Given my financial situation, is it better for me to buy a house or continue to rent?

I am 55 years old. I am currently working and I have three young kids. I have close to $180k in cash savings, $167k in a 401(k) and $40k in a 529 plan. I also have an $18k car loan. Would it be better for me to buy a house or stay in the apartment I am currently renting?  

Real Estate
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2 days ago
75% of people found this answer helpful

You don't state your salary or your expected living needs once the kids are grown and gone.  But given what you have told us, it's clear that you are not even close to having enough to retire on.  You need roughly 20 times your annual living needs, after deducting any steady income (such as Social Security or a defined-benefit pension).  So don't start feeling flush and overextend yourself.  You should probably be putting (or trying to put) 20% of your gross salary away into savings every year.  This number inclludes all savings types.  If you put a payment down on a house and take on a big mortgage you will most likely be unable to retire comfortably.  Don't fall into the trap of thinking that your house is a vehicle to build savings.  Too many people find themselves "house-poor" in old age and unlocking your home equity can be expensive or disruptive.

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