Tomorrow I turn 39.
Here’s my reality check:
• I cashed out my 401k earlier in life and right now I don’t have a job.
• I’m sitting on about $50k in debt.
• The good news: I own my primary residence free and clear and I’m selling it soon for about $220k. Since I’ve lived here 2+ years, no capital gains tax.
• I have an interview tomorrow for a sales role with a $70–80k base and uncapped commissions (100k+ is realistic).
One kid almost 17
No wife
I’m done with job hopping. I’m done blowing money. I want to get this right.
My big question: How should I invest and plan for retirement from here?
I know I’m not starting at zero, but I also know I can’t afford another reset. I want to put this house money to work, pay down debt, and finally build long-term stability.
If you’ve been in a similar place, or if you’ve helped others rebuild their financial life in their late 30s, I’d love to hear your advice.
Here’s to new beginnings and a smarter financial future.
I purchased this house as a flip, it’s not in a good neighborhood and it’s too big for me, I live alone. Im seeing price drops in my market and I have too many eggs in this basket.
Im ok with renting a $1000 one bedroom apartment, while I wait out the 2 years to qualify for a conventional on a 3-4 plex I can house hack.
I had a 4 plex a few years ago that I sold like an idiot, I blew almost half of the money and the house I own now is a Hail Mary to recoup.
Turning 39 tomorrow no savings cashed out 401k and jobless
byu/Far_World_8834 inpersonalfinance
Posted by Far_World_8834
33 Comments
Start here: https://www.reddit.com/r/personalfinance/wiki/commontopics.
>How should I invest and plan for retirement from here?
Follow the flow chart in the wiki.
Realize that if you choose to cover any significant portion of college funding for the kid, you will almost certainly not reach the recommended target number for retirement. (multiple of income by age 40, 50, 60, 65)
Where are you going to live?
Start where everyone starts, at the bottom. Get a job, allocate every dollar you bring in, pay off debt (highest interest first), build savings hysa, start Roth IRA and start contributing to new job 401k. Most importantly remember this position in your life and how you feel. You’ll never let yourself fall back into this situation.
1. Have the shitty talk with your kid. If your kid wants any spending money or fun money, they’re going to have to get a job.
2. Calculate exactly what your necessary expenses are. Like, if you have no job, what would you HAVE to pay?
3. Reconsider selling the home. No mortgage payments (or rent) is colossal.
4. Follow the Financial Order of Operations : [https://moneyguy.com/guide/foo/](https://moneyguy.com/guide/foo/)
5. Remember Step 2? Yeah, you’re going to live like that for a while if you still have debt and stay in the home. Learn to make rice and beans and veggies interesting. Learn to hunt for markdowns on meats, cook them immediately. You can freeze it when it’s been cooked.
6. Re-learn how to live within your means.
The FOO will give you a good idea how to build your wealth.
You described owning your home as the only bright spot in your situation….and you’re selling it.
So where are you going to live? And are you sure taking on more housing cost is going to help?
Without details and assuming selling your house is the way to go, my initial thought is to pay off the debt and put the rest into the next house so you at least get a nice manageable mortgage.
Then max out 401k, max out Roth, and invest on top until you hit retirement age.
One day at a time. Raise income, lower expenses where possible. I’d start with building an emergency fund and putting at least enough into 401K to get the match. Don’t rush it, you can’t go back in time so just focus on positive moves forward. And your life is not defined by your net worth – I know plenty of people with money that are miserable. Being poor isn’t great either, but it’s all perspective – good luck.
Life has no ending nor no beginning. You are a point now where it isn’t over for you. Work on one goal at s time and look at the progress over time. Be well.
Let me drop 25k in your account….i never been to jail and I’m 33…take it or not
First, read the wiki, specifically the part about managing a windfall. Most important is to pay off debt, then put 6 months expenses in a savings account, max out Roth IRA and standard IRA contribution for the year, create budget/spending plan, and put the rest of it in a low fee brokerage account. When choosing investment strategies, go for low fee index funds. Vanguard is a good place to start. When you land the job, make sure you’re maxing out employer contributions to your 401k.
If you can stick to this, you should be well on your way to catching up. Stay motivated and you’ll make it out on top.
After you sell your house, I would:
1. Pay off your 50k in debt.
2. Save 6 months in a high yield savings account for an emergency fund. You can save more if you want because you’re still searching for job.
