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.
Consider the political, religious and social climate. Some people want to retire in a community of like-minded individuals. There are retirement communities that cater to artists, RV owners and people of various ethnic heritages. "You need to understand the politics of the state and whether you can cope with that," Cole says. "You want to think about the politics and whether it is in line with who you are. You don't want to spend your last years constantly irritated and agitated." Of course, if you like to engage in lively debate about politics and religion, you might want to seek out a more diverse community.
Job opportunities. Americans are increasingly planning to work during the traditional retirement years. If a retirement career is part of your plan, you may want to line up a job opportunity before you make a move. "A place that will enable you to do what you want to do with your post-retirement work career is very important," Languirand says. "Some people have very portable skills where they could practice anywhere, while some people are more place-dependent."
Transportation options. Many seniors reach a point when they can't or no longer want to drive. Some cities have public transportation systems that give discounts or are even free for senior citizens, or low-cost van or cab services that will help seniors get to doctor's appointments. "If you move away from family and you are in a place where there is not much of a public transportation infrastructure, you are going to have to find a way to meet basic needs, your grocery shopping," says John Eaton, a certified financial planner for Cypress Wealth Advisors in San Antonio.
Better weather. Some people seek retirement spots with warm weather so they can avoid winter, but you might find that you miss the change of seasons or that warm weather comes with its own challenges. "Professionals come down here and they just can't take this heat," Eaton says about San Antonio. "It's hot, and if you are somebody who is used to seasons, it might not suit you."
Test it out first. One way to be more certain that a retirement spot will be a good fit is to test it out by renting for a few months or even a year before buying. "When you first move to a place, it might seem wonderful, but once you have tried living in it, you might find that it doesn't really suit your needs," Languirand says. "There's nothing like actually living in a place to know all its little eccentricities and ins and outs."