How great is the anxiety over retirement? A study shows even greater, for some, than the worry generated over the Sept. 11 terrorist attacks in New York.
That was the finding of a group of researchers at the Center for Retirement Research at Boston College, said Andrew Eschtruth, associate director for external relations at the institute.
“Thinking about retirement induces anxiety,” Eschtruth said Tuesday during a presentation at the Retirement Income Industry Association spring conference in Chicago. “People feel powerless. They don’t feel that they have control over their destiny … and could be facing a situation that could have a bad outcome or a good outcome.”
Eschtruth, whose presentation was entitled “How People Behave: New Insights on Retirement Decisions,” broke down his talk into three major areas: retirement anxiety, saving strategies and drawdown behavior.
Unsurprisingly, the Boston institute’s research shows that the financial crash of late 2008 has significantly affected the way people think about retirement and the ability of public institutions and private plans to provide for a safe nest egg.
For instance, in the past few years there have been 613 average monthly Google citations with the search terms “state, local, crisis and pension fund.”
Eschtruth (left) said the web searches reflect a real concern. The institute’s research shows that a larger percentage of people today are at risk of failing to maintain their current standard of living after retirement than before the financial crisis: 44% versus 51%.
Gen Xers will suffer because the retirement age will increase to 67 in the years to come, but Eschtruth also pointed to a nagging problem for most Americans.
Despite the crash in the markets and the housing crisis, individuals still aren’t saving enough for retirement.
In one study, the Boston researchers investigated the behaviors of people in their 50s and older whose kids had left home. It might be reasonable to expect these parents to spend less of household income, but in fact the study found they spent more.
Turning to the draw-down phase of retirement, Eschtruth said that attitudes toward home equity may change in the near future. Until now, research shows that retirees hold onto their homes well into their 80s and downsizing a home remains rare. In the future, however, ignoring home equity may be a luxury that few can afford. Without selling a home, more and more retirees will be at risk of not being able to afford retirement.
Eschtruth suggested that if the investment advisors attending the conference explain the consequences of holding onto home equity, more retirees might sell and downsize. In fact, Eschruth provided data to show that once the threat to retirement health was made explicit, more people changed their behavior and decided to work longer or save more.
Financial Management Tips For Selling Your Home
If your home market has started to peak, you may be ready to sell your home. In the seller’s market, there’s a lot to research in order to keep your edge on the housing market. To walk away with the best price, you’ll have to keep tabs on priorities like where you’ll move to next; how you’ll improve your resale value; and how you can encourage buyers to accept your asking price, or even bid higher. You can’t discount solid research when entering the home market. Taking care of a few actionable items with good financial management can mean the difference between sitting on your home for eight months, and turning it around in three.
The first step to take before selling your home is to figure out where you’ll move once you’ve handed over the keys. You don’t want to be left holding your bags and boxes by the curb side, so start researching a new place — or if you plan to rent, look for apartments and make sure they’re available when the time comes.
Be as prepared as possible, since selling is no small feat. Your first step is to look into a home loan pre-approval, and examining your credit ratings to be sure you’ll get a good percentage. If you’re interested in moving up-market with your next house, too, be sure you can make a sufficient down payment so your monthly payments will be reasonable.
As you look at your possible early pre-payment penalties costs, request a mortgage payoff amount as well: It’s is the amount of money you’ll need in order to pay off the loan right now. You’ll need that information — as well as the info on pre-payment penalties —to determine a good listing price for the home as well.
Quick Fixes: Home Improvement
Let’s focus on that listing price for a moment, though. Obviously when you sell your home, you’re looking for the best price possible. Often, then, that means doing small to even major renovations so that you land in a good segment of the market. If you’re skeptical, don’t worry: you’ll be surprised at your return-on-investment for these improvements. Focusing on areas like bathrooms, kitchens, and the master suite becomes especially valuable at this stage. A clean, smart-looking, and upgraded kitchen can add an enormous amount of value to your home and can also improve its general appeal to your buyers.
Other home improvements can be easier to manage, as well: You can improve the value of your bathroom, for example, by replacing its faucets, shower heads, fixtures, and lighting. It’s also a good idea to replace the toilet and to examine the floors and counter tops for wear. Last but not least, your walls could probably use a facelift: especially if your bathroom has a show! er, wall s can accumulate mold or mildew. Most people prefer painted bathroom walls over wallpaper, as well, so you may want to rip out that old floral pattern and give it a more modern look.
A few other cheap upgrades for your home include replacing its carpeting and doing minor landscaping in your yard. Clear out weeds and debris outside, power-wash your driveway, and don’t forget to repaint or re-stain those old wooden fences. A fresh coat of paint on the outside of the home — in a natural, neutral tone — will also give your home that curb appeal it desperately needs for a quick and easy sale.
Finally, The Appraisal
Your next step in the process of selling your home is to order an appraisal! This is important, because a professional will be able to assess the fair market value of your home. Appraisals are tricky, though: don’t fall under the assumption that you’re automatically going to get a buying price for the amount at which your home was appraised. A myriad of other factors come into play, and you could end up selling for more or less depending on the surrounding neighborhood’s market, the number of buyers on the market, and the current standard interest rates.
