n“Should I consider relocating in retirement?” This is a question many retirees are asking themselves. Although many people choose to move to smaller homes or less expensive areas after retirement, an increasing number of older adults are aging in place. Just 3.6% of people born between 1931 and 1941 sell their homes when they reach age 67, whereas 11.6% of people born earlier gave up home ownership at age 67.
It can be hard for many people to leave a home where they may have lived for decades and raised their families. The comfort of familiar surroundings and the company of friends and neighbors you may have known for years can be difficult to leave behind. On the other hand, moving in retirement can be an exciting adventure, a chance for a fresh start, and may help you save on costs.
Others, however, decide keeping up a home and yard is more work than they want to do at this point in their lives. Downsizing or relocating can often be a good way to free up home equity for retirement funds and to save on maintenance costs, property taxes, and utilities. Many retirees also move in order to be closer to their children or other relatives or friends.
So, should you consider downsizing or relocating in retirement? This is a personal decision and only you can decide whether it’s right for you and your situation. Here are some things to consider.
Will You Enjoy Your New Home or Location?
Number one consideration is whether your new home and location will suit you. After decades of working, you naturally want to spend your golden years in a place you enjoy.
Don’t Automatically Pick Your Favorite Vacation Spot
Many retirees want to retire where their favorite vacation destination was when they were working. It seems to make sense – if you liked vacationing there, you should love living there, right?
You might find, though, that living in a place is very different from visiting there for one or two weeks a year.
Maybe you didn’t realize how cold the winters would be. Or maybe the resort town is deserted in the off-season, the shops are closed and there’s not much to do. Maybe you can’t find a place to live that’s close to all the attractions. Plus, when you’re on vacation, relaxed and being waited on, your mindset is different from when you’re dealing with the everyday tasks of life. “We tend to idealize places when we are catered to, are not working, are not cleaning or cooking,” says clinical psychologist Dr. Nancy Irwin.
This isn’t to say moving to your top vacation spot is necessarily a bad choice. We’re just suggesting to consider all angles before making a leap. Maybe take several brief trips there, in the spring, summer, and winter, to see what it’s like. And look at trends: will the area still be prospering in 10 or 20 years, or is it dwindling in popularity?
Decide What’s Important to You
It’s a big country, with many choices of where to live. To narrow down the list, consider what’s most important to you in a retirement location. What type of lifestyle do you want in retirement? What type of activities, and amenities top your list? For example,
- Do you prefer a big city, the suburbs, or a quiet countryside?
- Do you like the beach, mountains, or lakeside?
- Do you want to attend shows and concerts and visit art galleries and museums?
- Do you plan to do a lot of traveling? If so, you’ll want to be close to an airport or cruise terminal.
- Do you want to spend time with family and friends? Then you’ll want to choose a location where you can visit with them frequently.
- Do you want to take classes to further your education or for personal interest? Is there a college or university nearby?
- If you want to volunteer, are there lots of volunteer opportunities nearby?
- Do you want to work part-time? A strong economy with plentiful job opportunities might be important to you.
- Do you have a particular skill or hobby, such as gardening, woodworking, or target shooting? You’ll want a place you can pursue your interest, possibly alongside others who have the same interest.
- How’s the public transportation? At some point, many older adults decide they no longer want to drive.
Questions like these will help you pick possible retirement destinations. Community is also important. You’ll want to be surrounded by people who share your interests. If you’re religious, you’ll want a place where you can find a church home. Whether you’re liberal, conservative, or somewhere in between, you’ll likely want to be in a place where many others share your views.
Tradeoffs
Like most choices, picking a retirement location involves tradeoffs. The big city might have more amenities than a quiet suburb, but also be more expensive and have a higher crime rate. A place by the ocean might be a long distance from the nearest airport. A city with a world-class symphony orchestra might be farther away from your grandkids.
Resources to Help You Decide
You’ll have to decide for yourself what’s most important and what you are willing to compromise on. Here are some free, online tools that can suggest retirement locations based on a few criteria you select:
Zillow’s Find the Best Places to Retire. This site has dropdown lists for you to select a state, population, home price range, and other factors like access to entertainment, weather, and crime, and then displays 10 cities that meet your selections.
Where Should I Retire Quiz. This quiz asks you 11 questions about your needs and interests and then suggests retirement locations based on visitor bureau and chamber of commerce data.
MarketWatch’s Where’s the best place for me to retire? This site allows you to select desired weather, cultural amenities, cost of living, and population and gives you 10 suggested counties that match you selections.
