Alicia Munnell advocates for property tax deferral programs as a more accessible retirement funding option for older homeowners, noting that existing methods like downsizing and reverse mortgages pose challenges. A proposed bill in Massachusetts aims to pilot such a program, potentially saving homeowners up to $4,755 annually. Despite benefits, current participation in deferral programs is low, hindered by factors such as eligibility issues, lack of awareness, and stigmas. By instituting a pilot program, Massachusetts could pave the way for broader adoption and reform to support retirees more effectively.
"The conventional approaches involve downsizing to a cheaper home... or taking out a reverse mortgage, which allows people to stay in place but involves substantial complexity and upfront fees."
"This is due to three primary reasons... most homeowners are not eligible, eligible homeowners are not aware... and concerned about a stigma attached to an income-tested program."
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