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Planning to Sell Your House to Fund Your Retirement? Good Luck!

(Paul Brandus, MarketWatch) I’ve written before about the grim financial prospects that millions of older Americans face. Meager personal savings, debt, looming health care costs and more are pushing many to the brink.

At least you could always cash out of your house and move somewhere cheaper, right? Perhaps, but as a new study from Zillow, the real estate website warns, perhaps not.

The problems are threefold: Demographics, geography and finances.

Looking at the first problem, there are a lot more baby boomers (defined as those born between 1946 and 1964) than those in the next generation, the so-called Generation X crowd (generally defined as those born between 1965 and 1985). At their peak, boomers totaled around 76 million, but Gen Xers around 50 million—only two-thirds as many.

Zillow says 34% of all owner-occupied homes in the U.S. are owned by people aged 60 or older. Millions of these homes will hit the market over the next two decades as senior boomers either die, move in with their children or to an assisted living facilities.

The problem: There are too many homes to be absorbed by Gen Xers. This suggests that prices will have to fall.

Geography matters, too, and will impact some areas more—perhaps much more—than others.

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