Never Retire - Housing Can Make Or Break Your Financial Future

It has crushed and will continue to crush countless traditional retirement and Never Retire dreams

First, the good news that I, admittedly, often overlook:

• Roughly 51% of homeowners have a mortgage rate under 4%. 

• About 32% (including folks who are mortgage-free) have a rate under 3%.

Now, the not-so-good or downright bad news that’s difficult to ignore:

• The median sales price of a home in the US hit a record $416,000 in June, up 13.4% from last year.

• As I write this, the rate on a 30-year mortgage sits at 5.7%.

• Median rent crossed $2,000 in June for the first time ever.

Consider that median-priced home.

With 20% down today, your monthly payment comes in at $1,932.

$1,932. That’s a significant amount of money.

If you adhere to the budget principle of allocating 30% of your income towards housing (I suggest you don’t, but if you do), you’d have total monthly expenses of $6,440.

$6,440. An even more significant amount of money. Particularly if you’re of modest means and concerned you’ll Never Retire.

I can’t imagine living with, let alone heading into my fifties on the hook for that amount of money each month.

But I’m not wealthy. And I worry about this stuff.

Anyhow—

If you’re one of the mortgage holders sitting under 4%—we’ll call it 3.5%—that $1,932 payment on a $416,000 home comes in at $1,494.

A meaningful difference of $438, but still a significant amount of money.

I focus heavily on housing because it’s the most important element of your personal finance across the lifespan.

Let’s consider specifics on why housing is the most important element of your personal finance, focusing on various life stages.

We’ll follow with thoughts and ideas on how to deal with what is likely your biggest budget expense as you enter relative old age. We’ll include some pretty pictures from my recent travels to help illustrate these thoughts and ideas.