When saving for retirement, downsizing may help - AmericaNowNews.com

Downsizing for retirement

Deciding to downsize can be a very tough thing for aging baby boomers. They have probably paid off the house, they're still working, and they're trying to put off retirement for as long as possible so they can take that extra money and build up their retirement savings.

Sounds like a good strategy, if it weren't for the real world! Any number of things could derail that. You could become ill, or your spouse could, or you could lose your job.

Unfortunately, a recent TransAmerica study found fewer than one in five workers had any backup plan to postponing retirement.

Now one alternative is downsizing. Even if your mortgage is paid off, you need to think about all of the costs that come with a larger house. They're called the "carrying costs" and include things like property taxes and maintenance.

According to Freddie Mac, those maintenance bills average from 1 to 3% of the home's value. So on a $500,000 house, you're looking at $15,000 a year just for upkeep.  Downsize to a $300,000 home and that drops to $9,000 - a savings of $6,000.

And if your new, smaller place is within walking distance of what you need, you're going to save on transportation, as well.

Many seniors are reluctant to sell their homes because they've lost value over the past few years and they want to wait in order to re-coup some of that loss. The problem, of course, is that it could take years.

And remember - the house that you buy is also going to cost less than it would have three years ago, and you should see some immediate savings in the areas of insurance, maintenance and taxes.

Copyright 2012 America Now. All rights reserved.

  • Most Popular StoriesMost Popular StoriesMore>>

  • Physicians warn against giving melatonin to children

    Physicians warn against giving melatonin to children

    Parents desperate to get their troubled sleepers to bed are turning to synthetic melatonin, which is a supplement sold over the counter. But expert warn it could have adverse effects on child development.
    Many adults turn to sleep aids like melatonin, but now more parents are giving them to their kids, too. We talked to physicians to see what they had to say about how it could affect your child's development.
  • Six deadly foods for dogs

    Six deadly foods for dogs

    Every pet owner knows a dog can get into just about anything around the house. One woman found that out the hard way when her dog ate a bunch of grapes! Turns out, that's one of the most dangerous foods
    Every pet owner knows a dog can get into just about anything around the house. But these common snacks could be fatal for Fido.
  • Mouse droppings cause disease

    Mouse droppings cause respiratory disease

    Mice are one of the most resilient mammals living on the planet. Some people have them as pets, and they're also used in laboratory experiments. If wild mice get inside your house, they can potentially
    If wild mice find a way inside your home, they can potentially cause thousands of dollars worth of damage to your drywall and insulation. They can also transmit a harmful disease which can cause death in humans. 
Powered by WorldNow