"Looking Before You Leap" When Relocating
If you've settled on the decision of relocating during retirement, it is important to take the step of "looking before you leap." By looking before you leap, we mean to give yourself enough time to thoroughly evaluate all the possible facets of this move, so that you're not greeted by any unexpected surprises when you actually make the transition.
Although many believe that a move of this nature is just a change of address, there are several implications attached to this decision. The sooner you plan on what you will be doing when you retire, the easier it is to begin mentally preparing yourself for that path. The more headway you give yourself, the better! Ask yourself questions, such as: What do you hope to gain from the move? How are you looking to spend your free time? Where do you see yourself five years after the move?
Once you have decided why you are moving, there are certain aspects that need thorough consideration. Today, we will speak to three: Hidden Costs, Employment Opportunities, and Home Size.
What are the hidden costs?
The desire for a more luxurious lifestyle during your golden years is not uncommon among retirees. After all, you deserve a comfortable lifestyle after the hard work you have put into earning it! However, acting on this intuition to splurge can be a serious mistake. It is not uncommon for retirees to outlive their savings, which creates for a stressful situation during a time that should be filled with enjoyment. Make sure you have a financial plan in place, as it's going to be a crucial piece of a lengthy retirement.
Some retirees choose low-income taxes and downsizing over luxury. This group moves to states like South Dakota, Texas, Florida, Alaska, Washington, Wyoming and other places that offer far more favorable tax situations than their counterparts in the Northeast. Some states boast zero income tax but secretly make up for it in property and sales taxation. Moreover, if you spend even half the year in a zone that applies income-tax rules, you will have to pay your share of tax on your retirement earnings. In light of this, paying closer attention to tax laws is necessary when you decide to move.
Are there any employment opportunities?
If you are moving closer to family, a good portion of your time is bound to be consumed by your grandchildren. But what of the hours when they are at school? You definitely need to keep your body and mind active, and finding full time work, part time work, or volunteer opportunities are a great way to do so.
A recent survey conducted by the Center for a Secure Retirement identified that most baby boomers do not like to sit idle. Aside from additional income, the benefits of staying active are abundant.
The size of your new home
Relocating for retirement is one of life's rare opportunities to downsize without too much disruption. With kids out of the house, and only room needed for you and potentially your spouse, this is a great time to move into a smaller, less expensive abode. Aside from obvious costs like mortgages and taxes, hidden costs like home maintenance can creep up if you choose to stay in a large home.
Overall, there are many steps you can take to increase the odds of a smooth, successful move. Proper planning early can help for a lengthy, joyous retirement!