03/12/2023
Want to stretch your retirement savings?
New research from Vanguard Group shows that relocating can be a lucrative way to shore up retirement savings.
In fact, it can give you a 6-figure boost.
This "retire and relocate" strategy works when you sell your home in an expensive market and move to a cheaper housing market.
The average homeowner age 60 or older who makes this maneuver is able to access an extra $100k in equity (which can make up for a deficit in retirement savings).
Those in the top 10th percentile tap an average of $347k in extra equity.
There are obviously other factors to consider – like healthcare costs, whether you know people in the new city, and what sort of plans you have for your retirement lifestyle.
However, for those who aren’t afraid of change, this retirement housing hack can create some extra breathing room.
Reverse mortgages are another option whether relocating or not, such as a Reverse for Purchase. For example, if a retiree is buying a $500,000 home, The lender will finance an estimated $190,500.
This leaves $190,500 for the retiree to grow and use during retirement. In just 10 years, this could grow to over $300,000 at just 5.16% rate of return. Sure beats the alternative.
You can read the full research study here.
