Hi, looking for advice to help me feel less anxious about the (distant) future. For years, my thinking was that I would buy a house or condo by 35 – a 30 year mortgage means that I have the property paid off by the time I (hopefully) retire at 65. Now, I'm not sure I'm going to make that deadline – in fact it's possible that I will never make enough money to buy property in the city I live in.
Is this a death sentence for me, literally and financially? What happens if I'm still renting when I'm 80 and don't have a ton of money saved? End up on the street? I just want some advice on what to do if I end up having to rent until I die. How should I be saving and investing differently (vs if I owned property)? Any reassurance people can offer if I do end up renting forever?
How should I plan differently if I never own property?
byu/baba_yaga_babe inpersonalfinance
Posted by baba_yaga_babe
5 Comments
If you do not own a home your savings/investment % should be higher
I’ve been running numbers for a while and practically every rent vs. buy calculator tells me that I should just rent forever
>What happens if I’m still renting when I’m 80
so?
>don’t have a ton of money saved?
yeah that’s going to be a problem, try not to do that? since you’re not buying homes you remove one of the biggest expense in your life
If you’re not going to make enough money to buy a property in the city you live in, plenty of other people in your city aren’t able to either. And they’re fine. I’m sure most would rather own a house, but it’s not the end of the world. In most hcol places the rent vs buy calculators strongly favor renting.
If you can’t afford a house in your current area, don’t expect to ever make enough to do so, and don’t ever move out of the area, then yes, it sounds like you’ll just rent forever.
Even if you own a house, you’ll still have housing expenses (taxes, insurance, repairs, maintenance, etc). So it comes down to properly projecting your expenses to ensure you have enough saved to cover them in retirement.
You really don’t give us enough information to help you. How old are you now? What are your savings? HCOL/LCOL area?
I know plenty of people who don’t own. I probably wouldn’t except for a cat. (Long story.)
I know people in places like Boston who live with roommates and have no plans to change that.
There is senior housing so that is something to consider.
Many people use their homes to fund their retirement and sell the house to downsize or go back to renting. But not everyone does that and not everyone can.
I think what’s important is to be as intentional as you can and not do something because you think you should or everyone else in your cohort is doing it.
So keep an eye on things like the overall rental market, your financial situation, and what you want to do.
Good luck!