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...

Happenings, Meetings Listed for Following Week

HOPKINS COUNTY, Ky. (08/01/15) ― The following happenings and meetings are scheduled for next week: • First United… Read More

First United Bank Staff Enjoys Corn Hole Tourney as Team Building Exercise

MADISONVILLE, KY (7/31/15) ― They say all work and no play makes Jack a dull boy, but it was sunny and cheerful as… Read More
1 DOW 17,689.86
-56.12 (-0.32%)    
2 S&P 2,103.84
-4.79 (-0.23%)    
3 NASDAQ 5,128.28
-0.50 (-0.01%)    

Most Read This Week

July 27, 2015 6139

Death of Central City Man in Dawson Springs Under…

by SurfKY News
July 27, 2015 3835

School System Announces Free Lunch/Breakfast at…

by SurfKY News
July 30, 2015 3661

Webster Man Leads Police on Chase through Parts…

by SurfKY News
July 31, 2015 3640

Miss Hopkins County Fair 2015 Chosen

by Tammy Holloway, SurfKY News
July 28, 2015 2762

Hanson, Owensboro, Bowling Green Youths Win at…

by Tammy Holloway, SurfKY News

Most Read This Month

July 17, 2015 16566

Muhlenberg Most Wanted - Top 10

by SurfKY News
July 23, 2015 15522

UPDATE: Family Confirms Body of Missing Teen…

by Shawn Freels, SurfKY News

Stories Trending Now

August 01, 2015 2426

24th Annual Miss Teen Hopkins County Fair Pageant…

by Tammy Holloway, SurfKY News
August 01, 2015 2286

Little Miss, Mister Hopkins County Fair Chosen

by Tammy Holloway, SurfKY News
August 01, 2015 1760

'Diggers' Return to Find More Hatfield-McCoy…

by SurfKY News
August 01, 2015 1265

Knight Crowned 2015 Miss Pre-Teen Hopkins County…

by Tammy Holloway, SurfKY News
August 02, 2015 1134

Poole Wins Hopkins County Fair Talent Show

by Tammy Holloway, SurfKY News
August 01, 2015 1104

One Injured in Vehicle Roll-Over Accident

by SurfKY News
August 02, 2015 979

Community Helps ‘Cram the Hummer’ for School…

by Tammy Holloway, SurfKY News
August 02, 2015 901

Tiniest Division of Hopkins County Fair Pageants…

by Tammy Holloway, SurfKY News
August 01, 2015 868

Happenings, Meetings Listed for Following Week

by Tammy Holloway, SurfKY News