Once you retire, you're free to head to the beach or golf course. In some cases, you can even dramatically reduce your cost of living or improve your quality of life with a single move. But you want to make sure that a retirement spot will continue to meet your needs as you age. Here are 10 tips for finding your ideal retirement spot:
Seek lower costs. If you can sell your house in an expensive city and move to a place where housing costs significantly less, you can use that influx of cash to help fund your retirement years. "If the cost of living is lower, it can certainly let your retirement nest egg last a little longer," says Scott Cole, a certified financial planner for Cole Financial Planning in Birmingham, Ala. "We do see people who had a lot of their investments tied up in their house, and they were able to liquidate that house, net a significant gain and then come and buy a pretty similar house, if not much nicer house, here [in Alabama], and then use the rest of that money for retirement income." However, there are significant transaction costs when you buy and sell a home and the move itself may also come with a variety of expenses, so make sure you factor that into your relocation calculations.
Look for great amenities. Think about how you want to spend your retirement years, and make sure your retirement spot has the resources to allow you to do that. Look for golf courses, pools, fitness centers, parks or other amenities you would like to use. "If you want to be pursuing your education, you might be looking for a college or other learning venues," says Mary Languirand, author of "How to Age in Place: Planning for a Happy, Independent, and Financially Secure Retirement." "If there are travel options you want to pursue, you are going to need to be near an airport or a train station."
Health care options are essential. Make sure any community you are considering has adequate medical facilities and doctors that are taking on new patients. If you have any ongoing medical condition, or propensity for a specific illness runs in your family, it can be useful to retire near medical professionals who specialize in treating it.
Calculate the tax impact. Taxes vary considerably by state, and you can often reduce your costs considerably by moving to a low-tax place. Take a look at how the state taxes pensions, Social Security and earned income, and also consider the sales tax, property tax and any special tax perks available for senior citizens. It's also important to realize that taxes pay for services, and there may be less help available to senior citizens in low-tax areas. "There are some services for senior citizens that might actually be better met in a higher-cost community," Languirand says. "In rural areas, it is not unusual to have no public transportation or the special transportation services that people with lower mobility require."
Aim for proximity to family and friends. Many people want to retire near their children and grandchildren. Family and friends can enrich your life in retirement and provide significant (and often free) help when you need it most. "If somebody has lived in the same place their whole life and that's where their social network is and where the people they depend on are, then it's much harder to pick up and build a new network of support where you don't know anybody and you have to start from scratch," says Cynthia Conger, president of Conger Wealth Management in Little Rock, Ark. "Rather than being able to depend upon a support network of people you know, you might now have to pay for services that might have been done by people who were friends. You might end up paying more." If you do move to a new community away from your support system, you will need to create a new circle of friends. "An activity like golf or bridge will get [you] into another social network," Conger says.