Retirees Expect Their Home to Be a Financial Safety Net. They Shouldn’t.
The New York Times • • business
Key Points:
- Homeowners aged 70 and older hold $13 trillion in housing wealth, representing about one-quarter of the country's total housing wealth, according to Redfin.
- Many baby boomers, now reaching retirement age, rely on their home equity as a financial safety net during retirement.
- Research from the Federal Reserve Bank of Philadelphia shows that older homeowners tend to sell their homes for lower prices than younger sellers, with an 80-year-old receiving on average 5% less than a 45-year-old.
- Lower sale prices for older sellers may restrict their future living options, such as downsizing or affording nursing care, raising concerns about their financial security in later life.
- Financial advisers emphasize the importance of planning for where older adults will transition after selling their homes, given the potential impact on their retirement lifestyle.
