54-year-old woman with no 401(k) and only $12,000 in savings asks Suze Orman for advice, Orman says “Put $8,000 in a Roth IRA”

Suze Orman frequently gives financial advice to writers on her Women and Money podcast. Kim, 54, recently opened up about making the most of her $12,000 savings.

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Kim revealed that she has no retirement plans or investment assets. The only money he has saved is the $12,000. Her employer offers a 401(k) but doesn’t offer a match for it, so she hasn’t started. The only debt he has is $4,000 left on a car loan. “I want to create the most security for my future, especially at my age,” Kim wrote.

See also: Number of “401(k)” millionaires up 43% over last year – Here are three ways to join the club.

Right off the bat, Orman advised against setting up an employer 401(k). “Given that your company doesn’t match the 401(k), I don’t want you to put a dime into the 401(k). Useless.”

From there, Orman outlines three things Kim should do to maximize his savings. First, Orman tells Kim to put $8,000 into a Roth IRA. She recommends putting it in a money market account, earning about 4%.

In 2024, the Roth IRA contribution limit is $8,000 if you’re 50 or older ($7,000 if you’re under 50). The advantage of this strategy is that Kim can access his contributions tax-free and penalty-free, as long as he doesn’t touch his earnings from those contributions.

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The second piece of advice Orman gives Kim is to open an Ultimate Opportunity Savings Account at Alliant Credit Union. “I would put $100 a month in every month,” says Orman. “It’s going to earn 3.1 percent interest. Again, if you need it, you can get it whenever you want, but it’s going to earn 3.1 percent interest. But at the end of those 12 months, they’re going to give you 100 dollars.”

The last thing Orman addressed was Kim’s car loan. She advised Kim to pay this off quickly with whatever she had left. The less expenses Kim has, the more she will be able to save and invest to secure her financial future.

Trending: How Do Billionaires Pay Less Income Tax Than You? Tax deferral is their number one strategy.

Kim is not alone in this situation. According to an AARP survey, 20 percent of Americans age 50 and older have no retirement savings. And 61% of these demographics are worried they won’t have enough money to support themselves in retirement.

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“America is facing a serious retirement crisis. AARP has a long history of supporting legislation to expand access to retirement savings. However, Congress must act faster to provide the financial support older Americans need and they deserve it,” said Nancy LeaMond, AARP executive vice president. President and Chief Advocacy & Engagement Officer.

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This article 54-year-old woman with no 401(k) and only $12,000 in savings seeks advice from Suze Orman, Orman says “Put $8,000 in a Roth IRA” originally appeared on Benzinga.com

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