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When setting income goals, some people use a six-figure salary as a benchmark, which runs from $100,000 and $999,999 per year. Here, learn more about what this salary means, how to earn that level of income, and more important intel.

How Much Is a Six-Figure Salary?

“Six figures” simply refers to a number with six digits. Typically used with money, the term covers amounts from $100,000 to $999,999. (Once you hit 1 million, you’re in seven-figure territory.) Someone with a six-figure salary makes at least $100K.

How to Make Six Figures

There is no one right way to earn six figures. That said, there are strategies that can better position you for this level of income. Getting a good education, while not absolutely necessary, is a solid foundation for the kinds of jobs that pay in the six-figure range. Another path is to start your own business.

The Bureau of Labor Statistics (BLS) lists 170 occupations with typical annual salaries of at least $100,000. The degrees required for these jobs range from a high school diploma to a doctoral degree.

It’s important to recognize that certain careers just pay more than others. Once you’ve chosen a high paying field, you can determine the type of education and training you’ll need to pursue.

You’ll also want to learn how to manage and grow your money. A good place to start is by tracking your expenses and savings with a free spending app.

Average Age to Make Six Figures in the US

According to the U.S Census Bureau’s most recent data, about 22% of households earn between $100,000 and $149,000. Another 11.5% earn between $150,000 and $199,000. And 13% earn $200,000 or more. Note that this is household income, not individual. Compare those figures to the national average salary of $66,622.

Some workers begin earning six figures in their twenties and thirties. Economists nickname them HENRYs, for “high earners, not rich yet.” But for most people, their “peak earning years” are from age 35 to 64.

Keep in mind that annual income says nothing about someone’s financial health. An individual making $50K who manages their money well can be in a better place financially than someone making six figures.

Recommended: What Is a Good Entry-Level Salary?

Examples of Jobs That Pay Six Figures

A look at the highest paying jobs by state offers insight into these types of careers. All these jobs make at least $200,000, and all but one are in the medical field. Texas is an outlier. There, chief executives, the highest paying job in the Lone Star State, earn $239,060 on average.

Other types of jobs that can pay a six-figure salary include airline pilots ($219,140), IT managers ($169,510), and lawyers ($145,760). It’s probably fair to say that, in any industry, there are successful bosses who make six figures.

What Does a Six-Figure Salary Get You?

What a six-figure salary will get you depends on several other factors. A big one is the cost of living in your area. This is how much you spend on housing, transportation, food, and other necessities. When someone lives in a place with a high cost of living, they will typically have less disposable income and less to put into savings than someone who lives in a low cost-of-living location. This can be true even if both are making competitive salaries.

Another factor is household size. For a single person living in California, a six figure salary might be more than enough. However, a family of four living in the same area could be just scraping by.

Recommended: How to Counter a Salary Offer

Do You Need a Six-Figure Salary to Build Wealth?

While a six-figure salary may be considered good, you don’t necessarily need to earn that much to build wealth.

That said, you need to have a reasonable income to live on. For example, a $20,000 salary typically isn’t enough for a household to meet basic expenses. Consider rent: The 30% rule recommends spending no more than $6,000 on rent per year (that’s 30% of $20K), which works out to $500 a month. The average rent nationwide is now $1,750, more than three times what you could afford on a $20,000 salary.

What about a $40,000 salary? This may be enough for a single person in some areas, but probably not for a family. And while an individual could afford basic necessities, they may not have much left for building wealth — that is, saving and investing.

Another factor is existing debt. If you are paying down high-interest credit card balances, it can be hard to also put money toward savings.

The income needed to build wealth then is an amount that covers the cost of living in your location, allows you to pay off any debt, and provides enough extra to set aside money for an emergency fund, retirement, and investing.

How to Build Wealth Without Earning a Six Figure Salary

As we mentioned above, the steps to building wealth are the same for any salary. First, pay off your debt, especially high-interest credit cards and loans. Money going to interest is money that could be going into your savings or investments.

Second, look for ways to cut back on spending: cooking at home instead of going to costly restaurants, closing fee-based apps that you don’t really need, and so on.

Finally, save and invest the money that isn’t going to credit card debt or other nice-to-have but not necessary expenses.

Recommended: The 52 Week Savings Challenge

The Takeaway

A six-figure salary, meaning one between $100,000 and $999,999, is a benchmark for many people who want to meet financial goals. Having a good education is usually helpful but not always necessary, and certain jobs are more likely to come with six-figure salaries. Having a good salary is helpful when building wealth, but the same strategies can be utilized on a five-figure salary. Tracking your spending and automating your savings are two good first steps.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

See exactly how your money comes and goes at a glance.

FAQ

Is a six-figure salary good?

In most places in the United States, $100,000 is a good salary, covering the needs of an individual or small family, while building savings.

What does a six-figure salary mean?

This is a salary that contains six digits: from $100,000 to $999,999.