3. Invest the remaining amount in a low cost broad market index fund. An example is VOO, which is an S&P 500 ETF. If you have worked this year, then you can put $7k into a Roth IRA. Otherwise, open a brokerage account.
When you get a job, then I would recommend maxing out your 401k, Roth IRA, and HSA (if you have it) every year going forward. I would aim to save at least 25-30% of your gross income every year.
Is there any specific reason you’re selling your house? What are your plans with the money?
Do you have to sell your house? Can you live rent-free while you work on your debt, or does it need work and lots of maintenance
Do not sell your house. Borrow against it if you must, but do not sell it.
Selling your house is almost certainly a mistake.
You’ve already admitted you have blown money and been irresponsible with it in the past, and you have a kid. Having a paid off house should be the biggest stress reducer possible. That’s most people’s biggest obstacle.
Don’t sell the house. Interest rates are sky high. Really the wrong time to sell. Don’t try to “fix” previous mistakes by making more mistakes. There is no cheat code. Take advantage of not having to pay a mortgage and use that money to build a retirement fund and emergency fund, plus pay down debt.
Idk, it seems like you should keep this house unless you hate living in it. Forcing yourself to budget and figure out how to pay off the debt without selling the house will yield the best results
Don’t sell your house. It’s freedom. You don’t want a mortgage now. Not at 40.
Before thinking of investing I would tackle that 50k in debt. You’ll never get ahead properly if you do it the other way around. Learn from your mistakes and budget. Live within your means and you will be happier.
Selling your house decreases your assets and increases your liabilities for a short-term infusion of cash. Keep the low cost of living. Honestly if you don’t know what to do follow the dave ramsy Baby steps. It isn’t perfect, but it will get you to where you need.
Late but not too late still have time to correct the ship
How long have you been unemployed? I’m assuming that’s how you’ve ended up with 50k of debt.
I hope your interview works out, but if not you need to take literally any job while you keep looking. Swallowing your pride and working in fast food for a few months while you search for something better will help you enormously.
Also, don’t sell your house unless you absolutely have to. Focus on getting income.
Selling house may not be the best bet. I’ve had a house on the market for over a year. Nothings wrong with the house, just a bad time for sellers in my area. Its nothing like the market even two years ago.
Could you rent out a room in the house for extra income instead of selling it?
Second everyone else – unless you have a really good reason to, do not sell the house.
The biggest reason I say this is because it seems like it’s the only way you’ve saved money in the last 20 years.
Otherwise, keep interviewing. No job is guaranteed. Once a job is secured, make a budget and stick to it, paying off debt and building up retirement savings.
There are YouTube channels that offer free advice on your situation. They’re very non judgmental and encouraging. It’s solely advice, no trying to sell you anything. Just helpful and supportive advice. Don’t lose hope.
When your 40 and find yourself in bad circumstances… first step is unpacking how you got there.
Not just the actions, but why you did it. Whatever drove you to do dumb things…figure out how to fix that. It’s hard work and dealing with uncomfortable truths.
Ok so step one unfuk yourself.
Step 2: Start saving and paying down debt.
Step 3: come back here after you did step one and two and talk about investing once you got your head above water.
What are your thoughts on renting the house? Even hiring a property management company as to not deal with the renter part of it.
If you live in a state that will protect that $200k of equity then file chapter 7 bankruptcy. Get rid of the debt while jobless. Then sell the house or keep it. Whatever you want. That’s how I would do it.
Selling the house seems crazy to me.
Are you already committed to selling the house?(/Do you have a contract already? Or are you just planning to put it on the market?)How much is rent + utilities for a two-bedroom apartment in the area you are looking? What are your other monthly expenses? (Do you have a car payment? Insurance? Or other transportation costs? Cell phone plan? What do you spend on food and other essentials?)
Yo man, rent out rooms in the house, don’t sell it
Or rent out the whole house – bottom line is don’t sell your largest asset
Why did you even post here? Everyone is telling you to not sell the house and you still keep saying you’re gonna do it.
you are in a pretty decent position. you have net worth of almost 3x your income.
Why can’t you just buy another 4x you can rent out now? you seem to have the money for the down payment.
I mean this in the nicest way you are far from screwed so give yourself a break. the only problem is you need a job