Many retirees downsize. Here are descriptions of gotchas for pre-planning.
https://www.nytimes.com/2022/09/09/business/retirement/retir…
**Downsizing in Retirement: Expenses They Didn’t Expect**
**On the way to spending less, people often have to shell out more, at least temporarily — especially when selling a home. Here’s what to consider.**
**By Susan B. Garland, The New York Times, Sept. 9, 2022**
**...**
**Get real on housing costs...Many older homeowners had delayed downsizing during the worst of the pandemic, and homes were now lingering on the market. Also, she said, sale prices have dropped since earlier this year, when mortgage rates began to rise. At the same time, she said, older buyers are competing with younger buyers for less expensive, smaller homes. “There are not a lot of smaller ramblers and single-level townhouses to go to...”**
**One often overlooked line item for sellers: closing costs, which could reach between 8 percent and 10 percent of the sales price, according to the real estate website Zillow. Those typically include a 6 percent real estate agent commission, though sellers could try to negotiate a reduction to that charge. Moving costs and home staging, such as new paint, floors or remodeling, will also eat into profits....**
__If your house has appreciated significantly over the years, capital gains taxes could crimp cash proceeds from a sale*.... . On top of that, the money they earned from the sale beyond $500,000 drove up their income-related monthly Medicare premiums for the year. And because their premiums are deducted from their Social Security payments, they received smaller monthly benefits. ...__ [end quote]
This link helps figure out cash flow changes from one home to another and also possibly renting.
https://squaredaway.bc.edu/calculators/move-or-stay-put
Taxation of home sale
In addition to financial considerations, there are many lifestyle considerations when moving. These are discussed in the article.
Wendy