What is an-eight figure salary?

This is a salary amount consisting of eight digits: from $10 million annually to $99 million.

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Photo credit: iStock/Renata Angerami

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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

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Assuming a mortgage means that the buyer of a home is able to take over the seller’s existing mortgage. When mortgage assumption is possible, it may help a buyer score a lower interest rate and save money in other ways as well. In times when interest rates are high or headed upward, an assumable mortgage can be quite a windfall.

But, reality-check time: Mortgages are only assumable in certain situations, and there are pros and cons to consider. If you’re home shopping and want to consider this option, read on to learn more, including what is an assumable mortgage, how to know if a mortgage is assumable, the benefits of an assumable home loan, and, of course, the downsides of an assumable mortgage.

What Does Assumable Mortgage Mean?

The meaning of an assumable mortgage is that the buyer, when purchasing a home, takes over the existing mortgage held by the seller. This means the buyer assumes responsibility for the loan’s outstanding balance, its interest rate, and making payments for the remaining loan term.

This can be an appealing option if, say, the seller’s mortgage has a considerably lower interest rate than is currently available. In this scenario, the buyer could stand to save thousands over the life of the mortgage loan.

However, a buyer may also need to finance the amount of equity the seller has in the home.

It’s important to note that not all mortgages are assumable. For those that are, it’s recommended that all parties know in advance what obligations they have when they agree to a mortgage assumption, just as with any other financial agreement.

Note: SoFi does not offer assumable mortgages at this time. However, SoFi does offer fixed-rate and variable-rate mortgages and special opportunities for first-time homebuyers. Learn more from the Home Loan Help Center.

How Do Assumable Mortgages Work?

With an assumable mortgage, the buyer will become the holder of the mortgage originally taken out by the seller. The buyer, as mentioned above, may have to clear certain qualification hurdles to do so.

But there’s more to answering the question, how does assuming a mortgage work: It’s also important to note that, as briefly mentioned above, the homebuyer must make up any difference between the amount owed on the mortgage and the property’s current value. That could mean the buyer pays cash to make up the difference or takes out a second mortgage.

An example: Say a house is valued at $350,000, and the home seller has a $225,000 balance on the home’s original mortgage. Under the terms of most assumable mortgage loans, the homebuyer would need to deliver $125,000 at closing to cover the difference between the original mortgage and the current estimated value of the home, usually determined by an appraisal.

Another important aspect of how assumable mortgage loans work are the two models possible: a simple mortgage assumption or a novation-based mortgage assumption.

Simple Assumption

In a typical simple mortgage assumption, the buyer and seller agree to engage in a private transaction.

•   This means that the mortgage lender is not necessarily aware of the transfer of the mortgage and therefore the new buyer does not go through the mortgage qualification and underwriting process with the lender.

•   The home seller usually just transfers the title of the property to the buyer after the buyer agrees to take over the remaining mortgage payments.

•   If the buyer misses monthly payments or defaults on the original mortgage loan, the lender could hold both parties responsible for the debt, and the credit scores of both buyer and seller could be significantly damaged if the debt isn’t repaid. In this scenario, an assumable mortgage home for sale could wind up being problematic for both parties.

Novation-Based Assumption

Unlike a simple mortgage assumption, where mortgage underwriting usually isn’t directly involved, an assumption with novation means the lender is involved.

•   The lender vets the buyer and agrees to the loan transfer.

•   This means the buyer agrees to assume total responsibility for the existing mortgage debt and remaining payments.

•   Under those terms, the original mortgage lender releases the home seller from liability for the remaining mortgage loan debt. The new documentation, such as a deed of trust (if used), will be in the buyer’s name alone.

What Types of Loans Are Assumable?

There are many different types of mortgage loans but not all are assumable. Typically, home loans that operate outside the federal government’s mortgage loan environment, such as conventional 30-year mortgages issued by private lenders, are not assumable. (How do you know if a conventional mortgage is assumable? It will likely be an adjustable-rate loan, and the seller will have to check with their lender to be sure.)

Certain kinds of mortgages that are insured by the government and issued by private lenders are, however, assumable. A seller usually must obtain lender approval for the assumption, or in the case of U.S. Department of Agriculture (USDA) loans, agency approval. And the buyer must qualify. These loans include:

•   FHA loans: The Federal Housing Administration (FHA) insures these mortgages, which are popular with first-time homebuyers. With a minimum 3.5% down payment for borrowers with a credit score of 580 or higher, FHA mortgages are assumable.

•   VA loans: Home loans guaranteed by the Department of Veterans Affairs (VA) are also assumable, and — perhaps surprisingly — the buyer does not have to be a veteran or in the military. It’s important to understand VA loan assumption clearly before proceeding. Note: The seller of these loans may remain responsible for the mortgage if the buyer defaults.

