Though experts say a secure re💫tirement should take precedence over home ownership, it’s possible to save for both at the same time. It just takes careful planning, prioritizing, and budgeting.

“A big mistake I see people make is having an ‘all or nothing’ atti🍃tude with money. Either be completely debt-free or invest. Either save up to buy a home or invest. I say do both,” says , partner and financial advisor at Kristopher Curtis Financial in Nashville, Tennessee.

Saving for a home and your retirement at the same time is a balancing act, even with a budget. If you want to balance both, here’s how to work toward buꦿying a home and saving enough for retirement.

1. Balance Your Budget

When you are trying to meet multiple, large 澳洲幸运5开奖号码历史查询:financial goals, the key is to make a budget that you can stick with. A realistic budget will allow you to track your 澳洲幸运5开奖号码历史查询:cash flow and help you work toward gaining long-term financ♏ial stabilit꧋y.

The 澳洲幸运5开奖号码历史查询:50/30/20 budget rule can helওp you save for retirement while paying off your debts. The method works by dividing your after-tax pay into three buckets: needs (50%), wants (30%), and savings (20%).

• Needs (50%): Housing, transportation, groceries, utilities, minimum debt payments
• Wants (30%): Entertainment, eating out, travel
• Savings (20%): Debt repayments beyond the minimum, retirement funds, emergency fund

If you want to buy a home, reducing your debt is critical to getting a good mortgage rate. Try to keep your 澳洲幸运5开奖号码历史查询:debt-to-income ratio lower than 36% and improve your 澳洲幸运5开奖号码历史查询:credit score as you pay down your credit cards. Having a low debt-to-credit ratio is not only good for loans but also important as yo🐽u head into retirement, because carrying debt into retirement may lower your quality of life.

If you have to use retirement funds and 澳洲幸运5开奖号码历史查询:Social Security benefits to pay down high-interest debts, it means less money for essentials and extras, like travel, that may be important to you. If your debt increases over time, you risk 𓂃running through your retirement savings to keep up with payments.

Taking stock o𒊎f your debts before retirement and planning to pay them down will help protect your financial security.

2. Track Your Cash Flow

Buying a home can have short- and long-term impacts onꦫ cash flow. 

If you use all of your savings for a down payment, you risk becoming 澳洲幸运5开奖号码历史查询:house poor. You may find it difficult to keep up with other expenses. Lawn and yard care can become costly, and the cost of various projects can start to add up. If you need to replace your roof or have an unforeseen emergency, like a burst pipe, you may have to pull from savings to fix it. W🎐hat's more, if you cannot maintain your home, it may lose some of its value over time due to disrepair.

This all changes once you’ve had a chance to build 澳洲幸运5开奖号码历史查询:equity in the property. With equity comes cash: a house becomes more liquid. To apply for a home equity loan or home equi🦂ty line of cre𒉰dit (HELOC), lenders will typically require you to have at least 20% equity in your home.

Owning a home comes with other beneꦏfits, too—and it can translate into retirement savings☂.

“Believe it or not, when buying a primary home, you are actually killing two birds with one stone: homeownership and retirement s𓆉avings,” says , a private real estate investor and founder of Wiseman Advising LLC. “The largest asset and most expensive purchase that most people will ever make in their lifetime will be their primary home. We can use our home as both a place 🍷and a family, but also as a significant driver in saving for retirement.”

And after decades of mortgage payments, you may have enough equity in your home to sell the property and move on. 澳洲幸运5开奖号码历史查询:Downsizing may provide an influx of cash to sustain you during retirement.

Still, it's important not to lose sight of retirement savings, even as a homeowner.

“Inadequate retirement savings can lead to a reduced standard of living and extended working years, while not owning a home means missing potential asset appreciation and tax benefits,” says , a certified༺ financial planner (CFP) and certified trust and fiduciary advisor (CTFA) for Cypress Capital in Franklin, Tennessee.⛎

Between the t🃏wo 🅘goals, “prioritizing retirement savings is usually advisable,” he says.

