What Does Today’s Rapidly Changing Housing Market Mean for Retirees?
Following its September 2022 meeting, the Federal Reserve raised interest rates by 0.75%, pushing the federal funds rate to a target range of 3.0% to 3.25%. That news drove the average rate for a 30-year mortgage to 6.7% by month end, the highest since 2007, and more than double the 3.01% average from a year ago.1 Below, we look at what this may mean for retirees seeking to buy or sell a home in the current market.
What does this mean for buyers?2
Sellers can expect the following as the overheated real estate market begins to cool:3
Housing is one of the biggest expenses you can expect in retirement. Even those who have paid off a mortgage and own their homes outright can expect to pay annual costs that can add up quickly. This includes property taxes, homeowner’s insurance, and maintenance costs.
To learn more strategies for managing housing and other expenses in retirement, call the office to schedule time to talk.
1 Siegel, Rachel and Orton, Kathy. “Mortgage rates hit 6.7 percent as housing market keeps cooling.” The Washington Post, 29 September 2022, https://www.washingtonpost.com/business/2022/09/29/mortgage-rates-fed/
Should You Prepay Your Final Expenses?
Funeral expenses for Queen Elizabeth II, the UK’s longest serving monarch, are estimated to exceed $7.5 million.1 That’s an unfathomable amount for those of us who were not born into royalty or don’t anticipate a state funeral upon our departure. Nonetheless, there’s no question that paying for final costs can be royally expensive—no matter who you may be. As a result, there’s a lot to be said for advanced planning, especially if your goal is to spare loved ones from financial stress as they are grieving your loss. One way to ensure that family members or other loved ones are not saddled with unplanned expenses upon your departure is to plan for those expenses now. There are several ways to accomplish that, as discussed below.
Many funeral homes offer prepaid plans. Prepaid plans are arranged with a funeral home ahead of time and typically range from $10,000 to $25,000. Most plans allow you to choose from a range of options, such as the services of a funeral director and funeral home staff, a venue for the funeral or memorial service, the type of burial, flowers, stationery and more. Plans may be paid in full or in monthly installments directly to the funeral home. However, if you move out of state, change your mind about the options or preferences selected—or if the funeral home goes out of business or engages in fraudulent practices—you could lose what you’ve already paid. There are several alternatives to pre-paying your funeral expenses that may offer greater protection, such as:2
If you have questions about planning your final expenses, call the office to schedule time to talk.
1 Kesslen, Ben. “Queen Elizabeth’s $7.5 million funeral security cost will be priciest in UK history, officer predicts.” New York Post, 19 September 2022, https://nypost.com/2022/09/15/queen-elizabeths-7-5-million-funeral-security-cost-is-priciest-in-uk-history/
This information was written by KRW Creative Concepts, a non-affiliate of the broker-dealer.
Retire Wise | October 2022
October 25, 2022