Quote Originally Posted by LostSoul View Post
Hello,

I'm 26 years old and trying to determine whether I should max out my TSP and a Roth IRA for 2007, or save for a down payment on a house. I understand the priniciples of starting early for retirement and don't necessarily want to be renting a place for the next couple of years. Live in DC where real estate prices are declining, but still outrageous....

Any thoughts?

Thanks in advance,
Brian
If you really want it, I'd go for the house. Over the next 18 months we may see low interest rates and declining prices. Since you don't need to sell a house, you'll be able to move quickly.

However, make sure you understand how much more a house will cost than renting, e.g. maintenance, repairs, condo/association fees, furniture, increased utilities, taxes, and increased commuting costs. In addition, if you think that you or your wife 'll be moving in the near future or either of your jobs is in jeopardy, you might want to hold off.

It nice to have a house. However, you want to try to avoid being house poor. In addition, if you're thinking Warrenton, Fredericksburg, or West Virginia, check out the commute first.

If you can, try and get the 5% TSP match. It's free money. Finally, don't put your down payment in any risky investments, e.g. stock or bond funds. Stick to money market accounts or CDs.

Good luck.