You’ve worked hard, saved diligently, and now retirement is on the horizon. Congratulations! But before you pack your bags and bid farewell to your current hometown, there are some critical things to consider. Relocating in retirement isn’t just about picking a spot on the map with a nice view and good weather. It’s a decision that impacts your finances, lifestyle, and overall well-being.
Before you leap into the next exciting chapter of your life, there’s a little homework to do. We’ve got a list of considerations before you relocate in retirement that deserve a moment of your time. A bit of planning now can help you choose your new location wisely, smooth out the obstacles of the transition, and lay the foundation for a peaceful retirement.
Preparing for a Smooth Retirement Relocation
The goal is for you to create a smooth transition to your golden years in your new home. I’ve helped many people navigate this process, I can tell you from experience that the key is preparedness. Each specific ‘to-do’ depends on your unique circumstances, but there are some universal items that are relevant for almost everyone making the leap from their old home to their new one, especially leading up to or during retirement.
Experience Your Future Community First-Hand
While a short vacation can certainly give you a glimpse into what a place has to offer, it’s not enough time to truly get a feel for the culture, lifestyle, and day-to-day challenges of living there. Vacations are like honeymoons, not exactly an accurate representation of marriage. It’s important to take the time to thoroughly research a place before making any major decisions about relocating. It’s also helpful to talk with locals who already live in the area to get their perspective and advice. Ultimately, taking the time to truly explore and understand a place before making the decision to move there can help you narrow it down to a location that is aligned with your vision for your life.
The Benefits of Renting Before Buying
Another piece of advice I always give my clients is to rent before you buy. I know, I know – you’re probably eager to put down roots in your new community, but hear me out. Renting gives you the flexibility to try out different neighborhoods and housing options before making any final decisions. Plus, if you do end up deciding to relocate again, you won’t have to deal with the hassle and expense of selling a home. Additionally, renting gives you the opportunity to test out different types of living spaces. You may think that you want a house with a yard, but after renting an apartment for a year, you may realize that condo living is more your style. Or perhaps you thought you wanted to live in the bustling city center, but after renting in a quieter suburb, you may discover that it suits your needs better. Some people prefer the 30-90 day rental approach to bounce around from 1 location to the next until they feel comfortable. Others decide to rent longer term to give them enough time to really explore around and get the full experience of an area, without fully committing to settle down there yet.
Notifying Friends, Family, and Institutions
Of course, once you’ve made the decision to relocate, there are a handful of important parties to notify. This includes friends and family but also important institutions like your bank, insurance companies, investment companies, the IRS, etc. Make a list and organize it based on order of importance.
(The IRS and your personal financial institutions that you do business with might be towards the top of that list for most people)
It’s also a good idea to set up mail-forwarding with the post office, so you don’t miss any important correspondence during the transition. A small amount of proactive communication can save you a large amount of time.
Health Care Considerations in Retirement Relocation
When it comes to retirement relocation, it’s not just about finding your dream destination. One of the first practical topics to address is the reality of aging – health care considerations.
Selecting New Medical Professionals
One of the first things you’ll need to do when you move to a new area is find new medical professionals. This includes everything from a primary care physician to specialists like cardiologists or orthopedists. You don’t necessarily want to just pick the first doctor you find. Take the time to research your options and find medical professionals who are in-network with your insurance and have experience treating patients in your age group. You may also want to consider proximity to hospitals and urgent care centers, especially if you have any chronic health conditions. The last thing you want is to be stuck in traffic on a long drive when you’re in urgent need of care.
Bringing Medical History and Prescriptions
Another important step is gathering all of your medical records and prescription information to bring with you to your new location. This will help in the process of the transition of care and avoid any gaps in treatment. I recommend creating a physical binder or a digital folder with all of your important medical documents, including a list of current medications and dosages, immunization records, any recent test results or imaging scans, and anything else that your current doctor recommends. You may also want to ask your current doctors for referrals to providers in your new area. Don’t forget to transfer any prescriptions to a new pharmacy as well. It’s a good idea to do this a few weeks before your move so you have time to sort out any potential issues with insurance coverage or availability of certain medications.
