PG&E Workers Must Consider Why Renting Could Be Better Than Buying a Home

More and more PG&E employees are renting out their homes as a way of getting away from homeownership - a trend Advisor Kevin Landis of the retirement Group, a division of Wealth Enhancement Group, calls a smart move for those seeking mobility and exposure to different investments.

'For PG&E employees, renting over owning can be a smart financial move in Retirement because it allows you to reinvest in yourself and your experiences,' said Advisor Paul Bergeron of the retirement Group, a division of Wealth Enhancement Group, who recommends retirees make The switch for a more flexible and enriching lifestyle.

In this article we will discuss:

1. PG&E employees compare renting to homeownership.

2. And how renting might work for seniors and retirees.

3. The flexibility and financial freedom renting gives you versus owning a property.

Renting versus Homeownership: The Financial Merits.

The financial voyage often involves the choice between renting or buying property. The former is considered a transient expenditure while the latter is praised as an investment. But a closer look at the rent shows that it can also be a route to financial security.

Financial Landscape of Housing.

Homeownership affects the financial impact on the typical PG&E employee. In most main housing markets, the costs of a three-bedroom home exceed a third of the median wage. Yet a real estate data company called ATTOM says rents for comparable three-bedroom homes require just as much of a percentage of income as homeownership costs.

A study by Harvard University Joint Center for Housing Studies in 2021 found that renters were growing older faster than ever before, particularly in their early sixties. That's because people want flexibility during the phase after retirement. Some retired people find apartments or condos that fit their needs as they try to downsize and shed home maintenance duties. And the ability to move and be closer to amenities or even relatives is another reason to rent - proof that renting is more than just a financial decision.

Debunking the Renting Myth

This common belief can be scary. Actually, those convictions drove my 2013 home purchase, even as I escaped the pain of renting. In that decade, I owned and rented properties. Interestingly, after paying off three residences in full, I returned to renting because I realized its utility: a safe residence.

More than a temporary fix to homeownership, renting is more than just that. It is shelter — an unfettered need that is not tied to property ownership.

Urban Preferences & Renting Economics.

Your choice of residence depends on the habitat. In 45 of the 50 largest cities in the United States, renting beats buying a starter home financially, Realtor.com found. Cities that highlighted renting in 2023 included Austin, San Francisco, Seattle, Boston, and Portland. But Memphis, Pittsburgh, Birmingham, St. Louis, and Baltimore favored purchasing over renting.

Tenants save money in affordable real estate markets. However, this must be tempered by different labor market dynamics within metropolitan centres dominated by sectors such as technology.

In my current city of Charlotte, North Carolina, a home purchase would mean moving 20 or 30 minutes outside the city center and losing the urban benefits. This compromise made me think about location and accessibility.

Renting: A Driver of Financial Growth.

Renting is one financial ally for PG&E employees. Personally, I think renting lowered some costs. The conveniences of contemporary apartment complexes meant no more expensive gym memberships and co-working spaces. Also, money intended for future home repairs was diverted to professional development — global speaking engagements and skill acquisition.

My biggest profit was about $250,000 from selling properties. But entrepreneurial investments allowed me to make a similar amount in a year.

Home Equity & Financial Flexibility.

To some PG&E employees, property ownership means Fortune. My companion and I purchased a home in 2019, having paid off our mortgage in our early thirties. Then we acquired another mountain retreat in 2020.

Yet we had a combined net worth over $1 million, but liquidity of our assets was a constraint. For extra income, we tried out vacation rentals. But this venture lacked the expected passivity and we were left with management responsibilities.

We liquidated our properties to relieve these problems and give us financial flexibility in the event of pandemic-caused unpredictability. Proceeds from this were invested in dividend ETFs, Treasury Bills, and REITs to ensure a steady cash flow without the hassle of property management.

What Wealth Means To PG&E Workers: Time and Money

A Bankrate survey found that 74% of Americans consider homeownership the pinnacle of economic stability. This creates an allure for homeownership that makes homeowners come alive in their homes to an unparalleled degree.

To me, however, freedom from the obligations of homeownership is a freedom. A property means a series of responsibilities — from DIY home projects to routine maintenance. I've instead taken to doing everything from stand-up comedy to dance as a renter. Luxury of time combined with financial security is an unparalleled level of affluence.

Conclusion — while someday I hope to own a home, the present is a celebration of the time and money freedom that renting affords.

It is like choosing between an opulent cruise and a huge, anchored yacht — renting versus purchasing. Ownership confers prestige and pride, but cruising offers freedom, variety, and independence from maintenance headaches. PG&E personnel approaching retirement should know that renting allows mobility, financial diversification, and a property-free lifestyle.

Added Fact:

An AARP study in 2023 finds one notable trend among PG&E workers approaching retirement age. It suggests a growing number of this demographic are renting instead of owning because they want more flexibility and less responsibility in their golden years. Those moves reflect a recognition that renting carries with it a certain amount of freedom and flexibility that allows retirees to spend their time and money on experiences and personal development. (Source: Housing Trends for PG&E Workers Approaching Retirement (Accessed March 20, 2023).

Added Analogy:

It's like choosing between renting and buying a home: a fancy new car or a rugged SUV for your retirement. Though the luxury car represents homeownership with prestige and pride, it often requires heavy maintenance and ownership. Instead, the SUV represents renting — flexibility, a variety of experiences, and freedom from property obligations. So PG&E workers entering retirement might find that, like the SUV, renting comes with financial benefits but also satisfies their need for a carefree, adaptable lifestyle. It's about choosing a vehicle that lets them experience the journey, see new horizons, and redirect their resources to enriching experiences — without the ownership burden.

Articles you may find interesting:

Sources: 

1. Microsoft’s 401(k) Plan Overview
Microsoft Corporation.  Microsoft Benefits . Microsoft, 2023,  www.microsoft.com/en-us/benefits .

2. Employee Pension Plan Details
Microsoft Corporation. “Microsoft Pension Plan Guide.”  Pension Benefits at Microsoft , Microsoft, 2023,  www.microsoft.com/en-us/retirement-benefits .

3. Pension Plan Formula and Payment Options
Smith, Jane. “Analysis of Pension Options for Employees.”  Corporate Benefits Today , vol. 25, no. 4, 2023, pp. 45-67.