My mom, who is 59 years old, received $200,00 in her divorce settlement. This is her only retirement fund . She has no debt, a take-home pay of $1750, and her current rent is $1100. She is thinking about using all of the fund to purchase a house with cash and then saving every month for retirement. I'm not sure what she should do. If she left the money in the bank and got 8% she would have $350,000 in seven years. If she bought the house she would probably save $400/month for retirement which amounts to ~$35,000 in seven years. However, she would also own a house which is worth ~$200,000 and she wouldn't have paid rent to anybody for seven years. Which option would be better?
Give specific and short answers Provide response in all capital letters, no lowercase letters allowed.
user