senior living

Is Relocating in Retirement a Good Idea?

houses next to mountains-relocating in retirement

According to studies, 36 % of those 50 and older want to stay in their current home when they retire. Yet almost 37% of retirees have moved since retiring. And 27% expect to move at some point.

What is right for you depends on your lifestyle, financial resources, and personal preferences on climate, activities, and proximity to friends and family.

If you have just retired or are a few years from retirement, you may be thinking ‘Where should I live in retirement?”

Sometimes there are good reasons to relocate in retirement.

You want to be closer to your family.

For many people, there is a good reason to move in retirement because they want to be closer to family or friends.

Right now you may have no real plans to go anywhere. But if your adult children are planning to move away, you do not have to feel stuck when your family no longer lives near you.

Some retirees prefer to move to another state or area to be closer to their children and grandchildren. As we age, having family members nearby can be crucial as we must rely on their help more than ever before.

Also, if you suddenly lose a spouse after moving across the country, you will find support by being closer to your family. On the other hand, if you move you will be leaving your friends behind.

You want to move where the cost of living is cheaper.

This may not matter to you if you have saved a good nest egg for retirement. But most people have a limited amount of retirement savings. Moving to a more affordable place to live could make all the difference in allowing your savings to last longer.

If you currently live in an expensive area, you should consider moving to a place with a lower cost of living. The sooner you relocate the easier it will be to make sure you do not spend your savings fast.

Keep in mind that housing is your biggest budget item. Even in retirement housing costs as a percentage of spending will remain around 35% on average.

Reducing your housing costs now will give you more cash to put toward your other retirement goals. Once you are retired, the fact that you have lower housing costs means you will need less income in retirement for this essential expense. Plus, you will have freed up more income for other retirement expenses. That could mean more travel or spoiling your grandkids.

You want to move where taxes are lower.

Even in retirement, you must pay taxes. The cost of living is important. But how much you pay in state income tax also plays an important role when you live on a fixed income.

Some states are tax-friendlier than others. The following states do not have a state income tax:

Florida
Nevada
New Hampshire
Tennessee
Texas
Washington

Moving to a state with low taxes and estate taxes may be worth considering if you have built a sizable amount of retirement assets that will be taxed as you withdraw them.

For example, if you move from Massachusetts to Florida, you rid yourself of state income tax. But if you move from New Hampshire to South Carolina, you have to start paying state taxes.

You want to downsize to a smaller home.

If your current home is too large for you, you should consider downsizing.

Find a house that is easier to maintain. Downsizing is not just a physical change. Sometimes it is a way to create a new life in a new space.

Moving also allows you to choose a home better suited to your needs during your retirement years.

By moving from a single-family home to a condominium you are trading stairs and mowing the lawn for less space and more amenities, including indoor and outdoor swimming pools, a gym, a club room, etc.

Also, it might be a good time to sell your home if you know that it will sell for a great amount of money in the current housing market. You may get a high bid for your home and then be able to move anywhere you want to.

If you have always wanted to travel in retirement, then selling your house may be a great decision. You can rent a condo or apartment so you will feel free to travel often and not worry about maintenance, repairs, and yard work. Even if you just downsize to a smaller home, you will have more money available for your travels, and hobbies.

A move can also reduce your costs if you are looking at relocating to a senior living community.

Some of these communities are all-inclusive with dining, shopping, and fitness/spa located in one spot. In exchange for an HOA fee, things like maintenance and lawn care may be covered for you which means less stress on your wallet and time.

You prefer to move to a place with a better climate.

If you want to avoid the Northern winters, you might want to relocate to a different geographical area with a better climate.

After living in a cold climate for years, many retirees prefer to move to a warmer climate so they can stay active and enjoy spending more time outdoors. I hear all the time people saying they want to retire at the beach. But have they ever spent time in a beach community in the off-season? It can be a very different place.

However, if you have never lived in a warmer climate before, you will need to get yourself time to adjust. Do not expect to get used to the new temperatures immediately. Be patient with yourself and learn how to adapt to the new climate.

Additionally, if you have health problems, talk to your doctor about planning to move to a different climate. Your doctor should help you make the transition easier. Some medications may even interfere with your body’s ability to tolerate temperature changes.

There are plenty of advantages to living in a warmer climate but there are also damaging weather conditions such as hurricanes, tornadoes, etc. Be sure to ask your real estate agent questions about special insurance policies you need to cover any weather-related damage if you own a home in that area.

Why to stay put and retire in place?

Ideally, retirement is supposed to be a time when people move to a warmer climate to sip drinks on the beach or to play endless rounds of golf. But in reality, a huge percentage of Americans are happy to stay put and retire in place.

There are many good reasons to retire in your hometown.

It is cheaper to retire in place if your mortgage is paid off.

Moving is an expensive task both in time and money.

You will spend a large amount of money and time looking for a new home, preparing your existing home to list, paying realtor fees and real estate taxes. Then hiring movers, moving, paying closing costs, and renovating your new home to fit your style and taste. If you stay put these expenses can be avoided.

Remaining in your community.

