Dave Ramsey explains how a woman can’save more’ by selling her house to fund her retirement.
DAVE RAMSEY spoke with Lisa, 60, about her plans to sell her home and use the proceeds to fund her retirement.
She didn’t know what to do because she didn’t have any retirement funds of her own.
In a video posted on The Ramsey Show – Highlights YouTube channel in 2020, the American personal finance expert provided advice to Lisa and her husband, who had recently lost his job due to medical issues.
Devastated, she confided in the financial expert that she had no idea what to do because they weren’t financially prepared to retire.
Lisa had three to four years until she planned to retire, and she was unsure whether she should sell her home to fund their retirement.
Lisa is still making monthly payments on her home, which will last another five years.
“Do we sell our house now and get out of a house payment, and put the proceeds of our sale towards retirement?” she asked the financial expert.
“Or do we wait until we have completely paid off the house and then take the risk of putting it in retirement?”
Lisa stated that if she sold the house, she and her husband would downsize and relocate to a smaller home.
At the time, Lisa’s house was worth (dollar)475,000 (approximately £351,022), and she was making monthly payments on it.
She would pay for the new home outright if she downsizes and buys a smaller home.
It would be worth (dollar)300,000 (approximately £221,689), so she said she would put the rest towards retirement.
Mr Ramsey assured her that either option is acceptable.
“Mathematically, if you do it now, you won’t have a house payment and you’ll be able to save more,” he explained.
Lisa stated that she works in the school system in order to receive a pension when she retires.
She could have received full benefits if she had worked for another four years, but she told Mr Ramsey that she was “burning out.”
She wasn’t sure she could work that long because the job was taxing her.
She would receive (dollar)1,800 (around £1,330) per month if she retired in two years, and (dollar)2,300 (around £1,699) per month if she waited four years.
Lisa does not have a retirement fund and will be relying solely on her pension.
Her husband, on the other hand, has a savings account worth (dollar)465,000 (approximately £343,618).
Lisa clarified the situation.
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