Pick Your Community: | Hopkins | Muhlenberg | Daviess | Christian | Henderson | Lakes | McCracken | Webster

Dave Says – August 18, 2013

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.

© Copyright 2014 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 by using one of the social media links below.

3/13 - 16
3/13 - 16
button coupons

Stock Report

1 DOW 17,649.01
+292.14 (1.68%)    
2 S&P 2,047.03
+34.14 (1.70%)    
3 NASDAQ 4,722.79
+78.48 (1.69%)    
3/13 - 16
3/13 - 16
button classifieds

In Other News...

DeArmond Looks Back as Retirement Nears

GREENVILLE, Ky. (12/18/14) — Ed DeArmond has worn many hats, so to speak, during his service to Muhlenberg County, the… Read More

Elderly Couple Found Shot to Death in Muhlenberg

DUNMOR, Ky. (12/17/14) — Kentucky State Police is investigating the deaths of an elderly couple in Muhlenberg County.… Read More
3/13 - 16

Most Read This Week

December 16, 2014 9034

Coal Miner Fatally Injured in Underground Mining…

in Top News For All Sites by Dick Brown
December 14, 2014 8320

Muhlenberg Pays Homage to U.S. Armed Forces

in Local (Muhlenberg) Top News by Charles W. Riley II, SurfKY News
December 12, 2014 7918

Man Allegedly Threatening Medical Staff with…

in Local (Muhlenberg) Top News by Wes Miller
December 17, 2014 5564

Elderly Couple Found Shot to Death in Muhlenberg

in Local (Muhlenberg) Top News by Trooper Stu Recke
December 17, 2014 5467

Three Men Charged with Burglary

in Local (Hopkins) Top News by Madisonville Police Department
December 15, 2014 4708

Hopkins County Woman Charged Second Time in Two…

in Local (Hopkins) Top News by Charles W. Riley II, SurfKY News
December 12, 2014 4627

Man Allegedly Hits Brother with Pickup Truck…

in Local (Muhlenberg) Top News by Wesley Miller
December 15, 2014 4234

Woman Leads Police on High-Speed Chase in Stolen…

in Local (Hopkins) Top News by Madisonville Police
December 12, 2014 3747

Man Accused of Public Intoxication, Stealing…

in Local (Hopkins) Top News by Madisonville Police Department
December 15, 2014 3207

Vehicle Careens down 150 Foot Embankment with…

in Local (Hopkins) Top News by Madisonville Police Department

Stories Trending Today

December 17, 2014 5564

Elderly Couple Found Shot to Death in Muhlenberg

in Local (Muhlenberg) Top News by Trooper Stu Recke
December 17, 2014 5467

Three Men Charged with Burglary

in Local (Hopkins) Top News by Madisonville Police Department
December 17, 2014 1858

Madisonville Police Arrest Reports - Dec. 17, 2014

in Hopkins News by Madisonville Police Department
December 17, 2014 1412

KSP Charges Grayson County Man with Crimes…

in General News For All Sites by Sherry H. Bray
December 17, 2014 1369

Harney-Led Lady Mustangs Top Ohio County

in Local (Muhlenberg) Top News by Steve LeMaster
December 17, 2014 1314

KYTC Announces Winners of 2014 Adopt-a-Highway…

in General News For All Sites by Lisa Tolliver
December 17, 2014 1240

Mustangs Earn District Win over Ohio County

in Local (Muhlenberg) Top News by Steve LeMaster
December 17, 2014 1182

Princeton Road Drug Investigation Results in…

in Local (Hopkins) Top News by Madisonville Police Department
December 17, 2014 874

Change to Holiday Schedule for LBL Administrative…

in Local (Lakes) Top News by Land Between The Lakes
December 17, 2014 807

MFD Summoned to Seminary Street for Garage Fire

in Local (Hopkins) Top News by SurfKY News

SurfKY News Group, Inc.
Corporate Office & Studio
1125 Nebo Rd.  •  Madisonville, KY 42431
270.452.2727 (phone)
  •  270.452.2249 (fax)


Contact a member of our staff: www.surfky.com/contact
Copyright © 2014 SurfKY News Group, Inc.  •  Terms of Use  •  Site Map

social fbsocial twsocial yt
social gpsocial flrsocial rss