Where to Live in Retirement - Part I: Considerations

This is the first post in a two-part series on the considerations of where to live through your retirement years.

During our working careers we are often tied to one location. Although there is a growing trend for remote positions, many of us are forced to go where employment leads us. If you have children, settling in one place becomes more of a priority for schooling purposes. However, once you’ve retired and the kids have moved on, you are free to roam! The question is: do you want to?

In today’s connected society, it’s a lot easier to stay in touch with loved ones and friends from afar. Technology gives you the flexibility to move somewhere else without losing touch with the people you hold most dear. On the other end, we often see retirees moving to be closer to children and/or grandchildren. The decision is unique to you and your specific situation!

In part I of this two-part series, I’ll examine some important considerations when thinking about where to spend your retirement years.

  1. Cost of Living – Coming from a financial adviser, it’s no surprise that this is my first consideration. After all, the money you spend in retirement is directly correlated to the years that you can stay retired and the lifestyle you can afford. There are a lot of factors that go into the calculation of cost of living: home or rent prices, retiree taxes (which we’ll dive into next), and everyday items such as gas, groceries, etc. Make sure when looking for a home base, you’re taking into consideration the overall cost of living relative to your current location.
  2. Taxes –Taxes vary greatly between states and the variance further depends on your living situation and income sources. For example, some states have zero income tax, but in lieu of income tax have high property or sales tax. Other states don’t tax social security or IRA withdrawals. If you have a state pension, your pension income might not be taxable in that state, making an out-of-state move harmful to your bottom line. Finally, there are a handful of states that have other tax benefits for retirees such as limiting the tax on investment income. These are all considerations to explore with your financial advisor and CPA.
  3. Access to health care facilities – As you age, the likelihood of having medical appointments increases significantly. You may want to consider proximity medical care facilities, balanced with a location that meets the specifications of your health insurance (Medicare and Medicare supplement if you’re 65 or older). Before you make a permanent move, research the doctors and medical facilities in that area. Visit facilities ahead of time to make sure you are comfortable with their offices, medical professionals, and staff.
  4. Recreation and/or social network – Money isn’t everything, and one of the most important factors when deciding where to retire is making sure you find a location where you will enjoy living! In retirement, it is important to find meaningful activities that keep your mind engaged and body active. Make sure the location you are considering has like-minded people and activities that you enjoy, that meet your social preferences.
  5. Climate – Alaska is one of the lowest cost states to live in, but not many are willing to deal with the harsh climate and remote location. This is why Florida is such a popular retiree and snowbird state because of the mild winters and warm temps year-round. Make sure you’re comfortable with the year-round climate before committing to a location.

Before you decide on a location and make decisions regarding purchasing property, consider moving and renting for a year to make sure you like the area. This will give you the opportunity to learn the city, the neighborhoods you like, and the location that would be ideal for you and your family. Staying for a year will also allow you to experience the climate for a full year, to make sure you’re comfortable during all the seasons. You may decide that you don’t like the location after all!

At Pathfinder Wealth Consulting we believe there is more to being retirement-ready than just the numbers, and part of our comprehensive retirement planning is addressing all considerations, including your goals of where to live throughout your retirement years. If you are ready to dive deeper into your financial plan and take a comprehensive look at navigating the path to an intentional retirement, we encourage you to give us a call at 910-793-0616 for more information.