Housing

Does buying a home make sense for you financially? It may or may not, depending on some financial, career, and lifestyle factors. Your savings, your credit, your salary, your level of disposable income, and your housing preferences all count.

If you are serious about becoming a homeowner, you should have three priorities: keeping your credit score above 700, saving up the down payment, and getting pre-approved for a mortgage.

A big payout leads to a big question. If you are taking a lump sum pension payout from your former employer, what is the next step for that money? It will be integral to your retirement; how can you make it work harder for you?

Rolling it over might be the right thing to do. If you do not have substantial retirement savings, that lump sum may be just what you need. The key is to plan to keep it growing. That money shouldn’t just sit there.

Even tame inflation whittles away at the value of money over time. Most corporate pension payments are not inflation-indexed, so those monthly payments eventually purchase less and less. Lump sums are just as susceptible: if you receive $100,000 today, that $100,000 will buy 33% less in 20 years even with only 2% inflation.1,2