davesays300 green

KENTUCKY (8/18/13) – This week Dave discusses "Buying a house with 403(b) money" and "What term does he need?"

 

Dear Dave,
Should I take advantage of a 403(b) withdrawal in order to buy a house? - Bryan

Dear Bryan,
I wouldn’t do that because it really doesn’t accomplish anything. The only money you can take out is what you’ve put in, and any growth you’ve experienced has to stay in there. Basically, it’s a retirement plan, and I wouldn’t monkey around with retirement money to buy a home.

My advice is to make sure you’re debt-free and you have three to six months of expenses set aside in an emergency fund. Once you’ve taken care of those issues, you can pile up a bunch of cash in a money market account toward the purchase of a home. You won’t earn a lot of money, but it’s a safe place to park your cash when you’re saving up for a big purchase.

When it comes to saving and investing, I’m a big fan of mutual funds. The problem in this scenario is that if you start sticking money in mutual funds, then the market is down when you’re ready to buy, you could’ve lost some money. That’s not the route I’d want to go if I’m in your shoes, Bryan. I’d forego the opportunity to make money in order to keep it safe for this goal. - —Dave

Dear Dave,
I’m 24 years old, and I have a wife and child. We’ve been following your plan, and I’m about to buy life insurance. Should I get a 20- or 30-year term policy? - Derek

Dear Derek,
I think the big question is how long will you need this life insurance. If you and your wife are planning on having more kids in the next 10 years, I’d suggest a 30-year policy. That could put you in a situation of being 34 years old with a new baby. That’s not old by any means, but your wife will need 20 years’ worth of coverage if this happens, because you’d want the kids grown and out of the house before the insurance term runs out.

But that’s just one of your financial goals at this point. You also want to be debt-free. And you need to ask yourself some other questions. Are you going to have your house paid for 15 years from now? I sure hope you didn’t take out more than a 15-year mortgage. Are your kids going to be grown and gone by then? Are you going to have a big pile of money in the bank by then? In other words, where are you going to be at the end of the term?

If 15 years from now you have $700,000 in your retirement account, your house is paid for, and the kids are out on their own, then, if you die, your wife will be fine, financially speaking. But at that time, if you still have kids in the house and your home isn’t paid off, then you’d probably need a 20-year policy.

That’s how I would look at it. How much longer are you going to need life insurance? - —Dave

* Dave Ramsey is America’s trusted voice on money and business. He’s authored four New York Times best-selling books: Financial Peace, More Than Enough, The Total Money Makeover and EntreLeadership. The Dave Ramsey Show is heard by more than 6 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the web at www.daveramsey.com.


Disclaimer: The content supplied by columnists and letters to the Editor on this site does not in any way, shape or form, implied or otherwise, necessarily express or suggest endorsement or support of any of such content, statement, or opinions therein. SurfKY News does not necessarily adhere to or endorse content provided by outside non-staff sources.

e-max.it: your social media marketing partner

LIKE SurfKY on Facebook - Click here to LIKE us now.

© Copyright 2015 SurfKY News Group, Inc. All rights reserved. This material may not be published, broadcast, or rewritten without permission. SurfKY News encourages you to share this story on social media.

In Other News...

Hopkins County Misdemeanor Indictments

HOPKINS COUNTY, Ky. (6/2/15) — The following misdemeanor indictments were recently handed down by a Hopkins County… Read More

Madisonville Police Arrest Reports Released - June 1, 2015

MADISONVILLE, Ky. (6/1/15) — The Madisonville Police Department released the following reports Monday, June 1. Thomas… Read More

Most Read This Week

May 27, 2015 7364

VIDEO: Sparks Fly Over Hanson Rezoning Issue

by Tammy Holloway, SurfKY News
May 30, 2015 6774

Study of Virus Attack on Cancer Sees Success

by Julie Heflin
May 28, 2015 6468

Four Charged with Burglary for Entering Elderly…

by SurfKY News
May 27, 2015 4214

Midnight Ride on Rabbit Ridge Ends in Jail

by SurfKY News
May 27, 2015 3682

Crime Stoppers Top Most Wanted - May 27, 2015

by Crime Stoppers

Most Read This Month

May 15, 2015 11282

New Madisonville Business In Full Operation Soon

by Tammy Holloway, SurfKY News
May 23, 2015 9118

Missing 5-Year-Old Boy Found

by Doreen Dennis, SurfKY News

Stories Trending Now

May 31, 2015 1143

Hopkins District Court Fines Handed Down

by SurfKY News
June 01, 2015 1100

Authorities Discover Meth Lab While Assisting…

by SurfKY News
May 31, 2015 1006

Survivors, Caregivers, Supporters Gather for…

by Tammy Holloway, SurfKY News
June 01, 2015 921

Madisonville Police Arrest Reports Released -…

by SurfKY News
June 01, 2015 562

Dawson Springs Police Reports Released

by SurfKY News
May 31, 2015 537

Muhlenberg County High School Holds 2015…

by Charles W. Riley II, SurfKY News
June 01, 2015 504

UPDATE - Pursuit Ends in Two Vehicle Injury…

by SurfKY News
June 01, 2015 483

Human Relations Coordinator Identifies Possible…

by Tammy Holloway, SurfKY News
June 01, 2015 481

KSP Post 2 Activity Report - May 2015

by Trooper S. C. Recke
May 31, 2015 460

Madisonville Fire Department Report - May 31, 2015

by Doreen Dennis, SurfKY News