Financial Guidance for a 54-Year-Old With No Pension Plan From Expert Suze Orman

At 54, a woman named Kim finds herself without a retirement plan and with $12,000 in savings, wondering about her financial future. She sought advice from the renowned financial expert Suze Orman on the "Women & Money" podcast.

Kim does have access to a 401(k) through her employer, although it comes without the perk of employer matching contributions. Her only debt is a $4,000 car loan.

Orman's advice was clear and practical, focusing on maximizing Kim's current financial situation and setting up for a better retirement. Here are the three main strategies Orman recommended:

1. Invest in a Roth IRA 

Orman suggested allocating $8,000 of Kim's savings into a Roth IRA, choosing a money market account for about a 4% interest rate. 

This option is particularly good for people over 50, who can contribute up to $8,000 in 2024. Plus, it offers the flexibility to withdraw the invested money (but not the earnings) at any time without facing taxes or penalties.

2. Start an Ultimate Opportunity Savings Account

For her second piece of advice, Orman recommended Kim to open an account with Alliant Credit Union, where she can earn a 3.1% interest rate by saving $100 monthly. After 12 months, Kim would also receive a $100 bonus.

3. Eliminate Car Debt

Finally, Orman advised paying off the car loan quickly. Clearing this debt allows Kim to increase her savings, contributing to a more secure retirement.

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Kim's case is far from rare. Many Americans over the age of 50 find themselves without sufficient retirement savings, with a survey by AARP revealing that 20% lack any retirement savings and 61% are concerned about their financial readiness for retirement. 

The strategies outlined by Orman can offer a pathway toward financial security for Kim and others in similar situations.

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