There has always been a concern with all the baby boomers selling of their assets (homes, stocks, bonds....) and cratering the market. But added to this problem is the dreadful state of the finances of the young folks coming into the job market. A trillion dollars in student loan debt doesn't leave a lot left over for people trying to sell their homes.
Friday, December 14, 2012
The downsizing crunch
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.