You’ve probably thought about moving to a new region, or maybe even another country. In fact, according to Bankrate.com, 60% of all people between the ages of 50 and 65 consider such a move likely, with most of those eyeing a new home that’s more than 100 miles away.
Where to go, why to go
When you think of your dream home, you probably fantasize about your favorite vacation spot. But when it comes to moving, and with everything you need to consider about the cost of living, local taxes, healthcare, safety and accessibility, while nostalgia may play a role, it really shouldn’t be the deciding factor in such an important change.
With that in mind, here are three things to consider before relocating to another region.
Before you move, you need to do some serious research with your financial advisor about state income tax, property tax and local sales tax rates. You want to be able to live off the income of your investments, not the principal.
In some states, the cost of living varies dramatically even from city to city. Will you need to downsize, and is that okay?
Living in an expensive state like Hawaii can cost you tens of thousands more each year than a place like Florida. Views and beaches are wonderful perks of retirement. Just make sure you can afford it over the long haul.
You may not want to think about this, but you should.
If a relocation is likely permanent, then you’re going to have to think about how you’ll get around 15 or 20 years from now when your health might not be as good as it is today. Buses, shuttles, subways. These things are barely on your radar when you’re healthy, but the older you get the more important public transportation becomes.
Don’t move someplace—a beach town or a distant suburb—only to become isolated if you’re widowed or can no longer drive or walk very far.
After the age of 65, Bankrate.com’s numbers also show the number of people who plan to relocate drops to 20%. Here’s why: You’re settled, you have deep roots, and you have your geography wired (family, friends, healthcare, clubs, etc.).
The fantasy of moving to Maui is wonderful but living someplace isn’t at all like visiting. The grind and hassles that were invisible to you as a tourist are suddenly front and center.
A great compromise might be to just extend your visits to your favorite locations, even for a month or three. If after three months in Hawaii you still feel the pull to live there, it might be time to talk to your advisor about what you need to do to make it happen.
The Simply Money Point
Make sure you don’t let your excitement for a new adventure in retirement prod you into making a hasty decision. Always speak with a trusted financial advisor before making any big financial moves.
And to learn more about how to make a smooth transition into retirement, including getting answers to common questions about Social Security, taxes, and income needs, register to attend one of our last retirement planning workshops of 2018 during the week of October 22nd.