On May 3, 2024, Realtor Magazine quoted Larry Mandelker on how to plan for late-life housing decisions.
According to the article, baby boomers, a huge cohort of 68.6 million Americans born between 1946 and 1964, aren’t rushing to relocate to senior and assisted-care facilities in the Sunbelt. Rather, the vast majority—92%—say they want to age in place, even if they haven’t yet planned how to do so safely, according to American Advisors Group.
Mandelker told Realtor Magazine that late-life housing decisions should be taken into consideration when planning for retirement. How much equity boomers have built up in their house—along with how much they’ve saved—is critical information for evaluating how ready they are to meet their financial and lifestyle goals, said Mandelker.
When you’re working with older sellers who are buying a new property, encourage them to consult an attorney before buying to ensure ownership is structured appropriately, Mandelker advised. Many times, owners are encouraged to put assets, including real estate, into a trust, which may offer creditor protection or tax benefits.
Another financial issue to raise is the possibility of a capital gains tax, which depends on what they paid, how long they lived there, if it was their primary residence, the amount spent on capital improvements, and their marital status, Mandelker said. In areas where houses have seen big appreciation, homeowners may feel stuck and decide to stay, even if maintaining the house is becoming difficult, so their heirs benefit from the step-up in basis exemption upon their death.
To access the article, click here.