The BEST Investment For Retirement?

What is the BEST investment for retirement? Some may tell you: IRA, Stocks, Treasury Bonds, Crypto, or Mutual Funds. Wait, what is better than ALL of those? That would be a down payment on your first home. Mortgage rates declining even makes it better. It is time to build generational wealth.

Read what Dave Ramsey says about Down Payment Math and Strategy for buying your first home. Read on...

OK! Tell me more...(photos by Robin Higgins, Pixabay)

Hint! Saving for a Down Payment to buy a home is also the BEST way to save for retirement. What gives? 

Seems strange doesn't it? Save for a down payment on a home before saving for retirement. That is what financial guru Dave Ramsey says. Why? Well, read on...

Save for down payment on a "home" before saving for retirement? Your home IS your retirement.

Per Realtor.com on March 3, 2025 by Dina Sartore-Bodo, "As home prices rise, so do down payments, making it increasingly difficult for potential buyers to invest in real estate. 

While experts have suggested a multitude of ways to afford a house in the current market, financial expert Dave Ramsey proposed a radical solution to anyone trying to find the money for a down payment. 

His advice? Stop planning for the future in order to get your dream house today. 

Buy a house with your retirement savings
Ramsey’s advice on how to afford a down payment for a home in 2025 is to put a pause on contributing to your retirement funds. 

“If you’re planning to buy a house in the near future, it’s okay to hold off on your retirement savings and put that money toward your down payment," he advised in a recent blog post. 

Most financial advisors would disagree with Ramsey, noting that a pause on contributions would mean losing out on compound interest as well as employer contributions. 

But Ramsey notes that in hard economic times, if this is money you’re saving anyway, you might as well use it to buy a home, which is equally investing in your future. 

However, he warns that this strategy should only be for the short-term goal of racking up enough funds for the down payment

"Make sure this is only a quick detour (like a year or two)—not a five-year pause," he warns. 

He also advises not to pull money directly out of your retirement savings. Whatever money is already in your 401k or IRA should stay put.

"Don’t borrow from or cash out your retirement accounts to speed up your down payment savings," he writes. "Not only will you get hit with taxes and early withdrawal penalties, but you’ll also tank the long-term growth of your retirement savings—costing you hundreds of thousands of dollars at retirement."

Save for Down Payment (Photo: Nattanan Kanchanaprat, Pixabay)

The down-payment math
The age-old question of how much money one needs for a down payment has changed dramatically in the last decade. 

Historically, real estate experts advised potential buyers to have 20% available for a down payment in order to secure a home. But given how competitive the market has become due to low inventory—and how high the mortgage rates have become due to inflation—most people find 20% completely out of reach.

And, even if they can come up with 20%, more often than not, a bidding war could cause the asking price for the home to skyrocket, making it completely out of reach. 

In general, your mortgage payment should never exceed 25% of your monthly income, according to experts. And Ramsey adds that you should keep that in mind as you’re saving for your down payment, as well.

"Like with any task that seems impossible, try breaking down saving for a house into smaller steps," Ramsey wrote. "For example, saving a $40,000 down payment might feel impossible until you break it down into smaller monthly goals. If you pushed yourself to save $1,700 each month for 24 months, you’d hit that $40,000 goal."

But remember, it's not just a down payment you need to save for; it's also closing costs and potential repair needs as well.

Can you buy a house with zero down payment?
Yes, it’s possible to purchase a house with no money down—but only for some.

There are a number of government-backed loans and other down-payment assistance programs to help with a down payment, but you have to meet certain criteria in order to qualify. 

For example, designed for low- to moderate-income buyers in eligible rural areas, USDA loans require no down payment for households earning up to 115% of the area’s median income."

When YOU are ready to buy a home as part of your quality of life and also retirement strategy in Arizona, give me a call/text at 480-242-6500. I would be pleased to help you and your family buy the right home and the right price.

Meet Jeff Masich, YOUR REALTOR® in Scottsdale Arizona 

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