The baby boom retirement crunch is upon us. The following is only highlighting the blurbs
of the article.
Anne Tergesen, Wall Street Journal, 10 December 2012
With Nest eggs in
fragile shape…
·
Only 43% of 401(k) participants have
account balances greater than $100,000
·
54% if families ages 55 to 64 are
carrying mortgage debt, up from 37% in 1989
·
$97,000 is the median mortgage debt
among families ages 55 to 64, up from just $34,000 in 1989
And concerns mounting
about later life…
·
47% say they aren’t confident about
having enough money to live comfortably in retirement
Downsizing has its
appeal…
·
43% of American ages 50 to 64 plan to
move within six years, and 50% of those say they plan to move to a smaller
house.
Moving to a smaller home doesn’t always work well. A study of people who moved in the 1990s and
2000s showed that even when people chose to downsize, moving costs and fees at
up a lot of money: on average only $26,000 additional moneys were freed up: and
that was before the housing bust.
2 comments:
You know you're pretty much in trouble when you start with "Everyone says...." This goes back to supply and demand. If an unusually large number of baby boomers are retiring and looking to downsize, that is going to drive up the price of smaller homes.
That said, there are plenty of other reasons to downsize, especially when retiring. Less house means less upkeep. Going to a ranch style means fewer stairs to walk up and down. If you had a large family, having a lot of empty rooms might feel lonely. And if you no longer need to live close to work and want to be closer to kids and grandkids, then the costs of moving are pretty equal, so downsizing might make more sense.
This is definitely a case where you need reputable person who knows your neighborhood to help you figure out whether it makes economic sense.
John: Another factor is how high the property taxes are. All states gather up monies in some fashion, but a lot of the high home price states are also weighted to relatively high property taxes.
The assisted living apartments, which are very nice in some ways, are an extreme form of reducing down you personal space, sharing overhead expenses. Of course you have a rather extreme "corporate" risk that the business model will work for the decades that you are going to stay in one.
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