Most of us have big plans for retirement, and for many that includes a new place to call home. Maybe you think you have this destination locked in place, or maybe you have a vague idea of the type of climate and location you are looking for, but nothing is huge.
In the end, it comes down to making emotional and financial decisions. Whether you think you know or need help deciding, these retirement planning and lifestyle experts have some tips on how to make your retirement decision, while considering everything from the cost of living to the local nightlife.
1 Make a list
You may have always enjoyed visiting Florida in the winter. Or maybe you dream of the snowy life in the cabin in Montana. When most people think about retirement, their mind wanders to places they have vacationed or visited.
And that’s a good starting point, says Dave Hughes, a retiree and author of three books on designing the best retirement lifestyle. But you will want to dig deeper.
“It’s rare that places that make great holiday destinations make great retirement destinations,” he says. “When you go on vacation, you get away for a week, right? While when you go to live there, you probably are not going to spend every day on the beach. And of course, then you have to deal with tourists. “
Hughes also says that holiday destinations are aimed at tourists and are not always top notch in terms of the comforts one would expect for everyday life.
Jody D’Agostini, CFP, Equitable Consultant, says you focus on your life cycle first.
“You have to like the place where you live and have people sharing your retirement. “Look at local amenities, such as arts and entertainment, retail stores, libraries and civic organizations.” “Sometimes a local university will give you a place to continue as a lifelong learner.”
If you are religious, you will probably be interested in finding a spiritual community when you relocate.
“You can drop by the new location for a service and meet with church leaders to see if this new community is right for you,” says D’Agostini.
2 Limit it
Many travelers soon learn that their favorite hot spot in California is fun for a weekend, but unhappy as a place to drive every day. And while Hawaii is picturesque, it may seem centuries away from family in the neighboring United States.
That’s why Hughes suggests taking a closer look at your original list.
“I recommend you go there for at least a week to two or three different places throughout the year to see if a place is as beautiful in summer as it is in winter,” he says. “Is the city in good condition in 10 to 20 years or is it in decline?”
Instead of remembering the places you visited, see if there are cities that support the kind of lifestyle you want to follow, Hughes suggests. Maybe that means finding a community with hiking trails, golf courses, great wineries or a strong arts community.
“Look for a retirement position that has these things available,” he says. “This is not necessarily, you know, an active 55-year-old community in Florida.”
Once you have a list of possible locations, it’s time to narrow it down. Hughes says that in order to do that, you will want to consider the other, less exciting factors in a particular community – that is, the way you live there can affect your book.
3 Think family and healthcare
No one on this list should be decisive, but they are all important factors in choosing your retirement home. Taxes can be astronomical in a situation, for example, but they can break even when you feel you will not have to fly home to see family every holiday.
Similarly, you may be able to move a whole country away from your grandchildren if you know for sure that the place you are going to have has many activities that you enjoy.
“As you get older, you will probably have health problems,” says D’Agostini. “Make sure there is good access to doctors, dentists and medical centers in case of emergency.”
This may mean reassessing your plans to live in a rural part of the country. Or it could just mean a doctor search in the area before you move.
And if you think you are in a location, you have to face the fact that not all of you who know and love them will relocate. If the time you spend with your family and close friends is important, you will want to consider it in your decision.
D’Agostini says this means pricing flights and trips to and from these individuals. It also means looking at a local airport for use.
Last on your to-do list, says Hughes, should be good finances. While money is important, you do not want to be frustrated if you cannot get the right pitch so invest in a good capo.
“A place that has a high cost of living or high taxes that you may need to stay away from simply because you can’t afford it,” he says. “But if you go to the cheapest place, even though you may spend less money, that does not mean you will be happy there. Well is to find this sweet spot in the middle. “
4 Do not forget the taxes
D’Agostini suggests researching the income and sales tax for the state you want to add to your list. For example, places like Florida, Texas and Wyoming do not have income tax. But other positions tax investment income. And even more so, like Pennsylvania, they exclude all retirement income from taxation. Keep in mind that if you choose to live abroad, you will need to file a tax return in the states.
Vanessa Martinez, chief executive of The Chicago-based wealth management company The Lerner Group, says you will also want to take a look at inheritance and inheritance taxes in each situation.
“There are five states that do not have an inheritance or inheritance tax,” he says. “This tends to be a big factor in choosing when your wealth exceeds the federal exception.” (The IRS allows individuals to inherit up to $ 11.7 million before being asked to pay estate tax.) If federal numbers sound big, don’t let them stop you from considering these real estate or income tax laws , as well as they differ depending on the state.
“Don’t just say, ‘Oh, this is for millionaires,'” Martinez warns. “You could look at yours and see that it’s $ 300,000 for your state.”
While some people make decisions based on these laws and how numbers are added, you cannot deceive the system. States like Florida require full-time residents to spend six months and one day each year in the state to qualify as full-time residents. And Martinez says Illinois is known for its strict residency laws. If you want to benefit from a tax law, make sure it is above the limit.
If you decide to move, you will want to update your will under the laws of your new state. While your will would still be valid, it could be interpreted differently if you go ahead, says Martinez.
Martinez suggests meeting with a real estate planning consultant and tax advisor as you make your decisions.
5 Investigate the cost of buying a new home
As you evaluate the cost of dinner and beverages in various US locations, keep in mind that your biggest relocation costs will be buying or renting a new home.
D’Agostini suggests talking to a local real estate agent to start getting lists of places you might want to buy. Although most counselors suggest not taking out a new debt, such as a retirement mortgage, you can buy a home with cash, especially if you plan to sell a large family home that has been repaid in full. If so, be sure to consider homeowner insurance, property taxes, and the like.
If your new home is in a fenced community, this can also mean paying HOA fees.
“Add any living expenses that this new arrangement may give you. Will you become a member of a local club and have fees? “Are the prices for entertainment, food, gas and housing comparable, more or less than your current situation?” Says D’Agostini.
6 Make your decision
Once you’ve explored all the aspects of the sites of your choice, Hughes suggests looking at a list of pros and cons for each and creating a spreadsheet to estimate the cost of living in each location. It’s old-fashioned, but looking at the lists on paper will help you decide with your partner.
“The bottom line [is], people will always make an emotional decision. Spreadsheet numbers are really good for highlighting negative factors that you may want to know about. “But when it comes to choosing the final choice, it will ultimately be an emotional choice. Some feel right,” Hugh said.
And if your feet are cold, do not push. There is always the option to try before you buy.
“You may want to rent for a long time before investing in your new living situation,” says D’Agostini.
Keep in mind that choosing a place to retire may simply mean retiring to where you currently live. If so, you can apply all of the above thoughts to your current home country as a way of financial planning.