•   USDA loans: Loans guaranteed by the Department of Agriculture (USDA) are assumable only if the current owner is up to date on payments.

One last note about the options above: While assumable mortgages can be part of a wrap-around mortgage, they are not one and the same.

When a mortgage is assumed, the buyer pays the lender every month. With a wrap-around mortgage, which is a kind of owner-financing, the buyer pays the seller.

Why Do Assumable Mortgages Exist?

Actually landing an assumable debt can be beneficial for both a buyer and seller, but the mortgage lending industry may not make it easy to cut a deal. Why? Because as history attests, mortgage lenders may lose money on assumable mortgages.

In the late 1970s and early 1980s, when interest rates were at the highest levels in modern history, assumable mortgage deals were attractive to buyers who could take over a seller’s mortgage at the original loan interest rate. In many cases, this would yield a bargain vs. the then-current rate for a new mortgage. (How high did rates go? In October 1981, 30-year fixed-rate mortgages hit an eye-watering peak of 18.45%.)

Mortgage companies, however, could see that they would lose money if home buyers chose a lower-rate assumable loan over a higher-rate new mortgage loan. That’s one reason mortgage companies began inserting “due on sale” clauses, which mandated full repayment of the loan for most home transactions.

As the FHA and VA began issuing more mortgage loans to homebuyers, they offered more relaxed rules allowing assumption transactions. Mortgages could transfer to the homebuyer as long as they demonstrated the ability to repay the remaining home loan balance, usually after a thorough credit check.

Pros and Cons of Assumable Mortgages

Assumable mortgage loans have upsides and downsides.

Upsides of an Assumable Mortgage

First, consider these pluses:

•   A lower rate may be possible. The buyer may save significant money on the loan if the original mortgage’s interest rate is lower than current rates.

•   Closing costs are curbed. The buyer might also benefit because closing costs are minimized in private home sale transactions between a buyer and a seller.

•   No appraisal is needed. With no need to get a new mortgage on the property, a home appraisal isn’t required for a mortgage assumption, which can save time and money. The buyer could request an appraisal as part of the general home purchase agreement, however.

Downsides of an Assumable Mortgage

Now, the minuses:

•   Upfront cash may be required. To meet the terms of an assumable mortgage, the buyer may need to have a substantial amount of upfront cash or take out a second mortgage to close the deal. This usually occurs when the property’s value is greater than the mortgage balance. The seller has perhaps built up considerable equity over the years.

•   Second mortgages can be problematic. Second mortgages aren’t always easy to obtain, as mortgage lenders may be reluctant to issue a second home loan when the original mortgage still has a balance due. And a second mortgage probably carries closing costs, meaning the seller needs to shell out more cash.

•   The property may be in distress. In some cases, the home seller may be eager to get out of a home that is proving to be too expensive for their budget. Simply put, they might be behind on payments. In that event, the mortgage lender may require the mortgage to be made current (meaning getting up to date on payments) before it will approve an assumable mortgage.

•   FHA loans may carry an add-on. If the home seller puts down less than 10% of the home’s cost when getting an FHA loan, there will be a mortgage insurance premium for the entire loan term. This would add to the buyer’s monthly costs.

Here’s how this intel stacks up in chart form:

Pros of Assuming a Mortgage	Cons of Assuming a Mortgage
Possibility of a lower interest rate than market rate, saving money over the life of the loan	Buyer must make up difference if home value exceeds mortgage balance
Reduced closing costs	Home may be in distress
Home appraisal not necessary	FHA loans usually carry mortgage insurance premium

Examples of Assumable Mortgages

If you’re hoping to find an assumable mortgage, it will most likely be a government-insured or -issued loan, as mentioned above; perhaps one offered as a first-time homebuyer program. Here’s a bit more about these mortgages and how a loan assumption would work:

•   Federal Housing Authority (FHA) loans: These government loans, which are insured by the FHA, may be assumable. Both parties involved in a mortgage assumption, however, must qualify in certain ways. For instance, the seller must have been living in the home as a primary residence for a period of time, and the buyer needs to be approved via the usual FHA loan application process.

•   Veterans Affairs (VA) loans: If a seller has a loan backed by the VA, it may indeed be assumable. A buyer who wants to take over the loan can apply for a VA loan assumption and doesn’t need to be a current or former member of the military service.

•   U.S. Department of Agriculture (USDA) loans: To assume a USDA loan on a rural property, a buyer will have to show an adequate income and credit to be approved by the USDA.

Recommended: Buying a Home with a Non-Spouse

Who Are Assumable Mortgages For?

Assuming a mortgage can be a good option for those who are property shopping in a time of high or rising interest rates and would like to take over the seller’s lower-rate loan. This can help save money, and it can also spare the buyer some of the time, energy, and money needed to apply for a new loan.

In addition, an assumable mortgage may work best for buyers with access to cash, as they will probably need to cover the difference between the mortgage amount and the value of the home they are buying.

