On The Ramsey Show – Highlights YouTube Chanel, Dan called in worried about his future. Dan recently underwent double knee surgery meaning he can no longer continue his work as a carpenter.
The finance expert explained to him what options he could consider going forward.
Dan did not know whether he could afford to retire now, or if he should wait until he is in his 60s.
He said: “I do have options. I can go ahead and retire but I’d take a penalty and draw approximately $3,118 (around £2,500) a month until the day I die which is not a bad option but it’s like I want to make sure I do the right option.
“If I make it until 62, I’d draw almost $3,800 (around £3,000) a month.
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Whilst Dan was in full-time work as a union carpenter, he was making up to $65,000 (around £53,000) each year.
Dan also had an annuity with around $34,000 (around £28,000), however, he put that in stocks.
Mr Ramsey suggested that Dan looks at another career path instead of retiring.
He said: “I mean you’re young, you’ve got a lot of things that you could do. You just can’t be a carpenter.
He explained that whether he takes retirement now or in his 60s is up to him and either one is fine.
He said: “If he takes it now, it takes the pressure off trying to make the other thing happen immediately because you have money to eat with.
“So I’m probably going to take it now just for that reason but I’m still going to say and go start another thing.
“You can’t kick your feet up with $3,000 (around £2,500) a month, you’re not done yet so you need more.”
Whether Dan takes his retirement now is not an issue.
Mr Ramsey said: “You don’t have the option of being a carpenter anymore. The only question is if you take the retirement now or wait and take it later. Either doesn’t matter, but neither case is enough so you need to create income doing something else, that’s the important part of this discussion.”
After doing research, the finance expert found data in the US showing that the decade for the highest potential income is during one’s 50s.
He continued: “Before then you’ve been gathering experience by making mistakes however now you really know things that you just didn’t know before and it puts you in a sweet spot to go cha-ching.
“So that’s why this encore career thing comes up as very important.”
More videos are available on The Ramsey Show – Highlights Youtube channel.