"The single most important number in this scenario is $1,517 a month. That is what the paid-off home actually costs to keep, once you add $9,800 in property taxes and $8,400 in insurance and maintenance."
"Total income is $4,400 a month, leaving $2,883 for groceries, healthcare, gas, gifts, and any unexpected expense. Healthcare alone routinely consumes a third of that for someone in her 70s."
"The equity sitting in the walls also earns nothing. A 10-year Treasury currently yields about 4%, and a balanced portfolio drawn at the standard 4% rule produces real, spendable cash every month."
A 71-year-old widow with a paid-off home worth $850,000 faces high monthly costs of $1,517 for property taxes and maintenance. With $600,000 in retirement savings and a monthly income of $4,400, downsizing could free up $2,250 monthly. Many retirees hesitate to downsize due to emotional ties and the exhausting process, but the financial implications are significant, especially with rising inflation and healthcare costs consuming a large portion of their budget. The equity in the home generates no income, unlike investments that yield cash.
Read at 24/7 Wall St.
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