Moving to Another State in Retirement? 7 Critical Things to Know Before You Make the Move!

Transcript:

Hey guys, Mike Frontera here back with another Retirement Theory Video!

So you’re thinking about retirement, and picturing yourself enjoying endless days at the beach or on the golf course! When you’re scraping the ice off your windshield to get to work, that sounds like paradise. Well, before you trade in your snow shovel for a sand shovel, there are some things that you really need to think about before making the big move.

Here in New York, it’s fair to say that relocating in retirement is a common consideration. In fact, I took a look through my own clients to see what percentage moved to another state. I was surprised to learn that 32% moved out of state in retirement.

Now out of those who have moved, the majority say they’re happier in their new location. There are however, a few who regret the change. Some decided to relocate again, while others actually moved back to their original location. So what can you do to ensure that your retirement move is the right one?

There are several critical components, which I call the Seven C’s of retirement relocating.

The first C is cost: How much will it cost you to live the lifestyle you want, where you want? Obviously taxes play an important role, but there is more than meets the eye there. Many states offer tax benefits to retirees both on income and property taxes. Even in a high-income tax state like New York for example, retirees receive tax breaks such as no tax on Social Security, or government pensions and a $20,000 annual tax exemption on IRA withdrawals. Couple that with enhanced property tax discounts, and you might be surprised that your tax burden is actually quite low.

Find out what your highest expense items tend to be. What do these same goods or services cost in the area that you plan to live? This can be drastically different, and you may even be surprised to learn that places with so called “low cost of living” may not be much lower for the specific expenses that you have.

Now the next is one you may have already thought of: Climate. Moving from an area with long, cold winters to one with more warmth and sunshine can really impact how much you enjoy the area. But be sure to research out both the good and the bad aspects of the climate you plan to live in. A location with mild winter temperatures, can also become a humid summer sauna for months on end, with risks of hurricanes. If you’re going to live somewhere year-round, it’s important to understand what to expect.

While you’re learning about your new potential location, be sure to pay attention to the next C, convenience. The rolling country-side, away from the hustle and bustle of city life may sound absolutely serene. But after a couple times of forgetting to pick up that loaf of bread, or realizing you need a different wrench at Home Depot, you might not be thrilled that it takes you 25 minutes to get back into town.

Other important considerations would be access to parks, public transportation, and airports. If you plan to have a lot of family and friends visit or you do a lot of traveling yourself, living close to an airport that offers a lot of direct flights is an important consideration. Look for a place that can check the box for you for the setting you desire, while also maintaining the convenience you need. A lot of this research can be easily done on the Internet.

The next C, on the other hand, may not be as easy to Google. That is, culture. Perhaps we don’t think about it too much, but what kind of vibe does a location have? What are the people like? People who live in the same area for generations on generations tend to adopt their own nuances, to where your daily experience in different areas of the country can vary quite widely. The pace of life in Savannah, GA, for example is far different than that in Boston, for example. The food in Arizona completely different from the food in New York City. And how about crime? How safe is the area you want to live? A lot of us are used to living in relatively low-crime areas and may not even think of crime as an important factor to research. Unfortunately there are many towns and cities, beautiful ones, in this country where crime is much more of a concern.

And that goes into the next C, Care. Specifically healthcare. Take time to research out the medical facilities in the area that you plan to live. Are there a variety of doctors and specialists nearby? Do they accept your insurance? Is it an area that attracts high quality medical professionals? How close would you be to a major hospital? Remember you’ll need to leave your primary physician. Is there sufficient opportunity to find another that you can trust?

Now speaking of trust, who do we trust more than our closest friends and family? With that you’ll want to think about the next C, companionship. I mentioned earlier that 32% of my clients ended up moving in retirement. Some of those moves were motivated by being closer to family. And a big portion of the 68% who haven’t moved, is because they don’t want to leave the friends and family that they have. You may have spent the majority of your lifetime where you live now, building friendships and raising your family. Will you be able to see your existing friends and family often enough to keep those connections strong? What opportunities will you have to make new friends and new connections? Think about not just the differences between cities, but even between neighborhoods. Ones that have many active and social retired people may be a better fit versus ones that have busy families with children.

With that, let’s consider the last C, contentment. What is it that makes you happy on a day-to-day basis? Would changing your location give you more or less opportunity to pursue your hobbies and passions? Perhaps you love to golf, or play pickleball, or quilt. Are there clubs, or networks that you can join where you can quickly fit into the social fabric of your new location?

Finally, if you’re excited about moving to a brand new place in retirement but you’re having some reservations, I’ll give you a bonus C – that is, Consider, renting. As I’ve mentioned in my previous video about buying versus renting, a good rule of thumb for buying is that you’ll really want to commit to 5 years at the least to make buying the better option. Renting a home for a year on the other hand, allows you to learn all about your new surroundings and see if you really want to make it your permanent home in retirement.

So, do you have questions for me? Let me know. Come visit me at www.retirementtheory.com or send me an email at mike@retirementtheory.com. Did you click subscribe on this video or follow me on Facebook? I think that you should. You’ll continue to see videos like these on everything retirement planning. Once again, thank you for joining me, we’ll see you next time.

Sources:

1. https://www.investopedia.com/articles/retirement/020117/most-popular-states-retire-us.asp

Clips:

1. “Fargo” Jerry Scraping Windshield: https://www.youtube.com/watch?v=RM2N1w6t1KM

2. “Welcome Back Kotter” Theme: https://www.youtube.com/watch?v=Mmm3KTa601s&t=10s

3. Florida Georgia Line “I Love My Country”: https://www.youtube.com/watch?v=sF0DV0MsYrQ

4. “Good Will Hunting” How You Like Me Now: https://www.youtube.com/watch?v=LMD2vUErcYU