Yourplacefinder offers a short, free quiz that suggests whether you might be happiest living in the countryside, a small town, a suburb, or a city.
Affordability
If you move, particularly to another state, your expenses may be quite different from what they are now. Income and property tax rates, housing prices, and food, gas, dining out, and other expenses could be higher or lower than where you presently live. You’ll want to factor these costs into your retirement budget. If your dream retirement location is out of reach, you’ll need to find another area that offers similar amenities at a lower cost.
But cost is just one factor. Moving to the least expensive area might save you money but you might not enjoy living there. You’ll need to find a place that meets as many of your criteria as possible.
Bankrate and Forbes offer free online cost of living comparison calculators so you can compare expenses between different locations. You can compare where you are now to where you’re thinking of moving, or look at two potential retirement destinations you’re considering.
If you’re planning to sell your present home and purchase another one after moving, be sure to get an accurate estimate of your present home’s value. Websites like Realtor.com and Redfin can give you information. So can various major bank websites like Bank of America and Chase. Consider looking at several estimates to obtain a consensus, as different calculators rely on different data and formulas to give their answers.
Remember Healthcare
Healthcare is a major consideration for many retirees. Access to quality healthcare is crucial for many older adults and supports your quality of life. You may be in good health now, but at some point you might appreciate having ready access to physicians and medical centers. Living in a place that promotes good health and healthy lifestyles can also improve your longevity and lower healthcare expenses.
The County Health Rankings & Roadmaps tool allows you to search for a county, state, or ZIP code and shows health grades for that location.
Write It Down
When you’ve narrowed down to a few possible choices, make a written list of the pros and cons of each location. Include costs, proximity to family and healthcare, and other factors that are important to you. Seeing it all in one place on paper can help you decide.
You might also keep in mind that staying where you are might be the best choice. If so, include your present location as one of the choices and evaluate it together with other areas you’re looking at.
Sites like BestPlaces and AreaVibes enable you to compare two cities across numerous metrics like local amenities, crime rates, and cost of living. You can see how different destinations you’re consider match up and how they compare to where you live now.
You can also visit online forums and ask locals about the weather, cost of living, and amenities in each location. Questions that are specific in nature will be most helpful to you. For example, instead of asking “Is it expensive to live there?” you might ask, “How much do you pay for housing and groceries each month?” You’ll get a range of responses but they’ll give you a general idea.
Pay Each a Visit
If feasible, visit each location, if you’re not already familiar, to see what it’s like to live there. Don’t be a tourist; visit the grocery stores, theaters, and department stores. Check out the golf courses, libraries, museums, or whatever interests you, to see what they’re like. Attend a large public event and take a look at the people. Would you fit in? Would you find it easy to make friends? And if you know where you might live, visit that area in the evening and on weekends, as well as during the day.
Go With Your Gut
Ultimately, deciding where to live is an emotional decision. You can run the numbers on a spreadsheet, but your feelings about a place will dictate whether you’ll be happy there.
If making the leap to a totally new location seems intimidating, consider taking smaller steps. Visit each location for a week or longer and see what it’s like. You might consider renting first before you commit to buying a home.
Rent or Buy?
Speaking of renting, there’s always a choice between renting or buying a home in your new location. There are pros and cons to each, and the decision comes down to your personal preference and what’s best for your situation. Almost four-fifths of people aged 65 and over own their homes, the highest proportion of all age groups.
Advantages of Owning
One major advantage of owning your home is stability. When you own your home, you have fewer restrictions on decorations and modifications you can make to your living space. You don’t need a landlord’s permission to paint a wall or replace the carpeting. You also aren’t subject to changing economic conditions. If you’re a renter and the landlord decides to raise the rent or even sell the property, you might have to move out on relatively short notice. When you own your home, you don’t have these concerns.
Owning your home also gives you financial options. You can benefit from appreciation on the home’s value and use the funds to supplement your retirement income. You could also rent out a room or two, or unused storage space on your property, to bring in income.
Advantages of Renting
Renting your home likewise has certain advantages. You have more flexibility: if you move and then decide the location isn’t right for you, you just need to wait until your lease expires and move out. There’s no need to go through the process of selling your home. You also don’t have to worry about maintenance: if something breaks, you call the landlord. Home maintenance and repairs, pest control, replacing worn appliances, as well as property taxes and home insurance – they’re all up to the landlord.
About 20% of people aged 65 and up rent their homes. Owning and renting a home both have benefits. You’ll want to consider your financial situation and goals in retirement and decide which way is better suited for them.