You are lucky if you can afford to stay where you are in your retirement years. You get to keep what is familiar and comfortable in a home filled with memories.

Additionally, staying closer to your friends and neighbors will help you fight the loneliness and isolation that often comes with retirement.

As we age, our ability to socialize and meet new people shrinks. Perhaps, that is because we are no longer working, or maybe we do not have enough energy to make a bunch of new friends. That is why remaining in your community gives you access to people who have known you for years, maybe even a lifetime.

Additionally, if you stay close to home, it might be easier to find work if you start depleting your nest egg fast. Perhaps you can reach out to the old group of friends or colleagues to find opportunities for a part-time or freelance job.

Great healthcare system

If you live in an area that has a great healthcare system, that is something to consider before moving somewhere else. Moreover, you will be seeing the same doctors that know you well.

In retirement, the typical household spends around 12 percent of its household income on medical expenses annually. That amount increases to nearly 16 percent by age 75.

If you are trying to keep your out-of-pocket costs as low as possible, do not rush to leave affordable health care behind.

Update your home for aging in place.

If you decide to stay put, make sure it works for you.

Take a critical look at your current home and decide what changes you have to make to your home that will pay off in the future.

Here are some items that might be on your future project plan:

Add, expand, or renovate a bathroom.
Extend your bedroom and add an ensuite.
Redesign your kitchen to fit your new lifestyle.
Create an office space. It will help if you plan to do any side work or freelance.
Create a guest room. If your children and grandchildren come often for a visit, having a separate room will help them feel more comfortable.
Create an outdoor space to be your sanctuary.

As we age, so will our homes. Today we move effortlessly around our homes. But as we grow older our mobility will decline.

house with a wheelchair person - retire in place

As a result, those stairs might not be so easy to fly up and down to get to the second-floor bedroom. Or how about the bathroom? Climbing in and out of your tub could become a slippery risk.

Even the simple task of climbing the entrance stairs to get into your home might be an issue at some point. If you plan to stay put and “age in place”, start figuring out how much it would cost to make your home senior-friendly.

You need to find ways to make your home easy to access no matter what your age, size, or abilities.

Options might include:

First-floor master bedroom
First-floor bathroom
Bathroom grab bars and railings
Curb-less showers
Shower seat
Non-slip safety flooring
Task lighting in the kitchen and other work areas
Wide doorways to fit walkers and wheelchairs
Entryway ramp
Well-lit hallways

Home Renovations for Aging-in Place

Deciding where and how to live always involves some research and detailed planning. So, put your planning skills to work and think about where you will be comfortable living in retirement.

Here are a few related posts you might want to read:

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Is 55+ Active Adult Community Right for You?

by Maggie Leave a Comment

boardwalk on the water-active adult communities

There are 76 million baby boomers born between 1946 and 1964 and many of us looking forward to our next phase of life – retirement.

Millions of baby boomers are very well off. On the other hand, many baby boomers will be facing a tough financial future. Because our savings are low, our 401(k) portfolios have been reduced, some of us took forced retirement early and almost no one is getting paid pensions.

But the main question is where you are going to live in retirement still valid never matter your financial situation.

Everyone has their own take on retirement lifestyle and retirement living preferences. But today many boomers are interested in moving to an active adult or 55+ community rather than retiring in a traditional neighborhood.

When you reach the age of 55, you have a new choice of lifestyle. It is a neighborhood where people live with neighbors who are at the same stage of their lives. Many have raised their children and are ready to focus on their new phase of life without the responsibilities of parenthood and careers.

As you start exploring your retirement living options you may find that active adult communities are not different than any other residential community, besides their age restriction. Most of them are designed for a retirement-friendly and low-maintenance lifestyle.

These 55 and over “age-restricted” communities typically mean that someone in the residence must be at least 55 years old. But moving to this type of retirement community can offer you plenty of benefits when it comes to amenities, services, and social life.

If you are planning to move to a 55+ community, you can choose from different types of these organizations.

Types of 55+ active adult communities:

There are several different types of 55+ communities to choose from.

Active senior communities. These 55+ communities are designed for those who live a more active lifestyle. They offer plenty of various activities such as swimming, biking, hiking, etc.

Golf and resort communities. These communities offer a resort-like environment with high-quality amenities. Your lifestyle will be like a year-round vacation living on a beautiful gold course.

Luxury communities. In this type of 55+ communities, you will find larger homes with more refined amenities, impressive landscapes, and luxury features available to their residents.

Gated communities. This type of community offers all the bonuses of a 55+ community with added security and enhanced privacy.

These types of communities for active adults make life easy and enjoyable each day. However, is a 55+ active adult community the right choice for you?

The Positives

Convenient Amenities

Perhaps the best benefit of living in 55+ communities is that they provide plenty of amenities. The community will give you many opportunities to socialize, exercise and stay active in your retirement years.

Amenities that may be provided include:

Golf courses
Fitness centers
Swimming pools
Tennis courts
Dining areas
Social events
Arts and crafts classes

In addition to the amenities, the community residents often organize social events, affinity clubs, volunteer groups, and other ways to stay active and involved.

