, is your income. The most powerful way to build wealth — whether it’s playing catch-up at 58 or starting at 28 and becoming wealthy over the long haul — is to have your income available. That means it’s not flying out the door every month to make debt payments.

Fifty-eight is not old, but you do have to get busy if you want to retire with dignity. I’d really lean into this debt and make it disappear in the next 18 months. I’m talking about sticking to a tight budget, living on rice and beans, and selling so much stuff around the house those kids think they’re next!

After that, you’ll have to throw every dime you can into building an emergency fund of three to six months of expenses. And after that, you’ll have to spend 10 years going crazy saving for retirement by pouring about $12,000 a year into good mutual funds.

Can you do that and win, and by “win” I mean retire with some dignity? Yes, you can. But it’s not doable if you’ve got $37,000 in debt hanging around your neck!

— Dave