By Marilyn Kennedy Melia
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The financial security of many baby boomers may depend on whether they can accomplish something they’ve never done: move to a smaller, less expensive home.
Nearly 76 percent of those 55-64 own a home, according to first quarter 2016 data from the U.S. Census Bureau. Twenty-seven percent of households in that age group has no retirement savings or defined benefit plan and has few other financial resources.
Social Security, even supplemented by modest savings, may not cover the expenses of a home — even one with no mortgage.
“Given the relatively modest amounts many retirees have or will have in their retirement savings accounts, we think downsizing will become more popular,” says Steve Sass, program director for the Center for Retirement Research at Boston College. Smaller, less costly accommodations “can significantly reduce the household’s expenses for taxes, insurance, utilities and upkeep.”
To help those facing retirement figure out how moving can change household finances, the CCR provides a calculator at squaredaway.bc.edu. Click on Tools.
While Sass knows of no statistics on how many do downsize, “the estimates indicate that relatively few do it.” Benefits to downsizing sooner rather than later, he says, include realizing financial rewards sooner, having the energy to make a move and the ability start over with new friends and social connections.
It’s not easy to shed possessions or the home you’ve worked hard to acquire, acknowledges Heidi Henning, managing director of the National Association of Realtors
She manages NAR’s “Seniors Real Estate Specialists” designation, a program introduced in 2007 to help real estate salespeople assist downsizing seniors.
“We cover the challenges both emotional and physical,” she explains. “It’s hard to even begin the process of sorting through possessions.”
Agents learn how to develop a network of experts in their area who can be called on to help older clients selling a home.
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