Is It Too Late to Start Over at 46?

Speaker A00:00:37

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