Many people are looking for ways to increase their retirement income. For most of these individuals, their homes are the greatest asset. A large portion of the aging population has failed to plan effectively in order to have sufficient savings at retirement. We always think we have time. They now are looking to real estate to supplement their retirement income.
Real estate values are very unpredictable, especially now with the decrease in real estate markets. Prices have been falling for some time and completely flat in others. It will take some planning to get the most from selling your real estate to supplement your retirement.
Be Realistic. To plan effectively, you must be realistic about the price you may get for your home. Real estate is an up and down market, so you should assume a traditional real estate market for valuating your home, with gains in value equal to the inflation rate. At retirement, you will have the same purchasing power you currently have. If gains in real estate values are better than the inflation rate, then you will have more. Just don?t count on it.
Get the Most from Your Real Estate. People used to work hard to pay off their mortgages for homes they planned to raise their children in and retire. Since 1989, the number of people 65 and older with mortgage debt has nearly tripled, adjusting for inflation. Making payments on real estate in retirement years will likely deplete your savings and retirement income faster than anything else.
Downsize Your Home. If you are living in a home that is larger than what you need, do not hold on to it for sentimental reasons. Selling the larger home for a smaller one can give you a smaller mortgage payment than you currently have or possibly even having no mortgage at all for the smaller place. It also means less physical upkeep by you, as well as less maintenance and repair costs in the future during retirement. Remember that there are some costs in selling, moving and new home renovation that must be deducted from the sale proceeds.
Sell the Extra Real Estate. If you have a second home or vacation real estate that will not be your retirement residence, consider selling this extra real estate now, putting the sale proceeds into your retirement savings. You can put the mortgage and annual upkeep payments for this property into your retirement savings, too.
Reverse Mortgages. Although this has been around for some time, we are hearing a lot about them lately. Such mortgages give you 50 percent or more of your home?s value with no mortgage payments, which are collected by the lender at your death or if you sell the real estate. Do your research well on reverse mortgages.
The main reasons to pay off your mortgage include decreasing expenses during retirement, building more equity in order to live on it later and saving money on interest rates. Paying off your mortgage is a good thing to do, regardless of what the real estate market is doing.
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Related posts:
- Got Spare Income? Become A Real Estate Investor
- Become A Landlord And Increase Your Wealth
- The Moderate Income Mortgage Squeeze
- Low Income Homes For Sale In The Washington, DC Area
- Home Buying Assistance In Virginia For Low Income Earners
Source: http://www.realestatebriefings.com/real-estate/realestateretirementincome/
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