3. Consider All Your Financial Priorities

When contemplating how to save for a home and retirement, it’s a good idea to evaluate your personal goals and circumstances, like your age, current and potential future income, your partner’s contribution (if applicable), and your✃ timelines for retirement and purchasing your first home.

For example, suppose you are planning to start a family. In that case, you will have to set aside money to 澳洲幸运5开奖号码历史查询:pay for related costs, like anything that's not covered by your insurance for the birth, adoption costs, new baby gear, and🐻 ongoing expenses like child care, if needed.

Families with young children may want to add to a college fund, which will also take dollars out of your budget. If your children are older, you are part of the 澳洲幸运5开奖号码历史查询:sandwich generation, and may also be caring for aging parents.

Whatever your stage in l♛ife, your dollars will always have to stretch further if you are prioritizing a home and retirement simul🍷taneously. And your goalposts for each item will likely be very different at 25 than at 45. Financial security will become more important as you age; any amount you can put toward retirement is crucial.

“A 25-༺year-old can afford a more balanced approach,” Bevins says. “Leveraging the long-term benefits of compounding interest for retirement while also saving for a home down payment is possible, but this age allows for greater flexibility and risk-taking.”

That is less the case if you are 20 years older. “For a 45-year-old, the focus should be on boosting retirement savings due to the limited time remaining until retirement,” Bevins says. “While balancing homeownership goals is possible, retirement savings should take precedence to ensure financial security.”

4. Determine How Much to Save

One of the biggest financial hurdles you may face as a homebuyer is affording a down payment. The average down payment for first-time buyers is 8%, according to data from the National Association of Realtors (NAR).

If saving 8% or more feels too difficult, then government-insured mortgage programs like 澳洲幸运5开奖号码历史查询:Federal Housing Administrati♒on (FHA) loans only call for a 3.5% deposit, making them more accessible than conventional mortgages for first-time buyers. (Keep in mind that these loans—and conventional ones with down payments lower than 20%—require mortgage insurance.)

If you or your spouse is an Armed Services member or veteran, you may qualify for a mortgage loan f🎃rom the U.S. Deparওtment of Veterans Affairs (VA), which calls for zero down.

5. Diversify Your Assets

While home equity is an asset in retirement, it shouldn’t be your only one. Other options beyond Social Security include employer-sponsored retirement plans like 401(k)s and 澳洲幸运5开奖号码历史查询:individual reti⛦rement acco💛unts (IRAs).

Anything you can automate each month toward your retirement can help you stay on track. Maxing out your retirement contributions every year, opening a 澳洲幸运5开奖号码历史查询:spousal IRA (if it applies to you), taking advantage of 澳洲幸运5开奖号码历史查询:employer-matching, and investing in 澳洲幸运5开奖号码历史查询:simplifie🦄d employee pension (SEP) IRAs and Solo 401(k) accounts as an 澳洲幸运5开奖号码历史查询:individual or small business owner ♏are all ways to set money aside for your retirement.

6. Establish Timelines

When you plan for long-term financial stability, it can help to establish a timeline for your goals. Having a sense of when you hope to achieve certain financial priori꧅ties can help you see the big picture, plan your budget, and stay on track with your daily spending and savings.

For exampleꦓ, let’s say that you plan to buy a home. Setting a timeline can help determine how much you need to save each paycheck for your down payment. It will also factor into your choice of savings plan.

“If you plan on purchasing a home within three years, we typically suggest holding your down payment in cash in checking, regular savings, or high-yield savings accounts—or in near-cash accounts and investments like CDs or money market funds,” says , CFP, vice president and financial consultant at Fidelity. “This guarantees you’ll have access to the funds when you need them and protects them from theಞ inevitable ups and downs of the market.”

