Downsizing Could Make Sense

Current numbers show that 12.5% of the entire population is 65 years of age. This is not a huge number, but it is still a number to take a look at. I would be willing to bet a good portion of those 12.5% are considering downsizing because they do not need the space they once did. Not only that, but there’s a great sense of freedom once you have gotten rid of some of your age old “stuff” that you no longer need.

Making a move to a smaller, less expensive home could free up some money that could be well used elsewhere. Savings in the utility department will also be noticed, as well as the lower premiums for insurance and property taxes.

Leaving the home where you raised your family may be difficult, but downsizing to a smaller home may be the most logical move. Depending on your situation, your interest may have changed and a different part of town might look more attractive than it once did.

The IRS use to have a once-in-a-lifetime exclusion of $125,000 of gain from a principal residence but it was changed so that homeowners’ are eligible for an exclusion of $250,000 of gain for single taxpayers and up to $500,000 for married taxpayers who have owned and used their home two out of the last five years and haven’t taken the exclusion in the previous 24 months.

Consult your tax professional to see how this could apply to your situation!

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