Should You Consider Moving in Retirement?

Some retirees believe they can extend their retirement by six to eight years by moving. But there are a lot of things to consider before doing so.

It is common for seniors who want to stay in their hometown to trade in their large home for a smaller, less expensive one. Most retirees enjoy living in familiar surroundings and having family and friends nearby, but hate spending time and money maintaining a large home.

Downsizing is a popular choice because it is more likely to fit with lifestyle goals. Many retirees feel that the money generated by downsizing could be better spent in retirement. While downsizing to a smaller home in or near their hometown remains the most common option for seniors, some retirees are deciding to move to other states or even countries.

Should You Consider Moving Out of State?

Moving to another state makes sense for some retirees in several ways. For one, moving to a state with a lower cost of living, low or no income taxes and lower medical costs can free up tens of thousands of dollars. These savings could provide additional sources of income in retirement or cover medical expenses or long-term care insurance.

Additionally, seniors who move from areas with harsh winters often find that they become more active and healthier. In many states, such as Arizona and Florida, seniors can golf, swim, bike and play tennis nearly year-round. However, moving is a physically and emotionally demanding event, even when you’re young. For those over 50, it can be even more so. Before you move, it’s a good idea to do your research first and understand your reasons for moving and what you want to accomplish.

Here are some questions to ask:

1. What are my real reasons for moving?

2. What kind of life do I want after work, and will changing my workplace help me achieve it?

3. If I move, will my retirement improve significantly?

4. Have I carefully studied my area for moving?

5. Do I know that I will have the same or better access to medical care?

6. Will it be a problem that my children and grandchildren are not nearby?

7. Will it be easy for me to make new friends and rebuild my social circle?

8. Is the money I will save worth the stress of moving?

9. Will I be able to “age in place” or will I likely need help with daily tasks?

10. What impact will my move have on other family members?

It’s a good idea to meet with your family members and discuss your intentions. Ask for feedback from those close to you and seek advice from those you know who have already made a move. It’s also helpful to sit down with your financial advisor, accountant or insurance professional and get their feedback. Often, these professionals are aware of potential obstacles that you may not have considered.

For example, some states that don’t have an income tax compensate for this by imposing higher estate taxes. Or, the state you’re moving to may have weak estate protection laws, which can be problematic for estate planning.

In short, moving to another state or country can have a positive impact on your life after work. With proper planning and research, a move can mean extra money that you can use to make your retirement more comfortable and less stressful. You may be able to build a stronger emergency fund or pay for travel and leisure activities that you otherwise couldn’t afford. But you also need to be realistic about the potential downsides, like feeling cut off from family and friends or not having access to the same type of medical care you currently receive. Partnering with your trusted retirement planner can help you make a more informed choice and avoid making a move you’ll regret.

Bill Broich, originally from Idaho, is a member of Syndicated Columnists, a national organization committed to a completely transparent approach to money management.