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Is It Too Late to Start Over at 46? · Becoming Financially Confident

• 0:37
  Is 46 too late to start over financially?
• 0:41
  That's not a hypothetical.
• 0:42
  That's a real question from someone who just lost everything, and I mean everything, through no fault of their own.
• 0:49
  Their story is going to stop you in your tracks today, and the answer to that question might just surprise you.
• 0:55
  So stick around.
• 0:56
  We're getting into this right now.
• 1:07
  Hello and welcome to Financially Confident Christian.
• 1:10
  I'm Ralph Estep Jr.
• 1:12
  And today we're going to talk about rebuilding your financial future when life has taken more than its share.
• 1:18
  The question we're going to answer today, Is it too late to start saving for retirement at age 46?
• 1:24
  If you've ever been through something hard and you're wondering, is there still time?
• 1:28
  I am so glad you're here today.
• 1:30
  And before I jump into today's question, I want to remind you, if you've got a question for this show, I want to hear it go to financiallyconfidentchristian.com/question We'll put a link in the show notes, but let's get right
• 1:43
  into today's listener question.
• 1:45
  Listener writes this Hi, Ralph.
• 1:47
  I'm 46 years old and I feel like I've lost everything in the last five years.
• 1:53
  My husband and I went through a divorce.
• 1:55
  We eventually reconciled, but that led to bankruptcy.
• 1:58
  Then we were both diagnosed with cancer, eight months apart from the medical bills were brutal.
• 2:04
  I had to cash out my 401k just to keep us afloat.
• 2:08
  I have a new job now making $85,000 a year.
• 2:12
  My husband's a teacher and he makes 50,000.
• 2:15
  We still have some debt, and after all of our bills, we have a couple hundred dollars left at the end of the month.
• 2:21
  Our mortgage is $2,500 a month, and we've got 26 years left.
• 2:26
  My new company offers a 5% 401k match for the first two years and then 10% after that.
• 2:33
  I know I need to start somewhere, but is it too late?
• 2:37
  And if not, what's the minimum I should put in every month to have any kind of life after 65?
• 2:43
  Thank you.
• 2:45
  Let me say this.
• 2:46
  You have been through a great deal, but starting at 46 with a strong match and a real plan isn't starting over at all.
• 2:54
  It's starting smart.
• 2:56
  So let's get into how to make this work.
• 2:58
  The first thing you've got to do is you've got to run the real numbers and get that match.
• 3:02
  First.
• 3:03
  Let's talk about what you do have.
• 3:05
  And you've got some great things here.
• 3:07
  You've got combined income of $135,000 a year.
• 3:12
  That is probably in the top 20% of wage earners in the United States.
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  Another great thing you have is an employer match.
• 3:19
  A that's real money that's in your pocket.
• 3:22
  It's part of your compensation.
• 3:24
  And then you told me this great thing.
• 3:25
  You said, Dave, for the first two years, they match 5%.
• 3:29
  Well, think about it like this.
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  If you put 5% in, that's about $354 a month on your $85,000 salary.
• 3:38
  With their match, you're actually putting away over $708 a month.
• 3:43
  If you just take that for the next 19 years and at a 7% average return, you're going to have anywhere between 340 and $370,000 by the time you turn 65.
• 3:56
  But even better part, you said after two years you've got a 10% match.
• 4:00
  So take that $354 contribution.
• 4:03
  They're going to add 708 to it.
• 4:05
  That means your monthly contribution is over $1,000 a month.
• 4:11
  19 years of compounding interest, that's some serious retirement money.
• 4:16
  So here's the priority order for today.
• 4:18
  Contribute the 5% first and then match.
• 4:22
  It's an immediate 100% return.
• 4:24
  Then put any extra towards that high interest debt.
• 4:27
  You mentioned you had some debts to pay off.
• 4:29
  The first thing you've got to do is put the money into that retirement plan so you get that match.
• 4:34
  And as that debt clears, that's going to free up some payments so you can raise your contribution.
• 4:39
  Listen, the match alone just that wonderful thing makes participating a financial win from day one.
• 4:46
  And the math actually works in your favor if you start now.
• 4:49
  Now, let's talk about something else you talked about.
• 4:51
  You mentioned that mortgage.
• 4:53
  You said you had a mortgage at $2,500 a month and you've got 26 years.
• 4:58
  You're going to be paying that into your late 60s.
• 5:01
  Now, a lot of people would say, but I wanted to be paid off by now.
• 5:04
  You've been through tough times.
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  You didn't expect these things to happen.
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  So that's not a crisis.
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  You just have to plan around it.
• 5:11
  One of the ways you can plan around it, and I tell clients to do this all the time, is make some extra small principal payments as your income grows and then think about what this is going to look
• 5:22
  like in retirement.
• 5:23
  Look at your full retirement income.
• 5:26
  That 401k that we just talked about a few minutes ago.
• 5:29
  That's what you're building now.
• 5:31
  Your husband also probably has A teacher's pension.
• 5:34
  And you need to find out what the expected benefit of that is.
• 5:37
  And then, of course, you've got Social Security at 65.
• 5:40
  You can find out about that@ssa.gov so before you start panning about that mortgage, know your full retirement income.
• 5:48
  Picture your 401k, your pension, if your husband has one, and that Social Security, I think you're really going to be all right.
