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From Rasmussen: "For the second month in a row, less than half of America’s homeowners believe the value of their home is worth more than the amount they still owe on their mortgage."
Friday, July 22, 2011
Northern Virginia Bits Bucket 7/22/2011
Posted by Harriet at 6:00 AM
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7 comments:
I'm quite surprised by the number of retiree's who believe they are underwater (46%). What happened to the thought that with age comes wisdom? Anyone, other than the wealthy, should plan to have mortgages paid off by retirement. It's just basic financial planning 101. It would have been interesting to see this entire survey in relation to net worth and income.
We get a hint of what that survey would reveal when we look at underwater results for higher income folks and investors.
VA_I, although I generally agree with your sentiment, I think I've read elsewhere that something like 40% of retirees had to retire earlier than they expected, due to a health problem or that of a spouse, losing a job and not being able to find another one, etc. My guess is that a significant part of the retirees with some financial stress is due to serious negative events they hadn't planned on.
While it could be argued that people should be aware as they hit 55 or so that things things can happen and plan accordingly (and you and I do as do many others), others would argue if you always plan your life for the worst, you miss out on so much in life, and often find out the worst never happens. The reality is that we may also be luckier than others. So my thinking is somewhere in the messy middle.
I should also add that divorce and spouse's death also sometimes shake up what once seemed like sensible plans. I know several couples in that situation, one with a disabled adult child to care for, and another lower income couple who has always lived frugally but he now needs a kidney transplant, and doesn't even feel he can tell employers because he is afraid he will be fired--to make matters worse, a neighbor's pit bull got loose, killed his dog while he was walking it and injured him. They were in no position to afford the $5K in bills. Fortunately friends and family are helping, but it's not going to be easy.
Agreed Ace; but 46%????
I can see terrible, unplanned events happening to 5 or 10% of retiree's; but 46%!!!!
Health, life and disability insurance are no-brainer's OR should be. If one reaches retirement age with not enough insurance or assets to protect against a calamity that represents extremely poor planning.
This is why I think it's important to delve beyond "underwtaer homes". One's residence may be underwater, but if you have other assets it becomes more meaningless.
Some people think they know better than paying a few dollars now for security later. (ie, health, life and disability insurance).
Those cups of coffee are SOO important in the morning, lol!
Cheryl
part of the reason i'm bearish is because of things you point out.
Retirees with 30 year mortgages?
mortgage means Dead-Pledge,
or debt until you die :-(
ultimately, what's the difference between someone who is 70 with a mortgage and them just renting an apartment?
these people are insolvent, and the banks holding the paper are insolvent.
pat,
They have to live somewhere and I'm more than happy to accomodate them.
I care about rent buying me houses and not so much about prices. I will say, again, that as I correctly predicted a few years ago, investor's have put a floor in.
Perhaps not for expensive homes but I would have to believe, by and large, that wealthy people in these homes can get through a rough patch. Witness North Arlington, McLean, Great Falls, Bethesda and Chevy Chase.
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