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When facing major life changes, financial decisions can feel even more overwhelming. That’s the situation one listener, Susan, recently brought to Suze Orman on her “Women & Money” podcast. At 61 years old, Susan is leaving a relationship and debating whether to use her retirement savings to buy a home outright.
Orman’s advice? Take a step back — and definitely don’t raid retirement funds.
Susan and her partner co-own a home valued at about $520,000. She owns a 25% share, roughly $130,000 in equity. In addition, she has $25,000 in an emergency fund and $345,000 across retirement accounts, including a Roth 401(k) and IRA. She earns $110,000 annually and has no debt.
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The problem: Susan doesn’t want a mortgage at this stage in life. Her plan was to use her retirement savings to buy a new home mortgage-free once she receives her share of the equity from the current property. But the thought of carrying a mortgage — or draining retirement savings — leaves her feeling “very anxious and not secure at all.”
Before Orman weighed in, co-host KT offered her perspective. “Four letter word, baby: rent,” KT said. With Susan’s strong salary and financial base, KT recommended renting for a couple of years rather than rushing into another major purchase immediately after an emotional breakup.
Orman strongly agreed with KT but emphasized her own “main law of money”: when dealing with the loss of a loved one or a relationship, avoid making major financial decisions for at least one to two years.
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“This is no longer a seller’s market,” Orman noted, pointing to falling home prices and potential costs like real estate commissions if Susan sells. Until Susan knows exactly how much she’ll receive from her current home, Orman stressed that locking in a new property is premature.
And using retirement funds to buy a home? Orman didn’t mince words: “That is just the stupidest thing you could ever do simply to what? Buy another house. No way, not on our watch.”
Beyond the numbers, Orman urged Susan to pay attention to her feelings of unease. “If you’re about to do something and it makes you feel insecure — right now you feel very anxious and not secure at all, therefore, you are to do nothing,” Orman said. Once money is pulled from retirement accounts or a home purchase is finalized, there’s no undoing it.
Instead, Orman advised Susan to slow down, wait until her equity payout is clear, and only then revisit her housing options.
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Orman’s advice highlights a few universal lessons for those approaching or in retirement:
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Avoid draining retirement accounts early. Those funds may be needed for income, healthcare, or long-term security.
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Give yourself time after a major life change. Decisions made under emotional stress may not serve long-term goals.
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Check your gut. If a financial move makes you feel uneasy, it may be a signal to pause.
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Consider renting as a temporary option. It can provide flexibility while you assess your financial footing.
For Susan, waiting could mean greater clarity — and financial stability — in the years ahead.
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This article A 61-Year-Old With $345K In Retirement Savings Wants To Cash Out To Buy A $520K House — Suze Orman Says ‘No Way, Not On Our Watch’ originally appeared on Benzinga.com
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