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If you’re thinking of retiring soon, an often overlooked strategy can boost your finances.
About 60% of people who move to new place after retirement Choose cheaper housing markets than older neighborhoods where homes move from, according to new research from Vanguard.
This move could pay off big. Vanguard estimates that a retiree who moves to a cheaper market typically sells the old home and arrives with her home equity of about $100,000.
Using strategies to move to cheaper markets means that up to a quarter of retirees could increase their retirement funds just by moving, Vanguard says.
Vanguard cites the example of a homeowner in his early 30s who bought a home in Boston for $170,000 in the 1990s. The house quickly appreciated in the market and now he is worth half a million dollars. According to Vanguard:
“When she begins her retirement in Florida in her 60s in the early 2020s, investors will be able to make $200,000 in capital gains in their home in Boston, which they can add to their retirement fund. ”
As the investment firm points out, quitting your job and moving towards a golden age “could be helpful for many retirees.”
About 80% of Americans over the age of 60 are homeowners, and their home-locked wealth is worth about 48% of median net worth, according to Vanguard.
Will I have to move when I retire?
If you’re considering moving to a cheaper housing market after retirement, it’s important to weigh all your options and choose the location that best suits your desires and lifestyle.
Check out “16 Best Small Towns to Retire” to give the process a head start.
As we mentioned in 7 Amazing Benefits of Downsizing as a Retiree, downsizing has many benefits. However, moving to a smaller house in a new city or state isn’t right for everyone.
No matter how excited you are about the prospect of a new start, before you decide to raise the stakes and relocate, it’s a good idea to think about 7 Reasons You Shouldn’t Move When You Retire.