While Americans have always been a mobile people, retirees aren’t moving to new places as frequently as they have in the past. According to census data, between 2010 and 2011, just 3% of those age 65 and older relocated. A lot of 401(k)s have taken a hit, the housing market fell, and many of those who planned to retire are delaying that move. This has resulted in the lowest level of migration for those 65 and older since the end of World War II.
But not everyone is staying put: Some senior citizens continue to seek retirement spots with better weather, more affordable housing, and activities that match their interests. If that sounds like you, here are several factors to consider in deciding where you want to retire.
Selling your home and moving to a place with significantly lower housing costs could give your retirement balances a significant boost. If you own a home in New York or California for example, you can cash out of that home and use a portion of those funds to move to a more affordable destination. You might consider vacationing for a week or better during different seasons anywhere you’re considering retiring. Then, look at renting or leasing a place for six months or a year to get comfortable with the area. This will help you make a more informed decision regarding the precise location that best suits your needs and interests. When calculating your retirement housing budget, be sure to include expenses like property taxes, homeowner’s insurance, any homeowner’s association fees, and all utility bills.
While most folks would prefer to pick their retirement destination based on the weather or available activities, it is wise to consider the overall tax burden of your future home. While your federal tax obligation will largely be unchanged regardless of which state you retire in, the absence of a state income tax is a significant factor in choosing a location. Seven states – Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming – have no state income tax. But be aware that higher sales and property taxes can more than offset the lack of a state income tax. Other key factors to consider when comparing states as possible retirement locations include:
- Taxes on retirement plan distributions
- Taxes on Social Security benefits
- Sales taxes
- Property tax
- Estate and inheritance tax
Proximity to Healthcare
Do you want to live close to your current healthcare providers, or are you willing to find new medical care? Remember that your healthcare needs are likely to increase as you age. Any retirement spot you are considering should have health and elder care facilities and doctors who specialize in taking care of older patients. If you retire to a country home in the middle of nature and develop health care problems later, it can be a burden to travel to needed healthcare facilities.
As we get older, we require the services of a number of medical specialists. Life will be easier if you live in a place where these specialists are fairly close by.
Recreation and Culture
Throughout much of your life, your job has dictated where you live. Retirement allows you the opportunity to select a location of your choosing, whether that means surrounding yourself with golf courses, museums, art galleries, water views, or biking and hiking trails. College towns also present interesting retirement possibilities because they have tremendous resources, including recreational facilities and cultural opportunities (such as concerts and lecture series).
Job or Volunteer Opportunities
A part-time job or second career is increasingly becoming part of the retirement years. If you plan to continue working, you should examine the outlook for the types of industries that exist in the areas you’re considering. You might think about investigating the local job market while visiting a possible retirement destination. Many retirees also pursue volunteer work for the community and social benefits.
Many retirees reach a point where they no longer can or want to drive a car. Therefore, consider whether the locale has a public transportation system or affordable alternatives such as taxi or van services for seniors. Ask yourself how easily you would be able to get to your daily activities if you were no longer able to drive.
In deciding on a retirement destination, it makes sense to give all these factors some consideration. Ignore any social pressure from family or friends and think about what will work for you.
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