Similarly, your retirement timeline will depend on how old you are and how long you want to wait to retire. According to the 澳洲幸运5开奖号码历史查询:Social Security Administration, the full retirement age for Gen X and millennials is 67. This is when you're eligible to receive your full Social Security retirement benefits. You can begin collecting benefits as early as age 62, but your benefits will be permanently lowered.

If you are saving for a home, you may need more time to save for retirement. Consider what's affordable now, and then increase your retirement contributions as you age.

7. Simplify Your Savings

Automating your saving🐻s can help you simplify the process of achieving your goals.

If your employer offers a tax-advantaged retirement account like a 401(k) or 403(b), especially one with employer-matching opportunities, you should probably sign up for ꦓit, most experts say.

“Missing out on an employer match to free up additional money for a down payment is generally not advisable, for example, since you’d be leaving 🐠free money on the table,” Viktorin says.

Plu𒈔s, automating those monthly contributions can keep you from being tempt✱ed to skip a month.

8. Consider House Hacking

House hacking is one way t🐷o support retirement savings if you have a disposablౠe income and don’t mind moving from home to home.

“House hacking is a phenomenal way to build real estate assets using lower residential financing for owner-occupied homes,” Wiseman says. “This is a strategy where a buyer purchases a home at an owner-occupied interest rate and down payment percentage, lives in it for 12 months, and then moves out and rents the unit. They continue this practice yearly until they’ve been able to amass a strong 澳洲幸运5开奖号码历史查询:portfolio. This is a great way to add🍨 units to your portfolio if it’s harꦡder to obtain capital.”

Wiseman says this met♛hod is appealing because “owner-occupied residential purchases require 𝓰anywhere from 3% to 10% down payments, while investment property usually requires 15% to 25% down payments, on average.”

However, he says, “This allows for people to take on more leverage and use le𓆏ss cash, which isn’t always a good 𝔍thing.”

More Ways to Boost Savings

There are other ways to supplement savings and build assets for retirement. Consider passive income streams, such as renting a room in your home or your primar🐓y residence over weekends and holiday breaks via a home-sharing platform.

Other ways to supplement savings for a 澳洲幸运5开奖号码历史查询:down payment on a home could include renting a smaller and cheaper apartment for a period while you save, taking on a 澳洲幸运5开奖号码历史查询:side hustle, and/or asking your friends or family for a financial gift. For 2024, the Internal Revenue Service (IRS) allows gifts of up to $18,000 with no extra form needed.

Seeking Professional Advice

A fee-only 澳洲幸运5开奖号码历史查询:financial advisor or planner can help you create a personalized plan designed for your situation. Financial advisors and financial planners can help you create a budget, decide which financial vehicles to use for savings goals like 澳洲幸运5开奖号码历史查询:purchasing a home, and make a timeline for meeting them.

“No matter your life stage or current financial picture, meeting with a financial advisor is a great step to☂wards achieving your money goals and improving your financial wellness,” Viktorin says. 🀅“There are also a lot of digital tools available online to help you understand your expenses and savings goals if you don’t feel quite ready to meet with someone yet.”

Fi﷽nancial apps, like Simplifi by Quickꦇen, or digital tools like AARP’s Money Map and others, can help you budget for your financial goals and may offer some general guidance on saving for priorities like owning a home.

In addition, most large banks, credit unions, and investment firms may offer one-time free consultations, help you create a free plan, or provide digital tools ☂on their websites to help you get starᩚᩚᩚᩚᩚᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ𒀱ᩚᩚᩚted.

The Bottom Line

Most experts agree that retirement savings should take preceden♛ce over other kinds of savings, but that doesn’t need to obstruc🏅t the path to homeownership.

澳洲幸运5开奖号码历史查询:Prioritize your savings goals by creating and adhering to a budget, automating retirement contributions, taking advantage of employer matching, cutting back on nonessentials, and using timelines to help you stay on task. Talk to a financial advisor or use online tools to help you calculate your retirement budget and de🍌cide how much house and mortgage you can afford to take on. A little planning now can help you minimize financial risk later.