Are you considering relocating in retirement? You’re not alone. Did you know that 40% of workers today plan to move to a different city or region after they retire?1 This underscores a trend of retirees looking for the best places to retire based on lifestyle, affordability, and access to care.
However, the decision to relocate during retirement shouldn’t be made lightly. There are a host of questions that need to be answered to ensure the move will align with your retirement income strategy, lifestyle goals, and long-term financial plan.
1. What is the cost of living in the new location?
The cost of living varies greatly across different regions. When comparing the cost of living in retirement, evaluate housing, groceries, utilities, transportation, and healthcare expenses.
Whether you plan to rent or buy, it’s essential to analyze housing costs in the new location. Use online cost-of-living calculators and local market data to compare cities side-by-side. Does buying a home make sense at this stage of life, or would renting be a more flexible and cost-effective option?
2. Should I Downsize?
The nest may feel empty once the kids have moved out. Even if you’re inclined to stay close to your community, downsizing and moving to a smaller home that can increase accessibility and comfort while reducing upkeep and expenses may be an attractive option, especially if the new place is close to family, friends, and recreation.
Downsizing in retirement can also free up home equity, which may support your broader retirement income plan.
Many cities offer retirement communities providing amenities, services, and opportunities to socialize with new friends, build community and increase your quality of life. Especially for retirees who may be aging alone, such communities can help reduce isolation and expand your circle of friends.
3. What are the tax implications?
Taxes can take a big chunk out of your retirement income. Consider the state’s income tax, property tax, and sales tax. Some of the most tax-friendly states for retirees offer exemptions on Social Security or retirement income.
Research whether your new state taxes pensions, IRAs, or 401(k) withdrawals, as this can significantly impact your net income.
4. What are the healthcare costs?
Factor in the cost of health insurance, routine care, and specialist treatment in the new location. Healthcare costs in retirement are one of the largest expenses retirees face.
According to one study, South Dakota topped the list of states with the most expensive health care, while Michigan is the cheapest.
5. How accessible is quality healthcare?
As we age, access to healthcare becomes paramount. Does your proposed new location have good hospitals? Are there specialists in areas relevant to your health needs?
Look for proximity to major healthcare systems, top-rated hospitals, and specialists. Access can matter as much as cost.
6. Is the climate suitable?
Some retirees are drawn to warmer climates, while others prefer cooler ones. Consider whether the climate in your potential new home will support your preferred activities and overall health.
7. Does the area suit your lifestyle?
At the end of the day, one of the key goals of retirement is quality of life. List your goals to determine what amenities different locations provide.
If your goals include culture, a vibrant urban arts community might suit you. Outdoors-oriented retirees might prioritize access to golf courses, parks, and walking trails.
Think in terms of “lifestyle alignment”—does this location support how you want to spend your time daily?
Retirement is a time to pursue hobbies and interests. Research what activities are available in the area and whether there are community groups or organizations where you could meet new friends.
8. How close will you be to family and friends?
Being near loved ones is often a significant consideration for retirees. If moving away, think about the ease and affordability of travel back to see them.
Proximity to your support network can influence both emotional well-being and potential caregiving needs later in retirement.
9. What are the transportation options?
If you plan to rely less on driving, consider a location with good public transportation, reliable rideshare services, or community shuttle options.
Walkability scores and access to public transit are increasingly important factors when choosing where to retire.
Final Thoughts: Planning Your Retirement Relocation
Making the decision to relocate in retirement is a significant step. By asking these questions, you’ll be better prepared to find a location that aligns with your financial goals and lifestyle preferences.
If you’re evaluating where to retire or how a move may impact your financial plan, working with an Emerj360 Financial Professional can help you assess trade-offs and build a strategy tailored to your goals. Schedule a meeting to explore how relocation fits into your broader retirement plan.
[1] AARP, “Where We Live, Where We Age: Trends in Home and Community Preferences,” 2021. https://www.aarp.org/research/topics/community/info-2021/2021-home-community-preferences.html
[2] Ibid.
[3] Forbes, “How Much Should You Save For Retirement?” 2022. https://www.forbes.com/advisor/retirement/how-much-to-save-for-retirement/
[4] International Living, “How Much Money Do You Need to Retire in Mexico in 2022?” 2022.
[5] The Motley Fool. (2023, February 20). 40% of Workers Plan to Relocate in Retirement: Should You?. Retrieved from https://www.fool.com/retirement/2023/02/20/40-of-workers-plan-to-relocate-in-retirement-shoul/. Accessed 10 July 2023.
