How to balance Retirement Investing vs Saving for Real Estate

Question

Hey everyone!

I'm 22 (just getting started with my investing journey) and I'm trying to figure out the most optimized way to allocate my funds, but I'm having a hard time balancing retirement investing with saving for real estate. I'd love to get your 2 cents.

for context:

income: $130k gross annually

capital: $30k+ saved

current plan:

1. HYS

a. Set aside 10k for EF

b Another 10k earmarked specifically for REI capital

2. Contribute 5% to my TSP

3. max out roth ira in VTSAX

4. Circle back and increased contributions to TSP toward maxing out

Based on that and where I am in my investing journey, should I prioritize building retirement accounts early or focus more aggressively on saving cash to get into real estate within the next 3-4 months?

I'm specifically looking at San Antonio, and wondering if having around 20K set aside is realistic to get started in today's market. I know it ultimatlely depends on the deals I find, but I want to get a sense from others if that number is realistic and workable. I'm particularly interested in starting with a house hack as my first deal.

Any guidance from people who ran into a similar situation at the same time (especially in their early 20s) would be super helpful.

Thanks BP community!

Ricardo R. · Answer

Hey, congrats on getting after it at 22—that’s a huge head start most people wish they had!

I’ve been in a similar spot (juggling retirement vs. real estate savings) and here’s a simple framework that helped me and others in your shoes:

1. Cover the basics first.

• The $10K emergency fund in a High-Yield Savings account? 100% smart. Life happens, and this keeps you from tapping into credit cards or selling assets.

The $10K emergency fund in a High-Yield Savings account? 100% smart. Life happens, and this keeps you from tapping into credit cards or selling assets.

2. Take the free money from your job.

• If your TSP match is 5%, keep doing that. A dollar-for-dollar match is a guaranteed 100% return you can’t get anywhere else.

If your TSP match is 5%, keep doing that. A dollar-for-dollar match is a guaranteed 100% return you can’t get anywhere else.

3. Roth IRA is solid—but optional if real estate is your main goal.

• Maxing out a Roth IRA in VTSAX is great long-term, but if real estate in the next 3–4 months is your priority, you could do the minimum this year and go heavier later. Roth contributions can be pulled back out (not gains), so it’s flexible if needed—but I wouldn’t recommend relying on that unless it’s a backup plan.

Maxing out a Roth IRA in VTSAX is great long-term, but if real estate in the next 3–4 months is your priority, you could do the minimum this year and go heavier later. Roth contributions can be pulled back out (not gains), so it’s flexible if needed—but I wouldn’t recommend relying on that unless it’s a backup plan.

4. Run the real estate math early.

• In San Antonio, $20K down could get you in the game—if you house hack. With FHA (3.5% down) or even 5% conventional, you might buy in the $200–250K range. Factor in closing costs, inspection fees, reserves, and small repairs—you want at least a few thousand left over after closing so you’re not stretched too thin.

In San Antonio, $20K down could get you in the game—if you house hack. With FHA (3.5% down) or even 5% conventional, you might buy in the $200–250K range. Factor in closing costs, inspection fees, reserves, and small repairs—you want at least a few thousand left over after closing so you’re not stretched too thin.

5. Timeline tip:

• If you want real estate in 3–4 months, start talking to a lender now. They’ll help you figure out exactly what you need to close so you know if $20K is realistic.

If you want real estate in 3–4 months, start talking to a lender now. They’ll help you figure out exactly what you need to close so you know if $20K is realistic.

Bottom line:

• Keep the emergency fund intact.
• Get the free match from TSP.
• Decide if the Roth IRA fits or if you want to pause it this year.
• Talk to a lender so you can move fast when the right house hack deal pops up.

Keep the emergency fund intact.

Get the free match from TSP.

Decide if the Roth IRA fits or if you want to pause it this year.

Talk to a lender so you can move fast when the right house hack deal pops up.

That way, you’re investing in both your future and your first property without feeling like you’re missing out on either one. I'll send you a DM

Aaron Zimmerman · Answer

@Ricardo R. I agree with this approach completely. I think Roth IRA would be after real estate assuming the opportunities are there to invest.

I'd encourage any investor to have some reserves for their property (5-15k per property for 2-4 units)