There are a lot of different decisions that young people have to make especially during their twenties. Many are new to the workforce and are spreading their wings. They no longer live at home and some are already in a relationship. Now is the time they have to start thinking not only about their current situation but way down the road for their retirement.
There is no such thing as leaving thoughts about retirement until a person reaches their fifties. Many of the young one’s today have plans to retire early and what they do now in their twenties can dictate how successful they will be at achieving this.
Living Accommodations
Once the young population leaves the comfort of their family home they are presented with the decision as to whether they should rent or buy a house. This decision can have an effect on their retirement plans.
In the past young people have always been encouraged to buy rather than rent because it was a better investment. The trend is now changing where they are being encouraged to rent while in their twenties rather than buy.
The Advantages
The process of working for a living has changed over the last few decades. At one time the big focus was to find a place of employment then spend the entirety of your working years at that job. It was all about seniority and security. This has changed. Now those entering the job market will often change jobs many times over. They do this for multiple reasons all of which make sense for this generation.
What this means is if they are renting their accommodation they have far more opportunities to move where the job market best suits them. If they own home then they are far more restricted in being able to do this. Yes, they could sell their home but there are a lot of legalities and repercussions that can come with this. It is much easier to move when renting.
Investment Purposes
Another thing of the past at least for some people’s way of thinking is that property investment is not the cream of the crop anymore. It used to be that buying a house aside for living purposes was also a sound form of investment. Many investors still believe this. However, there are many that are now advocating giving more thought to stock investment. It means weighing out the pros and cons of large mortgage payments or using the residue left over after paying the rent to invest in the stock market.
The Housing Costs
The general cliché is that if you are renting then you are just throwing money away. What gets lost in this perception is the housing costs that come with home ownership. Many of which are not present with renting.
These new ways of thinking in regards to renting vs home buying is presenting new challenges for the younger generation. However, most will figure it out for themselves and make a decision that is best for them.
Other decisions that they are faced with may be in regard to their taxes. As a professional and certified accountant, I can help with this. Just give me a call at 416-398-1700
