Published On: Sun, Jul 24th, 2022

Dave Ramsey suggests whether woman, 57 should sell home and downsize to fund retirement | Personal Finance | Finance


On The Ramsey Show – Highlights YouTube channel, the American finance personality spoke to a caller who was unsure how she could plan for her retirement. Lisa, 57, called in, wanting some advice as to whether it was a good idea to sell her home and downsize it to fund retirement.

Her husband, 60, had to take early retirement due to medical reasons so they lost his income.

He used to work as an electrical engineer but due to seizure problems he stopped and now works as a father to supplement their income, however, he does not earn as much as he used to.

Lisa works as a teacher however plans to retire in a couple of years as she felt burned out.

Working in the school system, Lisa will get a pension when she retires. If she retires in two years, she would get $1,800 (around £1,500) a month, whereas if she waits until retirement she will get all the benefits available and get around $2,300 (around £1,900) each month.

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As Lisa does not have a nest egg, this pension will be her sole income.

Since her husband retired, she wanted to know if she should sell her house and downsize.

If she sells it now, she can get out of the monthly house payments and spend time saving money. With the house sale, they can put the proceeds from the sale into their pension.

Alternatively, they could pay off their house first and then sell it after.

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Their home is worth $475,000 (around £395,000) and she explained that if they sold their house they would downsize and find a property worth $300.000 (around £250,000).

Her husband’s nest egg is about $465,000 (around £390.000) and Lisa doesn’t have one.

Mr. Ramsey explained that there’s nothing that says her husband can’t start a new business or career where he can control what he does.

He also suggested that Lisa does something that will help her finish working for the last four years.

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As her commute time is over an hour long, Mr. Ramsey said they can move closer to her work.

He suggested that a change of scenery could be very beneficial

Mr. Ramsey continued: “He needs to not think about this early retirement as mandator. I think it’s a change of direction.

“I want to encourage him to start a brand new business and have the last 20 years amazing and make $1million (around £830,000),  because why not?

“You’re okay financially, you will be all right.

“If you want to make your savings grow faster because you don’t have a house payment then move down from now and pay cash for your downsize.”



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