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This boomer couple would be hit with $700,000 tax bill if they sold their mansion
(www.businessinsider.com)
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this post was submitted on 07 Aug 2025
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I mean,
Add in buying a new house and moving costs and it makes sense why they'd be hesitant. Retirement and housing are expensive.
Selling their house for $4,500,000 and paying $750,000 in taxes still leaves them with $3,750,000 for an over-55s, healthcare, and investing.
I think the multi-millionaires will be fine.
Okay disclaimer: I believe having to pay any kind of tax on your primary residence is messed up, so I'm more than a little biased here.
As far as I've been able to find on Google, retirement in California runs up to about 1 million a decade. With a generous estimate of 20 years remaining for both of them, you're looking at 1.75 mil for buying a home, moving, assorted emergencies, end of life care, inheritance before you factor in anything they might actually want to do with their remaining lifetimes. That's... not really a lot. I mean hell, the median home in San Francisco is 1.5 mil. It's certainly possible to cut costs here and there to make it work (particularly by choosing a house on the cheaper side) without having a below-average retirement, but at this point we're talking about retired people wanting a good location and quality of life and maybe some financial freedom for their retirement, not evil rich people hoarding money. What I'm trying to say here is that working class people (indeed, everyone) should be allowed to want this stuff, and not denied it because the government would rather take their money than tax the filthy rich. I'm speculating here, but I doubt any of this is radically different from what would be considered normal, maybe on the better side, 50 years ago. Capitalism has managed to convince people that they're not entitled to this stuff, but they are. You, me, the couple in the article, we're all entitled to a good retirement with financial freedom; just because not all of us get to have it doesn't change that fact.
This assumes the people who had the means to obtain a 5,000 square foot house in Southern California, which was still a costly prospect even 30-40 years ago have absolutely no means of retirement planning aside from their home.
Given their social status they are far more likely to have well funded 401ks and given their age they are even likely to have access to pensions (edit: they def do!), a pipe dream for the millennial and younger.
They can pay their fucking taxes. Maybe shop at Neiman Marcus less, buy a few less Lacoste shirts and tighten your purse strings like the rest of us. I probably won’t ever retire and I certainly won’t ever fund the building of a house worth 1.8million in 1990 dollars
they have a pension and nearly $3M in cash coming in from the sale (after tax)
if they have money issues at 71 with that situation, boohoo
It’s almost like housing shouldn’t be a retirement plan.
If 3 million are not enough i very much doubt the 750.000 would make a difference.
That's the difference of $26,250 per year to spend without risking digging into the principle.
How so? Assuming a total of a million and a half for buying a house, moving and whatever else they need to do before actually moving in, that's about 2 mil for two retired people looking to live 15-20 years in California (subtracted 1 mil from 4.5 mil). The difference 2 mil and 3 mil or even 2.5 mil represents a massive change in quality of life, financial freedom, etc. Note that a moderate standard of living as a retired couple in California costs about 1 mil/decade*, so the extra money means they can have something for emergencies, to leave as inheritance or whatever else someone might want to do with money. I certainly wouldn't gamble on having to live the last years of my life stony broke.
*This is likely going to get even higher with Trump et al ruining everything.