For the near 70 million baby-boomers entering the empty-nest or retirement phase of life, home downsizing is a popular trend. Downsizing your home can reduce your mortgage payments and decrease the time you are dedicating to home maintenance tasks. These benefits are attractive no matter what your retirement plans may be. But before you run out and pound that “for sale” sign in the yard, you need to decide what you are looking for in your next home.
Decide how to downsize and make a plan that works best for you
Baby boomers who have decided to include home downsizing in their retirement plan will be likely to stay in their next home for the duration of their lives. For many retirees this can mean choosing a home to sustain them for 30 or more years. There are some critical questions to ask yourself when contemplating how to downsize and remain satisfied with your new home for years to come.
- Where do you want to spend your retirement years? Many people use retirement as a chance to move to a different climate or to relocate near children and grandchildren. Others simply want to downsize to reduce space while remaining in the same location.
- What type of property are you looking for? While reducing square footage by moving into a smaller, single family home is adequate for some, a good number of retirees want to be done with home and yard maintenance as well. This might lead them to purchase a condo or a home in a neighborhood overseen by homeowners association. It is always a good idea to review your different housing options your before making a final decision.
- Will you need to store or sell some of your belongings to downsize? This can be a tough decision, but certainly one that needs to be thought through before reducing square footage. Decide what absolutely needs to come with you, what you are willing to sell and what you might be giving to relatives for safe keeping.
Reduce your mortgage payment and more by downsizing your home
If you are looking into home downsizing during retirement, start by talking to your mortgage lender and accountant about your options. Downsizing may not only reduce your payments, but can also lighten your tax obligations. Plus, you may be able to profit from the sale of your current home by using it as retirement income or paying for a new, less expensive home in full, eliminating mortgage payments altogether.
Sponsored content was created and provided by Citizens Financial Group.
What a lot of expecting parents do not realise is the fact that their child will cost them a fortune, from babyhood all the way through to adulthood. Therefore, preparing a budget and knowing how to save money from the start is key to maintaining your finances and being able to successfully save up for your child’s future. Check out this infographic, which details the costs you will incur from having a child, as well as the many ways that you can save a lot of money by making smart buying choices, including searching out second-hand baby products.
How much does it cost to raise a kid? is an infographic that was produced by Gumtree
In most parts of Australia, real estate prices are through the roof. It’s one thing to pay market value for a home; having to pay even more on top of that is a whole other matter. After paying so much money to own even a very modest house, most buyers are irked by having to pay stamp duty. Indeed, the tax seems like nothing short of a punishment in most instances. That’s especially true when you consider its origins versus what it’s ostensibly used for today. Should the stamp duty on real estate purchases be eliminated? Most Australians would respond with a resounding yes.
In the earliest days, the stamp duty that was assessed on real estate transactions was used to cover the costs of filing and stamping the associated paperwork. At that point, it seemed like a perfectly reasonable thing to do, and it wasn’t all that expensive. Times have changed, though. These days, most Australian states and territories generate huge amounts of revenue by collecting the tax from home buyers, and the money is used for much more than filing and stamping paperwork. In fact, it could be argued that much of what’s collected isn’t used for real estate matters at all.
First home buyers tend to have the hardest time buying real estate in Australia. House prices are sky high, and those just starting out don’t often have a lot of money at their disposal. After scrimping and saving for years to amass a decent deposit on their first home, young people are thrown for a loop upon realizing that they’ll also need to come up with a considerable percentage of the value of their new home to cover the stamp duty. Sure, most territories and states waive huge portions of the duty for first home buyers; some offer concessions that eliminate it entirely. Still, asking those with limited means to come up with even more money in order to buy their first homes is hitting below the belt.
Will the stamp duty for real estate purchases ever go away? Considering how much state and territorial governments rely on the revenue that seems highly unlikely. Still, adjustments can and should be made. Rather than charge a percentage of the total value of a very expensive home, for instance, the duty could be a flat rate that’s a lot more reasonable. Whether any changes ever happen, however, is a whole other matter.