How Should I Save My Money - For a Home Or For Retirement?
Many Americans are so busy
paying off credit card debt or college loans there is little left to save. If
you find yourself with extra money, most experts agree that an emergency fund
should be priority number one. If you already have this covered, your next
considerations should be between saving for your first home and retirement.
Saving For A First Home
The great thing about buying
a home is that with each house payment you make, equity is being built. A house
is it’s own investment plan, especially as we are seeing an upswing in the
economy. And you can live it in while it increases in value!
Saving For Retirement
Saving for retirement is
crucial, especially considering increases in life expectancy. A good savings
plan will mean you can spend your retirement years with more ease and freedom.
It is never too early to start a retirement savings plan. Basically, as soon as
you begin working, it is time to think about retirement planning. Participating
in your employer’s 401K plan is an easy way to get started.
Some prefer to split money
between retirement and home savings. Others invest in a Roth IRA. This money is
intended for retirement but can be withdrawn without penalty under certain conditions such as:
account older than 5 years
- The withdrawal
is less than $10,000
- Used for
the purchase of a home
once in a lifetime and spouse must qualify also (if applicable)