Have you thought about where will you live when you retire? I am sure when you are busy with your life, career, kids, vacations, and holidays the everyday day routine keeps your mind away from these thoughts. But when you are getting closer to retirement you may realize that you need to plan for your next phase of life.
Many baby boomers will downsize, sell their homes, and move to a sunny state. But some of us will prefer to retire in place. The reason behind this decision that people love their homes and their communities where they often lived for several decades and feel comfortable to retire there. Even they decide to move it will be not far from their current location. According to the surveys many baby boomers prefer to live closer to kids, family, and friends than to relocate to a warmer climate.
There are a few options for baby boomers to decide on where to live when they retire:
- Retire in place
- Relocate closer to kids, family, or friends
- Relocate to a warmer climate (from New England cold winters)
- Move and live abroad
Retire in place.
There are more and more retirees planning on retiring in place instead of relocating. I have read that this trend has become extremely popular in recent years. The baby boomer’s generation is more active and engaged in life and activities than the previous ones. Internet and technology make it easier to keep in touch with the kids, family, friends, and the whole world.
Wider variety of services such as home meal delivery, house cleaning, personal care assistance, paid caregivers and pet care make it easier for seniors to live in their homes independently. This trend is also driven by the growing cost of retirement communities and assisted living facilities.
Deciding on how to retire in place can come with its own challenges. If you want to stay in your own home for the next several decades you will need to make it age friendly. Most of the homes we live in today are not equipped for old age. We need to have fewer stairs and more accessible features in our homes with easy maintenance.
When you grow old you might consider doing some renovations to make your home more accessible:
- No-step entry into the home
- Grab bars installed in bathrooms and showers
- Walk-in shower instead of a traditional bathtub
- No-slip flooring to prevent slips and falls
- Lower kitchen cabinets for easy access
- Raised washer and dryer with adjustable height counter
- Electric stairlift
- Low maintenance yard, and more
While you might not be able to live independently in your home forever, these changes will help to make your home a safer and more functional place. Some changes could be simple modifications while others are big renovation projects.
According to the Home Advisors, the average cost of remodeling for disability accommodation can range from $5,000 to $20,000.
Move and live closer to kids and/or family.
When planning on where to live in retirement, the first choice for many people is to live closer to their kids. According to the surveys, wanting to be closer to a family is one of the most popular reasons for baby boomers to relocate rather than a warmer climate. If you need to relocate to another state or town it might take some planning.
Moving can be expensive in terms of money and time spent. You need to consider many factors when planning for relocation:
- Housing cost
- Relocation cost
- Access to health care facilities
Housing cost is one of the highest retirement expenses.
When you retire you do not need a big house because your kids are grown and live on their own. A bigger home is more expensive, and it is harder to maintain physically. That is why many baby boomers prefer to downsize either by moving to a smaller home or spending less for a home of equal size. It helps to save money on housing and maintenance costs.
Are you planning to buy a new home or prefer to rent while relocating?
If you are planning on buying a new home, you need to think about mortgage financing. What that means you will be carrying mortgage debt well into retirement while you start living on the fixed income.
Besides making a financial decision, you need to think about how it will fit into your retirement lifestyle. If you love to own your place you will have to deal with yard work, leaky faucets, broken A/C, or a water heater.
Renting is an attractive retirement option. Most retirees do not want to deal with maintenance and prefer a maintenance guy or a landlord to solve their problems. In addition to that, some rental apartment buildings have many amenities like swimming pools, gyms, saunas, and entertainment rooms.
Renting is also popular if you want to live closer to your kids but not sure you are ready to spend the rest of your life at that location. If you like to travel, renting has another advantage. You can lock the door and go away without worrying about the yard, home maintenance, or any other things you need to deal with as an owner.
Once you decided to move out of your home you will face the relocation cost. And if you will hire professional movers it will cost you a lot.