Who Are Assumable Mortgages Not For?

Those purchasing a home that currently has a conventional mortgage will most likely not be able to take over that loan.

Additionally, if a mortgage is assumable, it’s important to recognize this scenario: If there’s a considerable gap between the mortgage amount and the property’s value, the buyer needs to bridge that. That means either ponying up a chunk of cash or finding a second mortgage, which may not be financially feasible for some prospective homebuyers.

How to Get an Assumable Mortgage Loan

Here are some points to consider if you are contemplating assuming a mortgage:

•   First, confirm that the loan is assumable. For most conventional mortgages, assumption is not an option.

•   If assumption is possible, the homebuyer must apply for the assumable mortgage and be vetted for creditworthiness and the ability to meet all the contractual requirements. It’s vital that the buyer show that they have the financial assets needed to qualify for the loan. Even in a simple assumption (more on that below) the buyer may need to reassure the seller that they are creditworthy.

•   Recognize that the buyer will need to make up any difference between the amount owed and the home’s current value. This means that if the seller of a $300,000 home has a $100,000 mortgage that’s assumable, the buyer would need to be able to come up with $200,000 to assume that loan, either by paying cash or by getting a second mortgage. Obviously, this scenario could present a significant financial hurdle for many prospective homebuyers.

•   If the mortgage lender or agency signs off on the deal, the property title goes to the homebuyer, who starts making monthly mortgage payments to the lender or mortgage servicer.

•   If the lender denies the application, the home seller must move on, and the buyer would likely resume shopping elsewhere.

Recommended: How to Buy a Multi-Family Property

The Takeaway

If you can’t find a property with an assumable mortgage or don’t feel this financing option is right for you, rest assured there are other ways to finance your purchase.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

Is it a good idea to assume a mortgage?

Assuming a mortgage can have benefits. If you find an assumable-mortgage home for sale, you might be able to take over the seller’s mortgage at a lower rate than what’s currently offered by lenders, thereby saving you money over the life of the loan. Closing costs and schedules might also be leaner. However, mortgage assumption is not always possible, and if it is, you may have to make up the difference between the mortgage amount and the home’s current value.

What is required to assume a mortgage?

To assume a mortgage, the seller must have a loan that allows for assumption. These are usually government-insured or -issued mortgage loans. In addition, you may have to submit credentials to the lender and be approved. You may also have to pay the difference between the mortgage amount and the property’s market value.

How much does it cost to assume a mortgage?

Typically, when you assume a mortgage, you may pay some closing costs, but these could be lower than on a new loan. In addition, there may be a one-time funding fee; for instance, on a VA loan, this amounts to 0.5% of the existing mortgage balance. Last but not least: The buyer usually has to pay the difference between the remaining balance on the mortgage and the current value of the home.

What mortgages are assumable?

Government loans such as FHA, USDA, and VA loans are often assumable. Conventional loans (those issued by private lenders and not via a federal government mortgage loan program) are usually not assumable. When in doubt, the mortgage holder should inquire with their lender.

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SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

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You can’t be lily-livered to want to build a houseboat, a self-propelled boat with a cabin. It will take a lot of time and more than a few doubloons.

Houseboat kits are a thing, and an alternative to building your own boat is buying a used houseboat and modifying it.

This piece will help you navigate how to build a houseboat and more.

First Off, Can You Build a Houseboat Yourself?

As long as you have the time and money, which can mean securing financing, yes, you can build your own houseboat.

Small houseboats may only have one or two rooms in their cabins, with people using them to fish or enjoy time on a river. Larger ones may be used somewhat like a summer home, with several rooms included. Houseboats of just about any size have a sort of porch on the ends, perhaps covered with awnings.

Although they have this in common with another type of house, the floating home, which is permanently moored, houseboats are designed for quick connection and disconnection with a marina’s electrical, water, and sewer services.

Typical Costs of Building a Houseboat

How much does it cost to build a houseboat? Well, as is the case with the cost to build a house, it depends. Costs will vary based on the size of the boat, the materials used, fixtures included, and so forth.

A small basic houseboat may cost from somewhere around $10,000 to build, while a somewhat larger one can range from $35,000 up to $100,000. (That said, there are luxury houseboats worth millions, so the sky’s the limit if the budget permits!)

How Long Will It Take to Build a Houseboat?

The time investment will depend on the size of the boat, the materials used, your level of building experience, how much help you have — and perhaps even the weather. One estimate suggests that building your own houseboat will take 600 hours.

Pros and Cons of Building a Houseboat from Scratch

How to Build a Houseboat

Steps include the following:

•   Find a spacious location to build

•   Request approval to build

•   Design your own houseboat

•   Build or buy a hull

•   Purchase materials

•   Start building

•   Install plumbing and electrical

Here’s more information about each step.

