Taxes Can Overwhelm Retirement Income
The housing market is back on the rise, and while it’s hot, you might want to cash in while you hold all the chips. For you Baby Boomers, this could be the nest egg you’ve been waiting on for quite some time.
Sure, you’ve lived here for a while and call New Jersey home. That’s why you never go to the beach…you go ‘down the shore.’ You don’t ask new acquaintances where they live, but what exit they take off the Turnpike.
However, the market is enticing. You’ve worked hard all your life and you’re thinking about or ready to retire. You might get a pension, 401K payments, stock dividends. Do you really want to invest that money back into property taxes, some of the highest property taxes in the country, mind you?
Trulia.com reports that houses in Princeton, for example, can be listed for an average of $719,486 and the typical sale is $677,500. With that kind of money, you could move to many places in the United States and pay generally lower property taxes, such as in Pennsylvania and especially the Southeast. You could practically live like a king—or queen—whatever the case may be. The best part is that you could make the most of your retirement.
Even selling a home in less expensive areas of the county could produce a veritable windfall that oftentimes would purchase more house elsewhere with lower property taxes.
And, don’t feel too badly for the 40-somethings who will move into your old abode. According to neighborhoodscout.com, an average house will increase 97.6 percent in value over the next 25 years when compared to the last quarter century. When all is said and done and those 40-somethings are ready to retire, they ought to be able to list their house for a projected $1,380,726 and sell it for $1,328,740. Math isn’t my strong suit, but I can tell you that this is a no-brainer.
The housing market is unlike any other in our economy. Today, we’re in a buyer’s market for the younger generations, and a seller’s market for our retiring Baby Boomers. It offers Baby Boomers the opportunity to sell and start making their Golden Years truly golden.
For the younger generations, now is time for you to double down and make the best investment in your life—purchase a house. It will be your nest egg like it was your predecessors’.
For a bonus, check out my last blog and see why the winter months are the best time to buy a house.