Life Events

Relocating
If you're relocating because of a job change, thinking about moving to a new home upon retirement, or buying a home for the first time, consider the following:
The federal tax structure favors home ownership over renting.
The interest portion of your mortgage, which constitutes the majority of your mortgage in the early years, is tax deductible. You may be able to significantly improve your financial situation without spending much more of your income on housing than you did when renting, due to the mortgage interest deduction.

Potential Appreciation
In addition to tax breaks, your home can also be an investment. Real estate values have risen much faster than the rate of inflation in the past 30 years. While past performance cannot guarantee future results, over time, your new home may increase in value. In addition, the equity in your home increases as you pay off the mortgage. Once your home's mortgage is paid in full, which often coincides with retirement, you could consider a smaller, more economical home and add the profit from the sale of the first house to your retirement savings.

Tap your IRA for your deposit
The Taxpayer Relief Act of 1997 allows first-time home buyers to withdraw up to $10,000 from an IRA for first-home purchases. While taxed as ordinary income, the withdrawal would not be subject to the 10% penalty for early withdrawals. Withdrawals from a Roth IRA can also be taken up to $10,000 free of penalty or tax liability for first-time home purchases. You should consider a withdrawal from your IRA only if you have no other funds available for the down payment of your first-time home.

If you're moving to a new house
If you're about to move to a new house, be sure to add insurance to your packing list. Insurance can help protect you if your belongings are damaged, lost or stolen during the move, or if a friend hurts himself/herself while visiting you. Also think about how your new location may impact your need for automobile insurance. A measure of planning before you move may help protect you against the unexpected events that could occur during a move. If you sold your old home for a profit, and you lived in that house as your primary residence for the previous two years, all or a portion of the gain from the sale will not be subject to income tax. These tax-free proceeds may be invested in your new home or may be invested with your financial professional.

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