If you're looking to retire, you may want to consider property tax deferrals.
Are you (or someone else you know) looking to retire in the near future? Finding sustainable retirement income has become increasingly difficult with the unreasonably high prices of health costs and low interest rates. However, there is an alternative option for saving retirement money that a lot of homeowners are turning to.
Property tax deferrals: this is a saving strategy that has become prominent in several cities. Essentially, property tax deferrals allow homeowners to put off paying for property taxes on their home until they decide to sell it or, a bit more morbidly, until they pass away.
But how does this work? Like most things that sound too good to be true, there is certainly a catch – and this is no exception. When a homeowner using property tax deferrals decides to sell or passes on, the amount owed in the deferrals will have to be reimbursed to their local government, with the addition of an interest bonus. For this reason, some people are apprehensive about this saving tactic – many people don’t want to have to worry about paying back what they owe, in addition to interest, and others don’t want their next of kin to have to worry about sorting out their debts when they die.
Because of this, property tax deferrals may take some considering before deciding to pursue them. They may not work for everybody, but for some they are the best option, especially depending on the area in which they live. According to Alicia Munnell, director of the Center for Retirement Research, “It’s important for a state like Massachusetts, because it’s such a high-tax state. It’s sort of kept as a state secret, because right now it diminishes that tax revenues that the cities and towns get.” Depending on the state you live in, this very well may be the perfect option for you – if so, take advantage of it while you can!