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Originally Posted by alnorth
Why does it have to be either-or? People dont save enough even counting the mortgage, and putting all your money into a home, spending the rest is not very well diversified and could leave you short in retirement. The capital gains exemption is awesome when you sell for a gain, but what happens if your now living in the next Florida when you need to get money out of the house and your value is stagnating or decreasing? It would be nice to have a huge IRA to supplement your income.
Given that most 401k's have options with microscopic fees, the market has historically returned as well or better than real estate. *Recently* that has not been the case obviously, but the real estate market is cooling down now and will likely enter a period of slow appreciation.
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Very good post. Also, the portion of your 401k that has company matching has definitely done better than the real estate market even in these times. It is hard to put up $1 and have it immediatly matched so you now have $2 anywhere else.