MOST FOLKS SHOULD, at some point, go from renting to owning. But you need to do so with your eyes wide open. Housing is a source of endless confusion—which isn’t surprising given that there are so many moving parts, including attractive tax breaks, fluctuating property prices, leverage from any mortgage debt, and the monthly mortgage payment’s shifting mix of principal and interest. Here are five common myths:
“You can’t go wrong with real estate.” You heard this often before and during the early 2000s real estate bubble,

HOMEOWNERSHIP OFFERS many advantages, as we detailed in the previous section. But there’s no guarantee you’ll make money, especially if you own a house for just a few years. Thinking of purchasing a home? Here are five caveats—which may prompt you to continue renting.
First, given the risk of declining property prices, you shouldn’t buy unless you can see staying put for at least five years and preferably seven years or longer.
Second, homes are horribly expensive to buy and especially sell,

DESPITE THE PROPERTY market’s 2006–12 downturn, many Americans remain firmly convinced of the virtues of homeownership. What underpins that faith? Here are five reasons most folks should aim to own a home.
First, with a fixed-rate mortgage, you lock in your housing costs and thereby protect yourself against a booming real estate market that drives up rents and property prices. An adjustable-rate mortgage doesn’t offer the same degree of certainty, though typically there are caps on how much your monthly payment can increase.

WHAT’S THE STATE of the property market? Here are the latest statistics:

Home prices rose 3.6% in the 12 months through October 2024, as measured by S&P CoreLogic Case-Shiller U.S. National Home Price Index. Home prices are up 142% since the early 2012 market low, but are just 75.6% above the mid-2006 peak.
Existing single-family homes sold for a median $410,900 in November 2024, up 4.8% from a year earlier, according to the National Association of Realtors.

I CONSIDER MYSELF semi-retired. I no longer have a full-time job, though as of mid-2024 I’m working harder than ever, thanks largely to this website. My goal is to ease up through late 2024 and into 2025, as I deal with cancer. Still, I’d like to remain part of the ongoing financial conversation. Partly, that’s to give a sense of purpose to my days. But partly, it keeps a little cash coming in, which I find comforting.

A REVERSE MORTGAGE lets you borrow against the value of your home without paying back any of the loan during your lifetime. Instead, the loan is repaid when you move permanently or, more likely, after your death. At that juncture, the total amount owed, including all accrued interest, can’t exceed your home’s value. You can typically borrow more if you’re older, interest rates are low or your house is appraised at a high value.

IF YOUR RETIREMENT savings are on the skimpy side, you might tap into the value of your home. Consider three strategies.
The safest strategy is to trade down to a less expensive home. Selling one home and buying another can be both costly and a hassle. Still, this has the potential not only to free up home equity that you can then spend, but also it may lower your living costs, including property taxes,

AS AN ALTERNATIVE to income annuities, some mutual fund companies have rolled out managed payout funds. Historically, mutual funds have been geared toward investors who are amassing money for financial goals, notably retirement. Managed payout funds represent an attempt by fund companies to cater to investors who are no longer saving and instead are looking to generate regular income. But the funds have not proven popular. Indeed, in 2023, Vanguard Group merged its payout fund out of existence.

INSTEAD OF ADDING a living benefits rider, you can squeeze income out of a tax-deferred variable annuity by converting it to an immediate variable annuity. But there’s a crucial difference between the two. A variable annuity with living benefits leaves you as owner of the account’s assets and there may be money left over for your heirs. With an immediate variable annuity, you surrender ownership to the insurance company.
Indeed, immediate variable annuities are an odd beast: As with an immediate fixed annuity,

VARIABLE ANNUITIES are tax-deferred savings vehicles, not unlike IRAs but more costly. We talk more about them in the chapter that covers taxes. Variable annuities can be used to generate lifetime income, while still leaving you as owner of the account’s assets, by adding a living benefits rider.
There are two types of rider that can provide lifetime income: a guaranteed lifetime withdrawal benefit (GLWB) and a guaranteed minimum income benefit (GMIB). With a GLWB,

SUPPOSE YOU RETIRED at age 65 and you knew it would all be over at 85. That would make generating retirement income relatively easy: You might spend 1/20th of your savings in year one, 1/19th in year two and so on. Problem is, there’s a decent chance you will live beyond 85. That is where longevity insurance can help.
Longevity insurance, also called a deferred income annuity, is essentially an annuity that pays lifetime income starting at some future date.

WITH AN IMMEDIATE fixed annuity, you hand over a wad of money to an insurance company and, in return, the insurer sends you a check every month for a specified period. You can purchase annuities that will pay income for, say, 10 or 20 years. But if your financial worry is living longer than expected, you’ll want to buy an annuity that pays lifetime income.
To get a sense for how much income an annuity might generate,

RISK POOLING IS a great way to handle life’s financial pitfalls, and we are happy to do it—most of the time. When we buy life insurance or we purchase a homeowner’s policy, we’re contributing to a pool of money that’s overseen by an insurance company and to which many others are contributing. Those who see their homes burn down, and the families of those who die, collect big money from the pool. Those of us who remain standing—and whose homes remain standing—don’t collect on our insurance policies.

SOCIAL SECURITY, WITH its guaranteed stream of inflation-indexed income, is arguably the best income annuity available. This is why you should give serious thought to delaying Social Security, so you get the largest possible check.
Even if you delay benefits, you may want more lifetime income. That’s where income annuities come in. Annuities have a reputation for being costly, complicated products pushed by aggressive salespeople. But not all annuities are a bad investment. There are four types you might consider:
Immediate fixed annuities.

AS COMPANIES LOOK to reduce their pension liabilities, many are making this offer to current and former employees: Instead of paying you a regular pension in retirement, we’ll give you a lump sum now.
The lump sum might seem sizable. But to see whether it’s truly a good deal, find out how much income that lump sum would buy if you purchased a so-called deferred income annuity. These annuities pay regular income starting at some future date.