Retirement planning is integral for serious minded individuals who want to be able to enjoy a certain modicum of financial security during their senior years. Putting yourself in a position to be able to pay your way for perhaps a couple of decades or more without working can require some long-term financial discipline as you act within an intelligently conceived framework over an extended period of time.
In order to be able to reach your objectives you must accurately project your future expenses. With this in mind you would do well to be cognizant of your property tax responsibility.
Taxes generally do not remain constant. You may be presented with ever-increasing property tax bills while you are living on a fixed income. When you are making your projections you should keep this in mind because in fact a great many people do indeed fall behind on their property taxes and as a result tax liens are imposed.
According to the National Tax Lien Association between $7 billion and $10 billion in property taxes will go unpaid each year. Investors purchase tax liens from municipalities, and this can be quite lucrative because of the interest that is charged to homeowners trying to catch up on their back taxes.
If you have any concerns at all about being able to keep up with your property taxes you have options. You may not need a home as big and as expensive as the one that you have been residing in once you retire.
Downsizing can have positive financial implications as you reduce your tax responsibility and lower your utility and maintenance costs. In addition, the reduction in square footage can make it easier for you to get around if reduced mobility starts to become a concern as you reach an advanced age.
John Kuhn, Estate Planning Attorney
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