Are you planning to move once you retire? Maybe you have a good base of friends where you live now, but your children have moved away. Should you move closer to our children (and grandchildren)? If so, what are some financial considerations to keep in mind?
Consideration #1: Cost of Living
Do a cost-comparison between where you live now and the area in which you’re considering moving to. What are real estate prices like? It is not unusual to see a 10%-20% difference in cost of living when moving from one town or city to another.
Determining your updated monthly expenses is a crucial step as well. Will health care and insurance expenses increase or decrease? Check out local restaurants, grocery stores, shops and any other daily expenses that will impact your budget. Below are three potential retirement destinations that feature lower costs of living than most.
Great places to consider retiring to on a budget:
- Winston-Salem, North Carolina
- Wine country can be expensive in Napa Valley. Enjoying locally produced wines at a much more reasonable cost is made possible in the Yadkin Valley.
- Lakeland, Florida
- Waterfront property is no longer out of reach if you consider retiring inland. Located within an hour of Orlando and Tampa, this community features far less expensive housing in addition to 38 local lakes.
- Myrtle Beach, South Carolina
- The reasonable cost of living makes it possible for retirees to live here year-round. Though more touristy than the first two locations, you will never run out of activities in this affordable beach town.
Consideration #2: Housing
One of the biggest considerations you’ll need to make is what your living situation will look like. Will your child move you into an in-law suite? Or do you need to weigh the pros and cons of renting versus buying a home? When you’re looking for housing, you’ll also want to consider functionality. Will you be hosting celebrations and holiday dinners in your home, or do you primarily plan on spending time over at your child’s place? If so, then you may find it best to downsize to a condo or apartment.
If you want to be able to have grandchildren sleepover, host Thanksgiving dinner and entertain friends and family, then you’ll want to look for a piece of property that can accommodate your needs. Housing markets vary drastically across the United States. If necessary, consider evaluating the housing market in nearby towns if the first location you picked is not feasible.
Consideration #3: State and Local Taxes
If you’re considering staying in-state, checking into your state and local taxes may not be a top priority. If you are looking to move out of your current state, be sure to evaluate what your updated taxes will look like. In addition, you’ll want to look into other tax obligations including sales, property and estate taxes. When you are evaluating prospective housing markets, be sure to seek out the tax incentives or penalties to living in such a place. These will vary greatly across the United States as well.
If you’re struggling to determine whether or not you should move, or if your budget will allow for it, you’ll want to speak with your financial advisor. Together, you can determine the best decisions for living comfortably in retirement.
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.