My trigger for this is a recent article I read . It explained that in the USA you can tap into your pension pot to buy an investment property without any penalties (called the 401k in the US).
This is not something that can be done across most countries within Europe. But you can make a decision not to put money into a pension and instead buy an investment property.
This effectively means the decision needs to be made much earlier (i.e. before you start putting money into a pension), intentionally not put money into a pension and instead build up a pile of cash that you will use for a property purchase.
The first thing to note is that you may lose the tax savings associated with regular pension payments.
Most countries in the world incentivize people to contribute to pensions by allowing the payments to be deducted from their tax liability.
Another factor to consider is something I will call the ‘burning a hole in my pocket factor’! You would have to be a very disciplined person (way more disciplined than me) to be able to put money aside each week for several years without touching it for ‘other reasons’.
Whereas when it is taken out of your pay packet each week and put somewhere that you cannot touch it…. well…. discipline is not needed so much.
From an investment point of view pensions have not been doing so well in recent years.
Like every other investment in the world the worldwide recession had quite the impact. It caused many to lose pension money (in the riskier type pension types). Property has also lost value of course in many countries throughout the recession.
The final thing to mention is that your pension will likely be managed by a fund. Whereas an investment property will require management. If you are at the peak of your employed life it might not be a good idea to worry about managing an investment property.
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