Eamonn M. McCormack \/ Getty Images: Tom Brenner \/ Getty Images <\/p>\n
Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below.<\/p>\n
With housing affordability becoming an increasingly pressing issue in America, the Trump administration is planning to allow homebuyers to tap their retirement savings to fund a down payment, according to Kevin Hassett, director of the National Economic Council.<\/p>\n
\u201cWe’re going to allow people to take money out of their 401(k)s and use that for down payment,” Hassett told Fox Business (1).<\/p>\n
While the move could unlock new funds for struggling buyers, economist Peter Schiff argues it would do more harm than good.<\/p>\n
\u201cIn his latest attempt to keep overpriced home prices from falling so that more people could afford them, Trump will soon unveil a plan to allow homebuyers to use their 401(k)s to fund down payments. That way Americans can deplete their retirement savings to overpay for houses.\u201d Schiff wrote in a recent post on X (2).<\/p>\n
A 401(k) is a tax-advantaged retirement savings account designed to help workers build long-term financial security after they stop working. Employees typically contribute a portion of each paycheck \u2014 often with matching contributions from their employer \u2014 and invest those funds to grow over time.<\/p>\n
The proposal comes as many Americans are struggling to save enough for a home purchase. Hassett highlighted that today\u2019s homebuyers are facing a much heavier burden than in the past.<\/p>\n
\u201cThe typical monthly payment about doubled for an ordinary family buying an ordinary home and the down payment they needed to buy a home went from about $15,000 to about $32,000,\u201d Hassett said. \u201cAnd so there\u2019s a lot of room to make up.\u201d<\/p>\n
A recent Realtor.com report found that it takes the typical U.S. household seven years to save for the down payment on a median-priced home, noting that it\u2019s a reflection of \u201celevated home values, typical down payments near historical highs and a savings rate still well below long-term norms (3).\u201d<\/p>\n
Still, Schiff\u2019s concern isn\u2019t unfounded. Fox Business anchor Maria Bartiromo pressed Hassett on the issue, asking, \u201cDo you worry that taking money out of the 401(k) is going to hurt people on the other side \u2014 for retirement?\u201d<\/p>\n
Hassett said the administration is still \u201ctalking about the mechanics,\u201d but suggested one possible approach: treating home equity as part of a broader retirement strategy.<\/p>\n
\u201cSuppose that you put 10% down on a home and then you take 10% of the equity of the home and put it as an asset in your 401(k). Then, your 401(k) will grow over time as the value of your house grows,\u201d he said.<\/p>\n
Hassett added that Trump is expected to expand on the proposal in Davos. But you don\u2019t have to wait for Washington to act. These days, there are ways to tap into the U.S. housing market without buying a home outright.<\/p>\n
Crowdfunding platforms like Arrived<\/a> have made it easier than ever for everyday investors to gain exposure to America\u2019s real estate market.<\/p>\n Backed by world class investors like Jeff Bezos, Arrived allows you to invest in shares of rental homes with as little as $100<\/a>, all without the hassle of mowing lawns, fixing leaky faucets or handling difficult tenants.<\/p>\n The process is simple: Browse a curated selection of homes that have been vetted for their appreciation and income potential. Once you find a property you like, select the number of shares you\u2019d like to purchase and then sit back as you start receiving any positive rental income distributions<\/a> from your investment.<\/p>\n Read More: Approaching retirement with no savings? Don\u2019t panic, you’re not alone. Here are 6 easy ways you can catch up (and fast)<\/a><\/p>\n Owning a rental property sounds great \u2014 until something goes wrong. One bounced check and your rental income disappears.<\/p>\n But institutional investors don\u2019t face that problem. Their portfolios are diversified across hundreds \u2014 sometimes thousands \u2014 of units.<\/p>\n Now, accredited investors can tap into that same approach through platforms such as Lightstone DIRECT<\/a>, giving you access to institutional-quality multifamily and industrial real estate \u2014 with a minimum investment of $100,000.<\/p>\n Founded in 1986 by David Lichtenstein, Lightstone Group is one of the largest privately held real estate investment firms in the U.S., with more than $12 billion in assets under management.