A recent caller to “The Ramsey Show” stirred up a complex financial and emotional situation that had both Dave Ramsey and Rachel Cruze openly concerned. Emily from Missouri, now in her early 50s, phoned in to ask whether she could use money from her 401(k) to buy her elderly mother a house—and do it without her husband knowing.
A Noble Goal With A Messy Plan
Emily explained that she started investing in her company-sponsored 401(k) at 19 and has been building her retirement savings for decades. Now, she wants to help her 72-year-old mom, who still works and has limited Social Security income, retire by buying her a home. Her plan is to pull the funds from her 401(k), place the house in a trust, and ensure her husband has no control over the property in case something happens to her.
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“I really want to do this for her so she can retire,” Emily said. “But I also want to not stir up problems with my current husband because he’s financially selfish.”
According to Emily, her husband refused multiple solutions. He said no to her mom moving in, no to buying a bigger house for everyone, and no to Emily purchasing a separate home for her. “He doesn’t even want to mow her yard. He’ll go and mow his 90-year-old father’s lawn,” Emily added.
Ramsey pushed back on that point, too. “I might not want to mow her yard either. She might bitch at me about it,” he said. “There may be legitimate reasons for that, too.”
Regarding the whole plan of buying her mom a house, Ramsey said, “What you’re trying to accomplish is noble. How you’re trying to accomplish it is whacked.”
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He warned her that withdrawing from a 401(k) in her 50s would trigger a 10% penalty on top of income taxes, turning it into a massive financial loss. “It’d be like borrowing money at 35% interest,” he said. “That would be stupid. We’re not doing that.”
Bigger Issues Underneath
Emily explained that her husband “has so many red flags” but that she’s in love with his children and grandchildren, and that’s why she’s staying with him. Cruze took a more emotional approach. “I’m just concerned for the health of your marriage, but also your enjoyment of life,” she said, pointing out that staying in a marriage solely for stepchildren and grandchildren is a difficult position.
Emily admitted her husband won't even discuss alternative ideas. That's why she considered the trust. “I would hate for something to happen to me and then him kick her out of a home that I purchased for her,” she explained.
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But Ramsey didn't let that slide: “If you’re going to do all that crap, you should be divorced,” with Cruze interjecting, “You’re enemies at that point.”
Ramsey also emphasized that deception around major financial decisions never results in a healthy outcome. Instead, he advised framing the conversation with her husband in a calm, honest way. “Honey, this really means a lot to me… help me figure out a way to do this,” he suggested.
Both hosts agreed that honoring your parents is important, but not at the expense of your retirement or marriage. “I would not do your plan, Emily. I’ll say that much,” Cruze concluded.
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