The old saying “timing is everything” is especially relevant to your question of renting or owning. There are definitely points in all of our lives where renting makes all the sense in the world. To name a few, these include times when:
• Employment is uncertain, or job security is lacking;
• You will live in a particular location for only a few years; or
• Your proverbial ducks are not in a row (for example, when a mortgage payment doesn’t fit into your budget, you don’t have an emergency reserve, or you have no down payment or “move-in” fund).
On the other hand, owning a home is the original American dream. In the right circumstances, buying a home can allow you to build equity over time, potentially benefit from tax deductions, and ultimately know that the roof over your head is not contingent on anyone else’s whims or rent demands. So, do I think you should use retirement vehicles like a 401(k) to build a robust nest egg for retirement? Yes. Do I think owning a home is a good thing under the right circumstances? Again, yes. The bottom line is that regardless of where you live, you should be saving for your financial security and retirement. The decision to buy a home should be based on your own specific financial situation and outlook. If the time is right, there’s more than enough room on your plate for both a 401(k) and a home.