Social life

When you move away from a neighborhood where you have lived a long time, you would appreciate the opportunity to make new friends.

In active adult communities, residents are likely to be in the same place in life. Everyone worked hard for many years, raised a family, and now is looking to enjoy a relaxed and comfortable retirement.

It will be easy to find people with whom you have so much in common and who want to develop a great friendship.

Active lifestyle

When you retire and have plenty of time on your hands you would like to have neighbors who share your interests and activities.

When you have the more available time, it is easy to make your schedules more in sync with others. Each community has different activities and amenities, you just need to pick and choose what you want to do.

Your community may often present many opportunities for activities like potluck dinners, parties at the clubhouse, regular board and card games, book clubs, and organized outings for residents.

man and woman doing yoga - 55+ active adult communities

The best part is that you do not need to wait for weekends or take time off from work to go on a trip or schedule some activities. You can explore new hobbies, meet like-minded people, and have a varied and interesting life. People you meet will like to stay busy, social, active, and have fun.

Low Maintenance

This might be the best-selling point for people who choose to move to an adult active community.

If you are tired of lawn care, yard work, exterior upkeep, and everything else in between, you might find that low maintenance and hassle-free living is appealing.

There is no more yard work, snow-blowing, raking leaves, or painting the exterior. Many residents choose to downsize from the big homes where they raised their families and move to smaller homes with less maintenance.

The interior maintenance and daily upkeep are still the responsibilities of the homeowner. However, as a resident, you will enjoy your life without the burden and hassle of dealing with your home exterior repairs and maintaining the yard. Your homeowner’s association (HOA) fees will cover the costs of community maintenance and your home exterior.

Typically, the homeowner’s association provides all services to keep the community beautiful and pristine.

Quiet and peaceful environment

Adult active communities often offer a more peaceful and quieter environment than residential neighborhoods with families that have young children.

Adult children and grandchildren are of course welcome to visit. But overall, the requirement for residents of 55+ communities is to have a less noisy and more quiet place to live.

Even though you like a kids-free environment, occasionally you might want to host your family including grandchildren. When looking at an active adult community, make sure to learn their policy about having visitors and overnight guests who are younger than 55.

Some communities have restrictions on how many family members can visit and for how long.

Affordable cost of living

Today these types of communities are located in many regions and became very popular.

Also, it triggered more interest from the residential developers and builders. Perhaps, you have an option to move into one of these new construction homes which are built to be more modern and energy efficient.

With the new construction, you can personalize your home by selecting the details, materials, features, and the latest eco-smart technology. This means you can avoid complicated renovations to make your old home more age friendly.

However, if you are planning to move to a retirement community at age 55, you have to consider how the monthly HOA fee fits into your budget. You can only start taking Social Security benefits as early as you turn 62. But that would still leave you with a 7-year gap to fill.

Also, taking money out of a 401(k) plan and IRA before age 59 ½, can trigger tax penalties. Hence, if you are not working full-time or part-time you may have to pull money from your savings accounts, CDs, or even an investment account to cover the cost of living.

Keep in mind, that taking money from your taxable investment account can affect your tax liability. You have to make sure that you have enough money to pay your taxes.

But as you compare the cost of aging in place and moving to a retirement community, you might find out that buying a retirement home in a 55+ community may be a cheaper option.

According to statistics, the average annual spending for people aged 55 to 64 adds up to $57,180 per year ($4,765 per month). It includes the costs of housing, utilities, transportation, food, healthcare, and entertainment.

But if you still want to live independently but with the benefit of added amenities, the average cost of a 55+ community will be between $1,500 – $4,000 per month.

Again, you have to look closely at what you are getting in exchange for what you will be paying. Then compare all this to your current budget and see what you might spend in the future.

The negatives

Homeowners Association (HOA) fees

Most of the adult retirement communities have some form of the homeowner association, and they collect HOA fees from the community members. These dues and fees are used to pay for the community repairs and renovations, and upkeep of the grounds.

Rules and regulations

While the homeowner association (HOA) collects fees from the community members, it also carries out community laws, rules, and regulations. These regulations and rules can be quite broad. If a resident violet a rule, the HOA may impose a fine.

Thus, before moving into the community, consider reading through the rules thoroughly so you will not be surprised by how you may customize your home or can and cannot use the amenities.

No medical care on-site

Most of the active adult communities do not provide any kind of healthcare services as part of your HOA monthly fee. Also, there are no on-site medical facilities.

These communities are mainly created with a focus on independent living rather than healthcare services. If you expect additional services, you can arrange for home care assistance through a third party. But if you need extensive medical care, you may want to look into another community with assisted living medical care.

Lack of age diversity

There is also a lack of age diversity in these types of communities since they are an age-restricted, and at least one member of the household should be 55 or older.

Not everyone finds it appealing to live with mostly old people. If you want to live amongst diverse age groups, you should reconsider moving into this type of environment.

The final words of advice – it is never too late to start finalizing your retirement lifestyle and retirement living options. The earlier you start, the better prepared you will be.

Here are a few related posts you might want to read:

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