Retirement

**RuthNY** · 06-16-2005, 07:44 AM

This is kinda complicated and I'm not asking for financial advice just some outside perspective.

I've worked for the gov't for 23 years. 13 years ago I resigned and pulled my retirement savings out. A year later I was reinstated. I didn't put that money back in but the time still counts towards my retirement date.

I have the option of putting that money back and raising my retirement income. The only way that makes sense is to borrow it from my existing retirement funds. I have enough in there but that would clean me out so that if I needed to tap it for something else I wouldn't be able to.

Here's the problem...This is currently my only savings. I have just paid off my debt but I have no savings yet. I am currently renting. NOT a permanent solution. I HATE renting. I need to buy my own house. Problem is I won't have a downpayment saved for in forever but I do have the option of borrowing towards a downpayment out of my retirement savings. I know that sounds stupid but I'm almost 48 and there is such a thing as quality of life. What good is it if I'm not happy in the present while saving for the future?

I do have a serious involvement with a man who wants to buy a home with me and he has the finances to put up the downpayment and we do have a home in mind but I cannot COUNT on this all happening. We aren't married. It's really dawned on me that I am financially responsible for myself and I'm just not sure what all is the smarter way to go with all this.

Best case scenario BF and I buy the house, I put all my money towards my retirement and we live happily ever after.
Real life zinger #1: I put all my money into my retirement fund then BF and I break up and I have no way to buy a house.
Real life zinger #2: BF and I break up and I pull money out for house then have got too little money to retire on.
GAH! This being on your own is not all it's cracked up to be....
Any other perspectives?

**jlxian** · 06-16-2005, 10:06 AM

Ruth, my husband recently did a similar thing. He is a teacher, and early in his career, when we thought he was giving up teaching, he pulled out 2 years of retirement contributions. Well, as it turned out he stayed with teaching and now that he is nearing retirement age he wanted to put the 2 years contributions back. He will be mid-50s when he retires from teaching --- young enough to get other non-teaching related employment if he needs to.

He has been contributing to a mutual fund for several years and we decided it made sense to roll that mutual fund money into his retirement fund to "buy back" the 2 years. Our broker was not happy about it, but we went ahead and did it.

It was a great relief for my husband that he can leave the job when he wants to without having to worry about enough years in the fund.

I realize this is not exactly like your situation, but I hope our experience can help you make your decision.

Could you borrow HALF of the retirement fund money to put back into the account? (I'm assuming these are 2 different accounts.....)

**Englishlady** · 06-16-2005, 12:39 PM

Ruth, I think you should always "Hope for the best" BUT, "prepare for the worst"!

Well, I always look at things a little differently, so the way I would try and do it is this:

Get BF to pay for new house ( he STILL wants to move am I right?)
Then offer to pay HIM what you NOW pay for your RENT, until you have saved more money......you say you have just paid off your debt and so now you have to adjust to "Paying yourself first", which includes savings, be they for Retirement or otherwise.

As BF has stayed for extended periods at your apt. I doubt that you would have charged him Rent right? so I think offering to pay the same $ amount you pay in Rent NOW,but to be offset against (your share of) the Mortgage seems pretty fair.

Until you are in a better Financial place.............

Given that you have been understanding about his issues ( with the house and stuff) it would be a little unfair of him to expect you to put all your financial eggs in one basket......

Having "been there" & done that & used the T.shirt as a warning to others

NEVER underestimate the comfort of being your own (financial) boss, some way down the line there will be plenty of time to play the happy " it's not his or hers but "ours" money" couple.

In the early days it is all too easy to get yourself lumbered with debt you can do with out (I am speaking from the experience of a very hard lesson learned

........maybe thats where my belt AND braces attitude came from!)

I confess I am not au fait with the US Retirement savings set up, but in the UK there has been big, nay massive problems with under performing Retirement funds and some people have lost more than half of and some almost all of their money

So We save as much as possible in a regular savings fund, getting the best rate we can get............no one can take it off of us, no "company" can lose it ( we hope!) and it is not dependent on any one other than ourselves.

But, the best bit is, IF, we needed to raid it for anything, we could with out any problems.
HTH
Karen

**RuthNY** · 06-16-2005, 01:14 PM

Actually Karen, That's almost exactly what he's offered. If this house were to come up soon, he suggested that he'd pay the $ for the downpayment & closing costs. Then I would make the principle payments until we had equal investment in the house. He also would put the $ from the sale of his house onto the principle balance.
This makes me feel better because then I'd be an equal and not just 'living with him'.
I told him I never wanted to get married again (I've only been divorced since 2/05 and his response was "not even if I asked you?" I think he's certain he'd like to marry, he's been divorced for 3 years now. I'm sure about him, I'm just not sure about if I could handle if something were to happen.
Anyway, he's made it quite clear that he disagrees with me tapping my retirement for anything but retiring. I do feel he's got my best interest at heart.
See, I told you we've talked. I think I'll just have to call HR and get more info. I have until December before I can do anything anyway.

**Englishlady** · 06-16-2005, 01:27 PM

Well, I wish you good luck with it all....

**couponchic** · 06-16-2005, 08:18 PM

I would leave my retirement money in my retirement funds. I wouldn't use that money to buy a house. If you were buying this house solo ~ without BF ~ I would advise getting a 100 % no money down loan. It's offered to first time home buyers. That way you can purchase your house with no money down.
I like Englishlady's idea of letting BF buy the house and you paying him rent. Just thinking that if in the future, you and BF don't work out, it could get messy if you are co-owners of the house.