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Rachel Cruze, personal finance expert and co-host of ‘The Ramsey Show,’ discusses why Americans are retiring early and how to save for a comfortable retirement.
If you want to set yourself up for success in retirement, personal finance expert and co-host of “The Ramsey Show” Rachel Cruze explains the number one rule to help you get on the path to millionaire status.
The expert joined FOX Business’ “Mornings with Maria” on Monday and provided tips on saving for retirement and explained how one can reap the rewards and benefit from using their work 401(k) plan.
“The nice thing is that in many 401(k) programs, when your company has a match, getting to that match and then even using programs like a Roth IRA, when you put up to $7,000 into that per year and that’s (a) tax advantage , TRUE?” Cruze pointed out. “So when you take that away, there will be no taxes on that.”
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Cruze agreed with host Maria Bartiromo, who suggested that “the number one rule for becoming a millionaire” is to put money into your company’s 401(k) plan from the beginning, without touching it, and take advantage of a Roth IRA plan, if the company offers one.
A person puts money into a retirement savings jar. (iStock)
Saving money in a 401(k) plan is a strategy for the future that will pay off in the end, emphasized the co-host of “The Ramsey Show,” which focuses on helping people take control of their money.
“It’s a long-term mindset,” the personal finance expert said, also pointing to the concerns of younger generations and investors.
“I think the problem, especially for younger people, is that we’re talking about Generation Z and even some millennials, because retirement seems so far away that it almost seems like you’re putting money into a black hole, and you’re like, ‘I’m not going to see that, so I have to deal with the problems today.'”
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He explained how one of the “big messages” the Ramsey Solutions team shares is getting people confident, getting out of debt, and developing a financial action plan.
“So getting out of debt again is one of our big messages,” Cruze continued, “and then being able to say, ‘Okay, we have an emergency fund with some cash that’s liquid and a high-yield savings account of “three to six months of expenses.”
In addition to being debt-free, having an emergency fund and a high-yield savings account, the “Ramsey Show” co-host also suggested putting “15% of your income toward retirement.”
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Cruze said there are “many great options” for people to plan their financial strategy and become millionaires.
“Being able to go and talk to your (human resources) department and make it consistent, that’s the other thing,” he added. “And then don’t take your money out of market declines because people get scared and withdraw their money and that also hurts them in the long run.”
