Where to Live in Retirement: Much More than a Financial Decision

Much of what is written about retirement focuses on the financial and investing aspect. While income security is critical to get right, it is certainly not the only thing you need to think about as you approach retirement. Here are a few common considerations both clients and the media have asked us about transitioning to the retirement life and deciding where to spend it.

Does moving to a tax-free state really save money?

It can, but not always. Taxes are just one aspect that needs to be considered before moving to a new state in retirement. We typically recommend renting for a few weeks or months so you can be certain the new area suits your lifestyle and financial situation.

• Tax Environment: Some states do not have income taxes, which is largely beneficial, however, may have other taxes or cost of living differences that need to be accounted for.
• Cost of Living Differences: Some states cost much less for regular living expenses such as home costs, taxes, and insurance.
• Healthcare: Another key consideration for retirees is healthcare. If you move to a state for retirement where the tax rate is lower, but healthcare is inconvenient or more expensive, life is going to be harder as you age and need more care.
• The location of family and friends is not a strictly financial factor, but certainly an important one. Also keep in mind any travel costs if you plan on moving farther away from your support group.
•  Here are a few resources on comparing the cost of living across state lines: 
1. General cost of living
2. State and local income tax

 Concierge life or DIY?

If you plan on downsizing to an apartment, a major part of the appeal is no longer having to deal with many aspects of maintaining a larger home. You may also be able to save on gym/tennis memberships, office space or other apartment amenities that you no longer have to pay for separately.

What to do with extra furniture/ home décor?

The kids are grown and you’re thinking of moving to a house or apartment with less upkeep—but what are you going to do with furniture that won’t fit in your new place? You can offer children or family members first pick, but you could still be left with some items in need of a home.

In fact, there are movers who specialize in downsizing. In addition to simply moving items from one place to another, they assist with organizing before and after your move, and can help to sell or donate things you no longer need.

Weighing your options

Of course, many of these decisions do have a financial aspect too. Halpern Financial can help you run the numbers to make an informed decision—for example, when deciding to buy into a retirement/age-in-place community, there may be certain breakpoints where one option starts to be more financially appealing than another. We are well-versed in helping clients navigate from one phase of life to another, from starting a family to retirement and an ongoing legacy.