A move can generate at least $ 100,000 for retirement | New

Of all the moves you can make before retirement to strengthen your finances, the move could be the biggest win. An analysis of housing costs and property taxes in the 20 largest metropolitan areas estimates the average savings resulting from downsizing to be nearly $ 200,000 over 10 years.

If kids finally come into adulthood, parents looking to consolidate their finances should seriously think about what they could accomplish by moving to a smaller home.

StorageCafe analyzed the price difference between two and four bedroom homes, factored in the costs of buying and selling (commissions, moving, etc.) expensive home.

In the 20 largest metropolitan areas, the average saving was $ 194,000.

Where downsizing is greatest

No surprise, the biggest net savings are in the more expensive markets. San Franciscans wanting to go a little smaller could save about $ 407,000 over 10 years. Most of it comes from the price difference between a larger house and a smaller house – almost $ 1.6 million on average for a four-bedroom house and around $ 1 million for a two-bedroom house. The tax savings would be an additional $ 28,500. After closing costs of nearly $ 157,000, this represents an estimated workforce reduction gain of $ 407,000.

In the San Diego metro area, the net savings amount to nearly $ 265,000. In metro LA areas, the 10-year savings are $ 240.00.

Seattle is the fourth biggest win, with a savings of nearly $ 235,000. Miami and Boston arrive with savings of over $ 230,000.

The New York metropolitan area, Detroit, and the Washington DC metropolitan area could all generate net downsizing gains estimated at over $ 200,000.

The only large metropolitan area with a workforce reduction gain of less than $ 100,000

The most modest gain from the downsizing is in the Phoenix metro area. The estimated average savings over 10 years is approximately $ 93,000.

The remaining 10 largest metropolitan areas (Philadelphia; St. Louis; Dallas; Riverside-San Bernardino, Calif .; Chicago; Denver; Tampa-St. Petersburg, Fla .; Houston; Minneapolis and Atlanta) estimated the downsizing gains between 107,000 and 194,000 $.

The analysis is probably conservative, as it did not take into account the potential savings resulting from lower utility bills. It also does not take into account the potential gains resulting from the realization of the savings of the actual move and its investment. Or allocate savings to help you make another valuable retirement move: having the highest income in a household delay the start of social security until he reached the age of 70.

This guarantees the greatest possible benefit. If you retire in your sixties, you can still delay enrollment in Social Security, knowing that you have that amount of money to tap into if you decide you don’t want to continue working part-time until retirement. sixty.

Aging in place in a place of the right size

This analysis seems to offer a fairly obvious financial incentive to consider reduce the size of your house better late than never.

Of course, there is the obstacle of leaving the house in which you raised the children. And accumulated so many memories. And then there’s the internal conversation you’re having with yourself right now: being)?

Deep breath. Your family will always meet in your little house. They could just stay in a nearby hotel or Airbnb.

Before you think it will be so disappointing for them, ask them. But ask them the right question. Not what they think of you move to a smaller house. But what do they think of you to strengthen your retirement security. Because that’s what this movement gives you all. (If you think your adult kids aren’t worried about logistics, safety, and the cost of helping a much older person, you’re selling them way too short.)

Plus, this move into your 50s and 60s gives you a perfect time to prepare for a successful retirement. You can think of all the elements of a house that will be kind to you, 85 or 90 years old. No stairs (or less). Less maintenance. Maybe closer to town, so getting out and socializing is easier and not up to you, or your friends, needing to drive on the freeway.

Downsizing before retirement has huge benefits.

( Rate.com/research/news covers the worlds of personal finance and residential real estate.)

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