When Susan, a 57-year-old living in Florida, called into The Ramsey Show, she admitted something that millions of Americans quietly feel but rarely say out loud.
“I never thought about retirement,” she told co-hosts Dave Ramsey and John Delony. “It was just something not in my vocabulary.”
After spending her 20s and 30s enjoying life without much thought to the future, she now finds herself with modest savings, a small IRA and a sinking feeling that she’s run out of time.
Is it too late for me to think about retirement?” she asked (1).
Ramsey laughed and reassured her with a clear, “Of course not!” But she has to get busy.
Susan explained that she fell behind when her catering business cratered during the pandemic, costing her $4,000 a month in lost income and forcing her to sell her home. Five years later, she’s still struggling to recover.
“I think I’ve been making some poor decisions,” she confessed.
Although Ramsey acknowledged she’s “still living in the trauma and the pain” of the pandemic, he said wallowing in past mistakes won’t change her future. The question wasn’t whether she should have started earlier, but what she could do now.
Susan has $57,000 in her IRA and earns $50,000 a year. Ramsey recommended she save 15% of her income — $7,500 per year — in a Roth IRA invested in growth stock mutual funds.
Delony told her if she contributes $7,500 a year to a Roth IRA for the next 20 years, she should have just over $1 million by the time she’s 77, assuming average market returns.
Ramsey added that she will earn more once she gets her catering business going again and if she applies extreme money to her nest egg, she may reach a million by 67.
It’s worth noting that Ramsey and Delony’s projections assume consistent contributions and average market returns.
The S&P 500 has delivered above 10% average annual returns over the long term with dividends reinvested (2), but it’s important to remember that past performance doesn’t guarantee future returns.
So starting late doesn’t mean starting from zero. Even modest, consistent savings can grow significantly over 10–20 years.
How are Americans doing on that?
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Kiplinger’s analysis of Federal Reserve data notes the median retirement savings for Americans aged 55–64 is $185,000 (3) — far below what many financial advisors recommend for a comfortable retirement.
Susan has saved nowhere near that, but the truth is, with $57,000 set aside for retirement, she’s ahead of many Americans.
About 28% of non-retired adults have no retirement savings at all, according to the Federal Reserve (4).
The reasons people fall behind on retirement savings are varied and often unavoidable: job loss, medical debt, divorce, caregiving responsibilities or simply never earning enough to save aggressively.
What’s important to realize is that retirement for late starters won’t look like the glossy magazine version.
According to the Social Security Administration, the average monthly Social Security benefit as of December 2024 is $1,975 (5).
For someone like Susan, who may not have decades of high earnings to maximize her benefit, that number could be lower.
Combined with her projected savings, she could potentially have a modest but livable retirement income if she makes the right moves now.
Ramsey’s prescription for Susan included several non-negotiables:
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Clear all debts
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Get serious about rebuilding her business income
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Consider homeownership again when financially stable
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Automate savings so they happen without willpower
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Increase contributions if income rises
“If you come into 70 years old with a pile of money in your Roth IRA and a paid-for house, you’re going to be in really good shape,” Ramsey told her (6).
Notice what’s missing from that picture: retiring at 62, traveling the world or living a life of leisure.
For Susan, retirement might mean working part-time till 70, living modestly and relying heavily on Social Security.
The most dangerous trap for late starters isn’t a lack of money. It’s giving up entirely.
According to the Employee Benefit Research Institute’s 2019 retirement security analysis, having access to a workplace pension (defined contribution pension plan like a 401k) makes an enormous difference, even for those who start later in life.
The research found that individuals ages 35-39 with no future years of eligibility in a defined contribution plan face an average retirement deficit of $78,046 per person (4).
In contrast, those with at least 20 years of future eligibility in a defined contribution plan have an average deficit of just $14,638 — demonstrating that consistent saving over two decades, even starting in your late 30s or early 40s, can dramatically improve retirement outcomes.
The math might not be perfect, but it’s infinitely better than zero.
For anyone feeling like Susan — that retirement is a luxury for those who “did it right” — the message is clear: it’s rarely too late to start saving for retirement.
But it is too late to rely on wishful thinking. Don’t focus on whether you should have started earlier, but on what you’re going to do today.
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The Ramsey Show (1); Stern School of Business, New York University (2); Kiplinger (3); Federal Reserve (4); Social Security Administration (5); Employee Benefit Research Institute (6)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
