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Make your Home Purchase a Part of Your Retirement Plan

Most homebuyers do not realize the many investment opportunities within buying a home. Purchasing a home is a large financial undertaking and there are many benefits associated with it. However, purchasing your home should be a part of your financial planning.  If done correctly, purchasing a home can be an investment that contributes toward retirement.

Here are some ways to ensure your home purchase doesn’t hinder your retirement plan:

Continue to Budget for Retirement

Retirement is one category that can often be left out of budgeting despite it’s importance. It is critical while purchasing a home that you include retirement savings in your budget. This may mean being more conservative on the purchase price of your home, but it will ensure that you are still saving for your retirement while adjusting to your new monthly housing expenses.

Invest any Tax Breaks from Homeownership

There are many tax benefits associated with owning a home. The first year of homeownership you may not know what to expect in terms of tax breaks. Use any tax refunds from that first year to invest into an Individual Retirement Account.

Earn rental income from your property

Another way to allow your real estate investment to contribute to your retirement is to keep your home. As time progresses and you are ready to move into a bigger home or a new neighborhood consider renting your current home. Invest any rental income beyond home maintenance and mortgage payments into retirement savings.

Build Equity

Additionally, the longer you keep the home the more equity you will gain. If you buy your first home in your mid to late twenties and choose a traditional 30 year fixed mortgage, you can have the home paid off by your mid to late fifties. Once the home is paid off you can decide whether to continue receiving rental income or liquidate your assets in the home by selling the property.

Some diligent planning and unconventional thinking can lead to adding more money than anticipated into your retirement fund. Being savvy with your initial investment in homeownership can mean additional savings to enjoy in your golden years.


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Estimated Monthly Payment
$2,385