Find a Spacious Location to Build

Even a small houseboat can take space in which to build, so make sure you have enough room for the boat and for any workers.

Plus, consider how, once the boat is constructed, you’ll get it to the waterfront. Where do you plan to dock the houseboat? Is there sufficient building space near the dock to solve two problems at once?

Request Approval to Build

The U.S. Coast Guard’s Boating Safety Division provides information about relevant federal laws and regulations, Coast Guard directives, state boating laws, and more. Be sure to follow those while also checking in with your city and county government agencies to dot your local I’s and cross your T’s.

Design Your Houseboat

Determine the design. Check local associations, Google “houseboat plans,” and/or ask the owners of a houseboat what they recommend.

Plans are pretty affordable and can save you plenty of hassle, so pick the one that fits your budget and dovetails with your vision.

Recommended: How Do Home Equity Lines of Credit Work?

Build or Buy a Hull

The hull is the heart of the houseboat’s design and engineering ability, and also the part of the houseboat where you can walk around. The quality and appropriateness of the hull determine how well it floats and how stable and durable the boat will be.

As you seek out building plans for the houseboat, examine what’s involved in building the hull and then make your style decision from there. The hull may be a V-bottom, a flat bottom, multihull, or pontoon style, the most popular for a houseboat.

Pontoon boats can be spacious and more likely to provide a smooth, comfortable ride. They can be easy to maintain and may be a good choice for family use.

On the other hand, pontoon boats aren’t built for speed or easy maneuverability. They typically come with an outboard engine, and it can be hard to find another kind.

Purchase Materials

Just as you wouldn’t want to run out of egg whites when preparing a soufflé, you won’t want to run out of important building materials for your houseboat.

A personal loan could come in handy. You might be able to borrow up to $100,000.

Another possibility, for some homeowners, is a home equity line of credit (HELOC) or home equity loan. The interest rate will be lower than that of unsecured loans.

Make a list, check it twice, and then make sure you buy the right quality and quantity. Buying parts bit by bit can be more expensive, create more stress, and delay the project.

Start Building

This is what you’ve been waiting for, right? Now is the time to take the materials you’ve purchased and, by following the plans you’ve chosen, actually build your houseboat. Perhaps you’ll need to reach out for help, or maybe you’ve got this all by yourself. Either can work!

Install Plumbing and Electrical

With a houseboat, you can navigate the waters rather than being moored in place. Electrical wiring and plumbing will allow you to have access to electricity and use toilets. Waste will go into a holding tank that, when you get to a marina, can be removed by attaching your electrically powered pump to the marina’s system.

Are Houseboats Cheaper Than Houses?

Because houseboats range from a few thousand dollars to over $1 million, the answer is that some, but certainly not all of them, are cheaper than a house.

Expenses will continue to flow after the build. Most houseboat owners will pay mooring fees, liveaboard fees, insurance, and pump-out fees. But they may catch a tax break: A boat can be a main or second home, allowing owners the mortgage interest deduction if they itemize.

Recommended: What Is a Home Equity Loan and How Does It Work?

Can You Get a Houseboat Prefab Kit?

You can! It may make sense to explore those options to see if one fits your needs and budget — and compare that to the cost of building your houseboat from scratch.

Other Ways of Getting a Houseboat Other Than Building From Scratch

Here are two methods:

•   Buy an old houseboat and renovate it

•   Buy a new houseboat

Buy an Old Houseboat and Renovate It

You can save money by buying a used houseboat, especially if you have the know-how to make any necessary repairs and modify it. Or, depending on what needs to be done, you might still come out ahead financially if you buy an old houseboat and have an expert renovate the vessel.

Buy a New Houseboat

Just as when you buy a car, truck, or RV, when you buy new, you can benefit from the warranty and enjoy your new houseboat without worrying about what parts have worn down.

The Takeaway

How to build a houseboat? You could try building one from scratch or using a prefab kit, or you could buy a used houseboat and renovate it. What’s most important is choosing what fits your budget and enhances your lifestyle. How to launch your houseboat plans? One way is a HELOC brokered by SoFi that has a lower interest rate than unsecured loans.

SoFi now partners with Spring EQ to offer flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively lower rates. And the application process is quick and convenient.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

Can you live permanently on a houseboat?

Yes. Some marinas allow full-time liveaboards. Otherwise, check with your state’s anchoring regulations to see how long you can remain in a certain spot with the houseboat and what you’d be required to do.

Do houseboats retain their value?

Boats in general decrease in value, especially during the first couple of years and then gradually after that. That said, pontoon houseboats can last for decades. So when looking at what you’d invest and then dividing that cost by 30, 40, or even 50 years of potential use, you may consider this a good investment even without lots of resale value.

How long do houseboats last?

Pontoon boats are known to last so long that people use them their entire lives. The average lifespan is 30 to 40 years, with some lasting 50 years or longer.