<\/p>\n Over nearly-four decades, their team has delivered strong, risk-adjusted performance across multiple market cycles \u2014 including a 27.6% historical net IRR and a 2.54x historical net equity multiple on realized investments since 2004.<\/p>\n With Lightstone DIRECT, you gain access to that proprietary deal flow<\/a>.<\/p>\n Here\u2019s the kicker: Lightstone invests at least 20% of its own capital in every deal<\/a> \u2014 roughly four times the industry average. With skin in the game, the firm ensures its interests are directly aligned with those of its investors.<\/p>\n One reason homeownership has long been a wealth-building tool is its role as a time-tested hedge against inflation. But it isn\u2019t the only asset investors turn to when prices rise.<\/p>\n Another popular option \u2014 one Schiff has long emphasized \u2014 is gold.<\/p>\n Gold\u2019s role as an inflation hedge is straightforward: Unlike fiat currencies, it can\u2019t be created at will by central banks. Its value isn\u2019t tied to any single economy or currency, which is why it has often functioned as a \u201csafe haven\u201d during periods of economic stress or geopolitical uncertainty.<\/p>\n When gold was trading around $2,600 an ounce in 2024, Schiff said<\/a>: \u201cIf gold can go from $20 an ounce to $2,600 an ounce, it can go from $2,600 to $26,000, or even to $100,000. There\u2019s no limit because, again, gold isn\u2019t changing \u2014 it\u2019s the value of the dollar that\u2019s decreasing.\u201d<\/p>\n Since then, gold has continued to climb, surpassing $4,700 an ounce in mid-January.<\/p>\n Schiff isn\u2019t alone in highlighting the trend. JPMorgan CEO Jamie Dimon has also leaned into the theme, saying<\/a> that in this environment, gold could \u201ceasily\u201d rise to $10,000 an ounce.<\/p>\n One way to invest in gold that also provides significant tax advantages is to open a gold IRA with the help of Priority Gold<\/a>.<\/p>\n Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, thereby combining the tax advantages of an IRA with the protective benefits of investing in gold<\/a>, making it an option for those looking to help shield their retirement funds against economic uncertainties.<\/p>\n When you make a qualifying purchase with Priority Gold, you can receive up to $10,000 in precious metals<\/a> for free.<\/p>\n At the end of the day, everyone\u2019s financial situation is different \u2014 from income levels and investment goals to debt obligations and risk tolerance \u2014 which means the best move for someone else might not be the best move for you.<\/p>\n If you\u2019re unsure where to start, it might be the right time to get in touch with a financial advisor<\/a> through Advisor.com.<\/p>\n Advisor.com<\/a> is an online platform that matches you with vetted financial advisors suited to your unique needs. They can help tailor a strategy to your particular financial situation, whether you\u2019re looking to grow wealth, save for a home or plan for long-term financial security.<\/p>\n Once you\u2019re matched with an advisor, you can book a free consultation<\/a> with no obligation to hire.<\/p>\n We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines<\/a>.<\/p>\n @FoxBusiness (1<\/a>); @PeterSchiff (2<\/a>); Realtor.com (3<\/a>)<\/p>\n This article provides information only and should not be construed as advice. It is provided without warranty of any kind.<\/p>\n","protected":false},"excerpt":{"rendered":"Eamonn M. McCormack \/ Getty Images: Tom Brenner \/ Getty Images Moneywise and Yahoo Finance LLC may earn…\n","protected":false},"author":2,"featured_media":250948,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[114,1125,268,18033,52755,85,46,3890,4273,27432,266,267,37316,688,6300],"class_list":{"0":"post-250947","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-dave-ramsey","10":"tag-finance","11":"tag-fox-business","12":"tag-housing-affordability","13":"tag-il","14":"tag-israel","15":"tag-jeff-bezos","16":"tag-kevin-hassett","17":"tag-national-economic-council","18":"tag-personal-finance","19":"tag-personalfinance","20":"tag-peter-schiff","21":"tag-retirement","22":"tag-retirement-savings"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/250947","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=250947"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/250947\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/250948"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=250947"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=250947"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=250947"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}