Is one of your retirement goals to leave your old home behind for a new location? Maybe family is important to you, and you want to move closer to them. Or you want to make your vacation home your full-time home. Whatever your reason, here are some tips to help you prepare for your potential move.
Tip 1: Plan ahead.
When relocating in retirement, it’s best not to rush into a decision but rather give yourself time to explore all the potential new locations you want to consider. It’s important that you spend time in the location you’re interested in and talk to other retirees currently living there so you know what to expect. Moving can be stressful — not to mention expensive — especially for retirees. So, be sure to take your time — you don’t want to move back if you find that life in your new home didn’t turn out how you expected.
Planning ahead is especially critical if you want to move abroad, which has become increasingly popular due to a lower cost of living in many countries. If you decide to go this route, you’ll need to consider visa requirements, how to access and pay for health care services, as well as a variety of other factors that can complicate your moving plans.
Tip 2: Consider your future needs and lifestyle.
As with any move, you’ll need to determine if this new location will accommodate your needs and desired lifestyle. Do you want to live close to family, or are you looking for something more remote? Do you want to work part-time, volunteer or focus on your hobbies? Thinking about how you want to spend your time in retirement is critical. In partnership with Age Wave, a thought leader on aging and longevity, a recent study indicated that more than a quarter of retirees reported that they struggled to transition from work to retirement. If you haven’t considered how you’ll spend your free time in retirement, now is the time to do so.
Not only should you consider your future short-term needs, but you’ll also want to weigh your long-term needs as these will change with age. Will your new location have convenient access to health care facilities? Will you be able to age in place with the support of family and friends nearby, or will you need to move to an assisted living facility? Your answers to these questions can help determine if your desired location will suit you in the long term.
Tip 3: Research the cost of living in your new location.
One of the largest expenses in your budget may depend on the type of housing you choose. Upfront costs can look very different if you choose to live in a retirement community, a condo/apartment or a single-family home. Ongoing costs such as maintenance and HOAs can vary significantly depending on your choice. If you’re moving to a location prone to natural disasters (hurricanes, fires, flooding, etc.), home insurance will likely cost more or may not even be available to you. In this case, you’ll need to have a plan if your house incurs severe damages.
Taxes can also vary, sometimes significantly, depending on location. Real estate, sales, income and estate taxes are all important to compare with your tax professional. Keep in mind that some states tax certain investments and retirement income, such as Social Security and pension benefits, differently.
It’s also important to compare other costs that make up a large part of your budget such as food, utilities, health care and transportation. Even sometimes smaller expenses like gas, which can vary greatly from state to state, can add up quickly, especially if you plan on using a car as your main mode of transportation.
Tip 4: Discuss your plans with your financial advisor.
After doing your research, share what you’ve found with your financial advisor and factor it into your plan. This could include partnering with your financial advisor and estate professional to determine if your estate strategy needs to be adjusted or how you’ll continue to communicate long-distance to help ensure you’re on track with your goals.