Can you get a loan to finance a houseboat?

Although it may be challenging to find a loan program specifically for houseboats, you can contact banks, credit unions, and online lenders to see if their boat financing program includes houseboats. Or, if buying one, check with the dealer.

Other options include a HELOC, home equity loan, or personal loan to pay for your houseboat.

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Photo credit: iStock/Cucurudza

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

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SOHL-Q125-006

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A health savings account, or HSA, not only provides a tax-free way to pay for medical expenses now, those tax savings can extend to retirement as well.

An HSA provides triple tax benefits to the account holder. You set aside money pre-tax (similar to a 401(k) or IRA), it grows tax free, and withdrawals for qualified medical expenses are also tax free.

HSAs can be a boon in retirement because you always have access to the account, even if you change jobs, and you never have to “use it or lose it,” so your savings can grow over time. Thus, you can use HSA funds to pay for qualified medical expenses at any time, tax free, now or when you retire.

The other good news is that after age 65 you can use the funds for non-qualified expenses, too; you just have to pay income tax on the funds you withdraw.

What Is an HSA?

A health savings account is a type of tax-advantaged savings account for individuals with a high-deductible health care plan (HDHP). For 2025, this means it has an annual deductible of at least $1,650 for self-only coverage and $3,300 for family coverage. In addition, its out-of-pocket maximum (including annual deductible) can’t exceed $8,300 for individuals and $16,600 for families.

Anyone who fits the criteria is eligible to open an HSA and save pre-tax dollars: up to $4,300 a year for individuals and up to $8,550 for families for the 2025 tax year. If you’re 55 or older at the end of the tax year, you can contribute an additional $1,000 — similar to the catch-up contributions allowed with an IRA.

An employer can also make a matching contribution into your HSA, though it’s important to note that total employer and employee contributions can’t exceed the annual limits. So if you’re single, and your employer contributes $1,500 to your HSA each year, you can’t contribute more than $2,800 for 2025.

Rules and Restrictions on HSA Contributions

You have until the tax-filing deadline to make your annual HSA contribution.

•   For tax year 2024, you have until April 15, 2025.

•   For tax year 2025, you have until April 15, 2026.

It’s important to know the amount you can contribute to your account, both so you can take advantage of your HSA and to make sure you’re not penalized for excess contributions. If the amount you deposit for the year in your HSA is over the defined limit, including any employer contributions and catch-up contributions, you’ll owe ordinary income tax on that amount, plus a 6% penalty.

Another caveat: Once you enroll in or become eligible for Medicare Part A benefits, you can no longer contribute money to an HSA.

What Are HSA Withdrawals?

You can withdraw funds from your HSA to pay for qualified medical and dental health care expenses, including copays for office visits, diagnostic tests, supplies and equipment, over-the-counter medications, and menstrual care products. Health insurance premiums are not included as qualified expenses, however.

One significant benefit of HSA accounts is that, unlike flexible spending accounts (FSAs), the money in an HSA doesn’t have to be used by the end of the year. Any money in that account remains yours to access, year after year. Even if you change jobs, the account comes with you.

Before age 65, there is a 20% penalty for withdrawing funds from an HSA for non-medical expenses, on top of ordinary income tax. After age 65, HSA holders can also make non-medical withdrawals on their account, though ordinary income tax applies.

How Do Health Savings Accounts Work?

HSAs are designed to help consumers play for medical expenses when they have a high-deductible health plan (HDHP). That’s because typically an HDHP only covers preventive care before the deductible, so most types of medical care would have to be paid out of pocket as they’re applied to the deductible amount.

Having a tax-advantaged plan like an HSA gives people a bit of a break on medical expenses because they can save the money pre-tax (meaning any money you save in an HSA lowers your taxable income), and it grows tax-free, and you withdraw the money tax-free as well, as long as you’re paying for qualified expenses.

As noted above, you can withdraw your HSA funds at any time. But if you’re under age 65 and paying for non-qualified expenses, you’ll owe taxes and a 20% penalty on the amount you withdraw.

After age 65, you simply owe taxes on non-qualified withdrawals, similar to withdrawal rules for a 401(k) or traditional IRA.

💡 Quick Tip: It’s smart to invest in a range of assets so that you’re not overly reliant on any one company or market to do well. For example, by investing in different sectors you can add diversification to your portfolio, which may help mitigate some risk factors over time.

Can an HSA Be Used for Retirement?

HSAs are not specifically designed to be a retirement planning vehicle, but you can use HSA funds in retirement, since the money accumulates in your account until you withdraw it tax-free for qualified medical expenses.

There’s no “use it or lose it” clause with an HSA account, so any unused funds simply roll over to the following year. This offers some potential for growth over time.

That said, the investment options in an HSA account, unlike other designated retirement accounts, tend to be limited. And the contribution caps are lower with an HSA.

