How can renters save for retirement?
If you rent, here are three methods to save for your retirement:
1. Rent only as much as you need, not as much as you can afford.
That means if you only need two bedrooms, don’t rent a place with three. If you can get to work easily enough from midtown or the suburbs, don’t rent downtown. Do you absolutely have to live in the hippest, most fashionable part of town? If not, rent somewhere less trendy and less expensive.
The result? You can save the difference between the most you could pay and what you do pay.
2. Pay yourself first.
This ancient wisdom is particularly helpful for renters. If you’re not being forced to invest by paying down your mortgage, it’s tempting to spend on other things. Instead, arrange for an automatic transfer to your retirement savings account on payday.
The result? You don’t have to choose between saving and spending every month.
3. Think long term.
Do you love where you’re renting now? Do you have a good relationship with your landlord? If so, try negotiating a longer lease. Some landlords are willing to lower your rent to avoid finding a new tenant every year.
The result? You can put the monthly difference between the longer- and shorter-term leases straight into your savings.