Key Costs
Since everything here in the end is about improving your personal finance situation, you need to know what the costs of selling your home will actually be. Some key factors in determining your overall costs are:
Now that you’re armed and ready to sell, you’ll need to exercise patience and maintain a clean home for potential buyers to view. If you use a real estate agent, you shouldn’t have much to worry about. Simply keep your finances in order, keep in mind the costs of selling your home, pre-payment penalties, and mortgage payoff amounts when considering a potential sale, so you can leave confidently with a tidy sum at the end of the sale.
Your personal finances are important, especially when selling a home. Be smart in your choices, stay informed, and be prepared for when that real sale occurs — so that you’re not left knocking on your in-laws’ door for a place to stay!
The first step to take before selling your home is to figure out where you’ll move once you’ve handed over the keys. You don’t want to be left holding your bags and boxes by the curb side, so start researching a new place — or if you plan to rent, look for apartments and make sure they’re available when the time comes.
Be as prepared as possible, since selling is no small feat. Your first step is to look into a home loan pre-approval, and examining your credit ratings to be sure you’ll get a good percentage. If you’re interested in moving up-market with your next house, too, be sure you can make a sufficient down payment so your monthly payments will be reasonable.
Check your credit ratings. Unlike credit reports, credit scores are a formulated rating which lets you know where you stand in terms of creditworthiness. One of the most popular and credible credit score are FICO scores from Fair Issac, which are used by 90% of the largest U.S. banks.
Get Your Credit Score! Find out where you stand in terms of credit by getting your scores.
- Equifax
- 3-Bureau Credit Report and FICO Score!
- Sign Up
- Experian Credit Score
- Free Score and Reports from Experian.
- Sign Up
As you look at your possible early pre-payment penalties costs, request a mortgage payoff amount as well: It’s is the amount of money you’ll need in order to pay off the loan right now. You’ll need that information — as well as the info on pre-payment penalties —to determine a good listing price for the home as well.
Quick Fixes: Home Improvement
Let’s focus on that listing price for a moment, though. Obviously when you sell your home, you’re looking for the best price possible. Often, then, that means doing small to even major renovations so that you land in a good segment of the market. If you’re skeptical, don’t worry: you’ll be surprised at your return-on-investment for these improvements. Focusing on areas like bathrooms, kitchens, and the master suite becomes especially valuable at this stage. A clean, smart-looking, and upgraded kitchen can add an enormous amount of value to your home and can also improve its general appeal to your buyers.
Other home improvements can be easier to manage, as well: You can improve the value of your bathroom, for example, by replacing its faucets, shower heads, fixtures, and lighting. It’s also a good idea to replace the toilet and to examine the floors and counter tops for wear. Last but not least, your walls could probably use a facelift: especially if your bathroom has a show! er, wall s can accumulate mold or mildew. Most people prefer painted bathroom walls over wallpaper, as well, so you may want to rip out that old floral pattern and give it a more modern look.
A few other cheap upgrades for your home include replacing its carpeting and doing minor landscaping in your yard. Clear out weeds and debris outside, power-wash your driveway, and don’t forget to repaint or re-stain those old wooden fences. A fresh coat of paint on the outside of the home — in a natural, neutral tone — will also give your home that curb appeal it desperately needs for a quick and easy sale.
Finally, The Appraisal
Your next step in the process of selling your home is to order an appraisal! This is important, because a professional will be able to assess the fair market value of your home. Appraisals are tricky, though: don’t fall under the assumption that you’re automatically going to get a buying price for the amount at which your home was appraised. A myriad of other factors come into play, and you could end up selling for more or less depending on the surrounding neighborhood’s market, the number of buyers on the market, and the current standard interest rates.
Key Costs
Since everything here in the end is about improving your personal finance situation, you need to know what the costs of selling your home will actually be. Some key factors in determining your overall costs are:
- To get your home out into the market, you’ll need to advertise — which may include costs for listings in newspapers, on websites, using signs near the home to announce your sale, and flyers for the home that potential buyers can use as a reference.
- Even though your buyer should pay for surveys and inspections, it’s good to keep these expenses in mind as your buyer will need to consider them when considering their purchase.
- If you use a real estate agency to sell your home, you’ll ne! ed to kn ow the real estate commission amount and any possible miscellaneous fees.
- Don’t forget to include prorated costs for annual expenses like property tax, propane tank rentals, home owner association fees (if applicable), or any other rental fees for the home.
- The excise tax for the sale will make a difference in your total.
- Closing costs, escrow fees, and any possible attorney or professional fees factor in, as well.
Now that you’re armed and ready to sell, you’ll need to exercise patience and maintain a clean home for potential buyers to view. If you use a real estate agent, you shouldn’t have much to worry about. Simply keep your finances in order, keep in mind the costs of selling your home, pre-payment penalties, and mortgage payoff amounts when considering a potential sale, so you can leave confidently with a tidy sum at the end of the sale.
Your personal finances are important, especially when selling a home. Be smart in your choices, stay informed, and be prepared for when that real sale occurs — so that you’re not left knocking on your in-laws’ door for a place to stay!
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