Most people feel overwhelmed by the idea of selling home. But moving out adds more anxiety to the whole process. Imagine that you have to take all your possessions, all your memories, and lifestyle you have created over the years and pack it in the boxes. In addition to emotional departure moving out will come with extra expenses.
First, you need to decide what to do with all your belongings – what to keep and what to sell. Next, you need to pack, figure out logistics, and hire movers.
The average moving costs depend on your local area. Usually, local movers charge by an hour. In the Metro Boston area where we live to hire professional movers is expensive. When we decide to move out it will cost us $119 per hour for 2 movers and truck.
According to the American Moving and Storage Association, the average cost of a move is $2,300 within your state and $4,300 between states. But an interstate move could be as high as $7,500 and depends on the amount of stuff you are moving, moving services, and the distance between your old and new homes.
When you think about relocation in retirement, access to good healthcare is a must. At the beginning of your retirement, you probably will be active and healthy and need only routine doctor visits. But as you grow older the access to retirement facilities, hospitals, and transportation for people with disabilities will become a necessity of life.
Relocate to a warmer climate in retirement.
When it comes to relocating, many baby boomers are searching for places with a lower cost of living. Others want a warm climate and beautiful scenery.
If you have lived in areas with cold climate and lots of snow you might want to relocate to a southern state with a warmer climate. If you like fishing and boating, you would prefer to relocate to a place near the river or lake. Finding a perfect retirement spot near the mountains will fit the lifestyle of many people who like to hike.
Taking climate into consideration is important if you want to stay active and involved in things you love to do.
According to statistics, Florida, Arizona, and South Carolina are the three states which see the largest arrival of retirees if you are looking for a warmer climate. Florida takes number one on the list because the Sunshine State has a perfect mixture of beautiful beaches, sunny weather, and low taxes.
When choosing where to relocate make sure to understand how new location and accommodations will fit into your retirement lifestyle. Because there is a difference between a place you loved while vacationing there and a place you will be living for a long time.
Move and live abroad in retirement.
Retiring outside of the US is becoming a popular option among baby boomers. Moving abroad may be emotionally and physically difficult, but it can offer an exciting adventure in your golden years. Some of us are dreaming about exploring the rich culture, food, and lifestyle of other countries rather than playing golf or lying on the beach.
However, moving abroad is not only about packing your bags and buying a plane ticket. It is more complicated and needs serious planning.
First, think about how you will receive Social Security benefits. Then, how to withdraw money from your retirement funds if you move outside of the US. Another question is how to pay taxes and what to do with your belongings in the US?
There are other things to consider if you decide to move to a new country. You will need to get a residency visa, open new bank accounts, figure out how to transfer money from the US to your new place. Do not forget to look at the currency exchange rates and see if you will be losing money on the exchange.
Access to good quality healthcare is a must as you get older. So, make sure that your new country has modern medical facilities, well-trained doctors and it must be affordable. Find out if you can join the national healthcare program or need to buy private medical insurance.
One of the most important factors is affordability. When choosing a retirement destination, it is important to move to a country where the cost of living is low enough so you can stretch your retirement savings.
It is hard to imagine that many baby boomers can afford to retire in Italy, France, or Switzerland. These countries may be the most desired to retire to, but they are not cheap. Countries such as Ecuador, Panama, Mexico, and Costa Rica offer low cost of living, solid healthcare, and public transportation system together with established expat communities.
Retiring abroad is not easy and it is not for everyone. But worth the efforts if you find the right place to move. You can live a more pleasant and comfortable lifestyle at a fraction of the price than retiring in the US.
Putting It All Together
If you are getting closer to retirement you might already have an idea how and where you want to spend your days. But deciding on where you want to live for the next 20 or more years requires an open discussion with your partner.
There are many important considerations and questions to ask yourselves. Buying a nice condo by the water or on a golf course may fit many baby boomer’s retirement lifestyles. Others, like me, would prefer to sell the house, cash out, and spend money on traveling the world.
What about you? What are your plans for retirement? Where do you want to live when you retire?
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