You could also use your HSA funds to pay for other retirement expenses after age 65 — you’ll just have to pay income tax on those withdrawals.

Recommended: How to Set Up a Health Savings Account

3 Reasons to Use an HSA for Retirement

Though they aren’t specifically designed to be used in retirement planning, it’s possible to use an HSA for retirement as a supplement to other income or assets. Because you can leave the money you contribute in your account until you need it for qualified medical expenses, the funds could be used for long-term care, for example.

Or, if you remain healthy, you could tap your HSA in retirement to pay for everyday living expenses.

There are several advantages to including an HSA alongside a 401(k), Individual Retirement Account (IRA), and other retirement savings vehicles. An HSA can yield a triple tax benefit since contributions are tax-deductible, they grow tax-deferred, and assuming you withdraw those funds for qualified medical expenses, distributions are tax-free.

If you’re focused on minimizing your tax liability as much as possible prior to and during retirement, an HSA can help with that.

Using an HSA for retirement could make sense if you’ve maxed out contributions to other retirement plans and you’re also investing money in a taxable brokerage account. An HSA can help create a well-rounded, diversified financial plan for building wealth over the long term. Here’s a closer look at the top three reasons to consider using HSA for retirement.

1. It Can Lower Your Taxable Income

You may not be able to make contributions to an HSA in retirement, but you can score a tax break by doing so during your working years. The money an individual contributes to an HSA is deposited pre-tax, thus lowering their taxable income.

Furthermore, any employer contributions to an HSA are also excluded from a person’s gross income. Meaning: You aren’t taxed on your employer’s contributions.

The money you’ve deposited in an HSA earns interest and contributions are withdrawn tax-free, provided the funds are used for qualified medical expenses. In comparison, with a Roth IRA or 401(k), account holders are taxed either when they contribute (to a Roth IRA) or when they take a distribution (from a tax-deferred account like a traditional IRA or 401(k)).

Using HSA for retirement could help you manage your tax liability.

2. You Can Save Extra Money for Health Care in Retirement

Unlike flexible spending accounts that allow individuals to save pre-tax money for health care costs but require them to use it the same calendar year, there is no “use it or lose it” rule with an HSA. If you don’t use the money in your HSA, the funds will be available the following year. There is no time limit on spending the money.

Because the money is allowed to accumulate, using an HSA for retirement can be a good way to stockpile money to pay for health care, nursing care, and long-term care costs (all of which are qualified expenses) if needed.

While Americans can enroll in Medicare starting at age 65, some health care needs and services aren’t covered under Medicare. Having an HSA to tap into during retirement can be a good way to pay for those unexpected out-of-pocket medical expenses.

3. You Can Boost Your Retirement Savings

Beyond paying for medical expenses, HSAs can be used to save for retirement. Unlike a Roth IRA, there are no income limits on saving money in an HSA.

Some plans even allow you to invest your HSA savings, much like you would invest the funds in a 401(k).

The investments available in any given HSA account depend on the HSA provider. And the rate of return you might see from those investments, similar to the return on a 401(k), depends on many factors.

Investing can further augment your retirement savings because any interest, dividends, or capital gains you earn from an HSA are nontaxable. Plus, in retirement, there are no required minimum distributions (RMDs) from an HSA account — you can withdraw money when you want or need to.

Some specialists warn that saving for retirement with an HSA really only works if you’re currently young and healthy, rarely have to pay health care costs, or can easily pay for them out of your own pocket. This would allow the funds to build up over time.

If that’s the case, come retirement (or after age 65) you’ll be able to use HSA savings to pay for both medical and non-medical expenses. While funds withdrawn to cover medical fees won’t be taxed, you can expect to pay ordinary income tax on non-medical withdrawals, as noted earlier.

HSA Contribution Limits

If you are planning to contribute to an HSA — whether for immediate and short-term medical expenses, or to help supplement retirement savings — it’s important to take note of HSA contribution limits. If your employer makes a contribution to your account on your behalf, your total contributions for the year can’t exceed the annual contribution limit.

2024 Tax Year HSA Contribution Limits: Remember that you can contribute to your HSA for tax year 2024 until April 15, 2025.

•   $4,150 for individual coverage

•   $8,300 for family coverage

•   Individuals over age 55 can contribute an additional $1,000 over the annual limit

As with opening an IRA, you have until the tax filing deadline to make a contribution for the current tax year. So if you wanted to contribute money to an HSA for tax year 2024, you’d have until April 15, 2025 to do so.

2025 Tax Year HSA Contribution Limits: Remember that you can contribute to your HSA for tax year 2025 until April 15, 2026.

•   $4,300 for individual coverage

•   $8,550 for family coverage

•   Individuals over age 55 can contribute an additional $1,000 over the annual limit

How to Invest Your HSA for Retirement

An HSA is more than just a savings account. It’s also an opportunity to invest your contributions in the market to grow them over time. Similar to a 401(k) or IRA, it’s important to invest your HSA assets in a way that reflects your goals and risk tolerance.

