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One move can generate at least $100,000 for retirement

Carla Fried, Rate.com on

Published in Home and Consumer News

Of all the moves you can make heading into retirement to shore up your finances, actually moving might be the biggest win. An analysis of housing costs and property taxes in the 20 largest metro areas estimates the average savings from downsizing is nearly $200,000 over 10 years.

If the kids are finally launched into adulthood, parents looking to shore up their finances should give some serious thought to what they might be able to achieve by moving to a smaller home.

StorageCafe analyzed the price difference between two-bedroom and four-bedroom homes, factored in the costs of buying and selling (commissions, moving, etc.) if someone made that move, and what the differential would be in property tax owed on a less expensive home.

In the 20 largest metro areas, the average savings was $194,000.

Where downsizing nets the most

No surprise, the biggest net savings are in the priciest markets. San Franciscans willing to go a bit smaller could save an estimated $407,000 over the 10 years. Most of it is from the price differential in a bigger vs. smaller home — nearly $1.6 million on average for a four-bedroom home, and around $1 million for a two-bedroom. The tax savings would be an additional $28,500. After closing costs of nearly $157,000, that nets to an estimated downsizing win of $407,000.

 

In the San Diego metro area, the net savings is nearly $265,000. In the L.A. metro areas, the 10-year savings is $240,00.

Seattle is the fourth-biggest win, with a downsizing savings of nearly $235,000. Miami and Boston clock in with savings of more than $230,00O.

The New York City metro area, Detroit and the Washington D.C. metro area all could deliver estimated downsizing net gains of more than $200,000.

The only big metro area with a downsizing win of less than $100,000

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