• 5:55
  But here's the next thing I want to tell you.
• 5:58
  Give yourself some credit.
• 6:00
  You survive what most people only read about.
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  To have both of you go through a divorce, both of you to have cancer is eight months apart.
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  That's an amazing survival story.
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  And you're still working, you're still asking questions.
• 6:17
  Every dollar that you put in now is a dollar of your future that yourself doesn't have to worry about later.
• 6:24
  As you pay off that debt, you can increase that contribution.
• 6:27
  Maybe you just add 1% a year as that debt drops off.
• 6:31
  Those small increases add up faster than you think.
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  The question for you isn't whether you can rebuild.
• 6:37
  It's how committed you are to starting today.
• 6:40
  Now, I want to get back to your letter a little bit.
• 6:43
  You said finances are not your strong suit.
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  And with everything you've been through, that's not a character flaw.
• 6:50
  That's a survival response.
• 6:53
  I think back to what you said in the middle of cancer, in the middle of bankruptcy.
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  You weren't thinking about compound interest.
• 7:00
  You were thinking about how to survive tomorrow.
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  That's wisdom.
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  That's not weakness.
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  And I want to say something about faith.
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  Faith doesn't promise a smooth road or untouched savings.
• 7:13
  It promises you're not alone in the wreckage.
• 7:16
  And I just Love what Jeremiah 29:11 says.
• 7:19
  It says, God knows plans for your future, not for disaster.
• 7:24
  And that promise has no cutoff date, not at age 46.
• 7:29
  It doesn't ever have a cutoff date.
• 7:31
  And what you're doing today, you're asking, you're showing up, you're looking forward.
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  Those things all take a great amount of courage.
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  And that right there is faith in action.
• 7:43
  You made it through things that would have stopped most people cold.
• 7:47
  That same strength is going to carry you in this next chapter.
• 7:52
  As I think back, don't beat yourself up about this.
• 7:55
  You didn't cash out your 401k because you gave up.
• 7:58
  You didn't go on some spending splurge.
• 8:00
  You did it because you refused to quit.
• 8:03
  So here's your win for today, and this is very specific to your situation.
• 8:07
  Enroll in your company's 401k at 5%.
• 8:10
  Listen, before you finish this episode, stop what you're doing right now and go do it.
• 8:14
  If you're not already enrolled, find the HR people or the benefits people with your company and confirm that you've got that 5% in.
• 8:22
  You're going to leave money on the table if you don't do that.
• 8:25
  Verify that you're putting that 5% in.
• 8:28
  And then write down what that 5% match is worth annually.
• 8:31
  Because what you're going to start seeing is how much money that frees up in your paycheck.
• 8:36
  Which leads me to our Bible verse to today, It's Joel, chapter 2, verse 25.
• 8:42
  It says, the Lord says, I will give you back what you lost to the swarming locusts, the hopping locust, the stripping locust, and the cutting locust.
• 8:52
  You're probably thinking, ralph Locust, what does this have to do with anything?
• 8:55
  But that was written for people who lost everything due to forces outside their control.
• 9:02
  Just like you had that situation.
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  It wasn't because you failed.
• 9:06
  It's because the locusts came.
• 9:08
  Your locusts had different names.
• 9:10
  They were called divorce, bankruptcy, cancer, medical debt.
• 9:16
  Yet here you are, you're still standing, you're still asking what comes next.
• 9:22
  That's exactly who this verse was written for.
• 9:25
  I just want to pray together right now, Heavenly Father.
• 9:29
  I'm praying for this listener today.
• 9:32
  This is a woman who has carried more in five years than most people carry in a lifetime.
• 9:38
  She survived cancer, she survived bankruptcy.
• 9:41
  She survived watching her savings disappear.
• 9:45
  And she's still here, Lord.
• 9:46
  She's still fighting.
• 9:48
  And I just ask today that you would give her peace about where she's starting from, Lord, and give her courage to take that next step forward today.
• 9:56
  Free her from that lie that she missed her window, Lord, and let her see what she has is enough to build on.
• 10:04
  They can work together just one paycheck at a time and build that plan.
• 10:08
  And, Lord, we trust you're not done with their story.
• 10:11
  I just know that there is more to come for them.
• 10:13
  And we just ask this in Jesus name.
• 10:16
  Amen, friend.
• 10:19
  You've walked through fire and you're still asking how to build.
• 10:22
  That matters more than any number.
• 10:24
  So today's takeaways is contribute that 5% to get that full match.
• 10:28
  Hey, that's free money.
• 10:30
  The math still works.
• 10:31
  You got 19 more years.
• 10:32
  I told you about how much money you can have.
• 10:34
  So match, first knock down that high interest debt, know your full picture and increase it as your income increases.
• 10:42
  And like I said earlier, if you've got a question for this show.
• 10:45
  I would love to hear from you.
• 10:47
  You can send in your questions or even better, you can record a voicemail aat financiallyconfidentchristian.com/voicemail.
• 10:55
  We'll put a link in the show notes, but again, that's financiallyconfidentchristian.com/voicemail I just want to thank you so much for joining me today.
• 11:04
  As I always say, stay financially savvy.
• 11:06
  May God bless you.
• 11:08
  And you have a truly great day.
• 11:27
  Oh, we.