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- I’m done waffling over buying a house I can’t afford. I have a better plan — it starts with renting for life. (newsbreak.com)
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The author, Jackie Lam. Courtesy of Jackie Lam.
Jackie Lam contemplated purchasing a home in Southern California for a long time, but the steep real estate prices there have put those plans on hold. She has instead decided to prioritize investing more heavily in her retirement, accepting the possibility of lifelong renting to maintain a simpler financial plan.
Trying to buy a house in Los Angeles proved daunting for Lam, with median home prices around $750,000 and steep mortgage rates. These factors led her to reassess her retirement strategies instead of pursuing homeownership.
Now, Lam is redirecting funds previously meant for a house savings account to her emergency fund and retirement accounts, including a Roth IRA and a solo 401(k). She is also investing her HSA contributions and has set up automatic contributions to ensure she hits the maximum limits by year-end.
Looking ahead, Lam plans for a retirement that might include renting indefinitely, factoring in possible relocations due to affordability or environmental concerns. She acknowledges the benefits of owning a home by retirement but sees the practicality in adapting her retirement savings to include long-term rental costs.
Lam feels more focused and less divided financially now that she has moved away from saving for a home purchase. This clarity allows her to more effectively pursue her long-term financial milestones.
For assistance in retirement planning, various robo advisors and platforms like Robinhood and SoFi Invest offer services such as IRA matches to aid in growing retirement savings.
Originally published in August 2023, this article is available for reading in its entirety on Business Insider.