That said, one of the downsides of investing your HSA funds is that these accounts may not have the wide range of investment options that are typically available in other types of retirement plans. Investment fees are another factor to keep in mind.

It’s also helpful to consider the other ways you’re investing money to make sure you’re keeping your portfolio diversified. Diversification is important for managing risk. From an investment perspective, an HSA is just one part of the puzzle and they all need to fit together so you can make your overall financial plan work.

HSA for Retirement vs Other Retirement Accounts

Although you can use an HSA as part of your retirement plan, it’s not officially a retirement vehicle. Here are some of the differences between HSAs and other common types of retirement accounts. Note: All amounts reflect rules/ limits for the 2024 tax year.

	HSA	Traditional IRA	401(k)
2025 annual contribution limit	$4,300 (individual) $8,550 (family)	$7,000	$23,500
Catch up contribution	+ $1,000 for those 55 and older	+ $1,000 for those 50 and older (total: $8,000)	+ $7,500 for those over 50 (total: $31,000)
Contributions & tax	Pre-tax	Pre-tax	Pre-tax
Withdrawals	Can withdraw funds at any age, tax free, for qualified medical expenses.	After age 59 ½ withdrawals are taxed as income.	After age 59 ½ withdrawals are taxed as income.
Penalties/taxes	Withdrawals before age 65 for non-qualified expenses incur a 20% penalty and taxes. Withdrawals after age 65 for non-qualified expenses are only taxed as income.	Before age 59 ½ withdrawals are taxed, and may incur an additional 10% penalty. Some exceptions apply.	Before age 59 ½ withdrawals are taxed, and may incur an additional 10% penalty. Some exceptions apply.
RMDs	No	Yes	Yes

As you can see, an HSA is fairly similar to other common types of retirement accounts, like traditional IRAs and 401(k)s, with some key differences. For example, you can generally contribute more to an IRA and to a 401(k) than you can to an HSA, as an individual.

While contributions are made pre-tax in all three cases, an HSA offers the benefit of tax-free withdrawals, at any time, for qualified medical expenses.

Note that Roth IRAs also have a tax-free withdrawal structure for contributions, but not earnings, unless the account holder has had the Roth for at least 5 years and is over 59 ½. The rules governing Roth accounts, including Roth IRAs and Roth 401(k)s can be complicated, so be sure you understand the details.

In addition, HSA rules allow the account holder to maintain the account even if they leave their job. There is no need to do a rollover IRA, as there is when you leave a company and have to move your 401(k).

💡 Quick Tip: Before opening an investment account, know your investment objectives, time horizon, and risk tolerance. These fundamentals will help keep your strategy on track and with the aim of meeting your goals.

What Happens to an HSA When You Retire?

An HSA doesn’t go away when you retire; instead, the money remains available to you until you need to use it. As long as withdrawals pay for qualified medical expenses, you’ll pay no taxes or penalties on the withdrawals. And your invested contributions can continue to grow as long as they remain in the account.

One advantage of using an HSA for retirement versus an IRA or 401(k) is that there are no required minimum distributions. In other words, you won’t be penalized for leaving money in your HSA.

How Much Should I Have in an HSA at Retirement?

The answer to this question ultimately depends on how much you expect to spend on health care in retirement, how much you contribute each year, and how many years you have to contribute money to your plan.

Say, for example, that you’re 35 years old and making contributions to an HSA for retirement for the first time. You plan to make the full $4,300 contribution allowed for individual coverage for the next 30 years.

Assuming a 5% rate of return and $50 per month in HSA medical expenses, you’d have just over $242,195 saved in your HSA at age 65. Using an HSA calculator to play around with the numbers can give you a better idea of how much you could have in your HSA for retirement if you’re saving consistently.

When Can I Use My HSA Funds?

Technically your HSA funds are available to you at any time. So if you have to pick up a prescription or make an unscheduled visit to the doctor, you could tap into your HSA to pay for any out-of-pocket costs not covered by insurance.

If you’re interested in using an HSA in retirement, though, it’s better to leave the money alone if you can, so that it has more opportunity to grow over time.

The Takeaway

A health savings account can be a valuable tool to help pay for qualified out-of-pocket medical costs, tax-free right now. But an HSA can also be used to accumulate savings (and interest) tax-free, to be used on medical and non-medical expenses in retirement.

While an HSA can be useful for retirement, especially given the rising cost of long-term care and other medical needs, note that the annual contribution limit for individuals is much lower than other retirement accounts. Also, the investment options in an HSA may be limited compared with other retirement plans.

Ready to invest for your retirement? It’s easy to get started when you open a traditional or Roth IRA with SoFi. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

Easily manage your retirement savings with a SoFi IRA.

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Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

SOIN-Q125-013

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