Consumer Newsletter – April 2014
By Elyse Umlauf-Garneau www.sres.org
Make Renovation Dollars Work for You
So after a grueling winter, it seems like spring may actually arrive this year.
If home improvements are on your to-do list and you can’t decide where to spend your renovation dollars, take a look at the 2014 Cost vs. Value Report for a little guidance.
The annual study, done by Remodeling magazine in cooperation with REALTOR® Magazine, looks at how much of your investment you can expect to recoup on renovation projects when you sell.
Especially if you’re readying your house for sale and you have finite resources, the list could help you pick the most worthwhile projects.
The report breaks down figures on a national and on a regional basis, so be sure to zero in on the data for your region.
Here are some national averages for top projects in two categories.
Top Midrange Projects
Project Job cost Resale value Costs recouped
Steel entry door replacement $1,162 $1,122 96.6%
Deck addition (wood) $9,539 $8,334 87.4%
Attic bedroom $49,438 $41,656 84.3%
Garage door replacement $1,534 $1,283 83.7%
Minor kitchen remodel $18,856 $15,585 82.7%
Top Upscale Projects
Project Job cost Resale value Costs recouped
Bathroom addition $72,538 $43,936 60.6%
Bathroom remodel $51,374 $32,660 63.6%
Deck addition (composite) $35,158 $22,881 65.1%
Garage addition $82,311 $48,065 58.4%
Garage door replacement $2,791 $2,315 82.9%
Certain projects should be considered with caution if you’re looking to maximize the return on your investment. For example, among midrange projects, the resale value of a $28,000 home office remodel was only $13,697. And the resale value of a $73,546 sunroom addition was $38,011.
See the full report, along with regional breakdowns, at http://www.remodeling.hw.net/cost-vs-value/2014/.
Maybe it really is time to seriously rethink the meaning of retirement. A pair of studies point to a lifestyle for future retirees that feature few of the hallmarks – full-time relaxation, travel, and puttering around – associated with traditional retirement.
More and more, people are remaining in the workplace, either out of financial need or to stay engaged.
For instance, an Associated Press-NORC Center for Public Affairs Research study, “Working Longer—Older Americans’ Attitudes on Work and Retirement,” spotted an attitude shift among American about work, aging, and retirement.
For one, 82 percent of survey respondents over age 50 who are still working say it’s likely or very likely that they’ll do some work for pay during retirement.
The Employee Benefit Research Institute (EBRI), too, has watched people’s expectations about retirement age tick up.
In 1991, just 11 percent of workers expected to retire after age 65. Now, in 2014, 33 percent of workers report that they expect to retire after age 65, and 10 percent don’t plan to retire at all.
In addition, the percentage of workers expecting to retire before age 65 has decreased, from 50 percent in 1991 to 27 percent. Those are findings from EBRI’s 2014 Retirement Confidence Survey.
Some of the attitude shift has to do with expectation of living longer, healthier lives.
The NORC study, for instance, found that Americans, who have reached or are nearing the traditional retirement age, don’t consider themselves old. Six in 10 say the feel younger than their age, for instance. Of those who are currently working, 47 percent now plan to retire at a later age than they expected when they were 40.
But – no surprise here – money concerns play a role too. EBRI found a shortfall in retirement savings among respondents.
In fact, some numbers are dire, with 36 percent of respondents reporting that they have less than $1,000 saved for retirement. That’s up from 28 percent in 2013.
As a result, workers are adjusting retirement expectations, with 82 percent reporting that their expected retirement age has increased.
Reasons for the delay:
• The poor economy (25 percent).
• Inadequate finances or can’t afford to retire (18 percent).
• A change in employment situation (17 percent).
• Needing to pay for health care costs (12 percent).
• Lack of faith in Social Security or government (9 percent).
• Higher-than-expected cost of living (9 percent).
• Wanting to make sure they have enough money to retire comfortably (8 percent).
EBRI also found that those who already are retired and are working do it for several reasons. Some enjoy working (83 percent) and want to stay active and involved (79 percent). But finances also figure into the decision.
More than half (54 percent) want to be able to afford extras and 52 percent need money to make ends meet. Others (38 percent) have seen a decrease in the value of their savings or investments and 34 percent want to maintain health insurance or other benefits (34 percent).
If you’re among those who are rethinking retirement, the studies offer additional in-depth information about shifting expectations, financial challenges, navigating the job market, and health care costs during retirement.
For more, see EBRI’s complete study at http://www.ebri.org/pdf/surveys/rcs/2014/EBRI_IB_397_Mar14.RCS.pdf and the NORC study at http://www.apnorc.org/PDFs/Working%20Longer/AP-NORC%20Center_Working%20Longer%20Report-FINAL.pdf.
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