Financial and Legal Considerations for Retirement Relocation
Moving to a new place for retirement isn’t just about finding the perfect location – it’s also about making sure it makes financial sense. Even once determining that it is financially viable though, there are still a few key steps to take to solidify your financial well-being long into the future.
Establishing a Local Bank Account
First and foremost, you may want to consider setting up a local bank account in your new location. This can make it much easier to manage your day-to-day finances and avoid any potential hiccups with out-of-state transactions. Plus, it’s a good relationship to build for referrals to other professionals, as well as a potential resource for financing options for various future purchases.
Consulting with an Accountant on Tax Consequences
Another crucial step is consulting with an accountant about the tax implications of your move. Different states have different tax laws, and this can have a big impact on your retirement income and overall financial picture. This can come into play with the exact year you decide to sell your home, to navigating potential taxation of income and Social Security benefits. And although some taxes may seem discounted in your new desired location, there are often other taxes that may be higher than where you are coming from that can surprise you. An experienced accountant can help survey the lay of the land for you on this topic and possibly help you with some tax-related ramifications of your move.
Understanding Insurance Variability by Location
Next, don’t forget about insurance costs. Just like taxes, insurance rates can vary significantly depending on where you live. This includes everything from health insurance to homeowners insurance to car insurance. Before you make any final decisions about your retirement relocation, it’s crucial to do your research and get quotes from multiple insurance providers. You don’t want to be blindsided by high premiums that put a strain on your retirement savings. Some areas are known for storms, fires, or other issues that naturally can increase premiums relative to other areas where those issues are less common. It may make sense to explore working with an independent insurance broker who can present multiple options and potentially bundle your insurance for better overall rates. Much like all finance-related issues, being prepared in advance is often the way to go.
Updating Estate Planning Documents
Finally, don’t neglect the legal side of things. If you have any estate planning documents like a will, trust, or power of attorney, you may need to update them to reflect your new state’s laws. (A free consultation with an estate attorney can help determine the need for this) This is especially important if you’re moving from a community property state to a common law state (or vice versa), as this can impact how your assets are distributed upon your death. It’s also a good idea to review your beneficiary designations on things like retirement accounts and life insurance policies. I always recommend working with a local estate planning attorney who is familiar with the specific laws and regulations of your new state. They can help to facilitate your wishes are carried out and your loved ones are protected.
Putting All the Pieces Together with a Comprehensive Plan
The goal for many people is to spend less time worrying about all this, and more time being confident that they are in good hands. While the topics we addressed above are a great place to start, some people may find it a bit overwhelming. For those people, it may make sense to involve some professionals that can help coordinate each of the financial aspects, not just for the transition, but also the years beyond it as well. This is where a holistic fiduciary advisor may come into play for you. They can communicate with multiple financial professionals, solidify your investment strategy, and help you navigate through the various obstacles and complexities you may face.
Key Takeaway:
Before you move, rent in your dream spot for at least a month to get the full experience. Buying can wait. Notify loved ones, financial institutions, and the IRS about your move. Research new doctors before you move and choose wisely. And carry your health history with you. Speak with a local estate attorney to identify any necessary changes to your estate plan. Research taxes and insurance before making the final decision. And finally, explore working with new financial professionals who have your best interest in mind.
Conclusion
Relocating in retirement can be daunting, but some careful thought and research can take away some of the stress. From the cost of living to access to healthcare and the social scene – you can make a well-informed choice that sets you up for a fulfilling, enjoyable retirement in your new hometown.
A breathtaking view or perfect weather might seem like the ultimate factors in selecting a retirement destination, but there’s more to consider. Your new location should match your financial goals, desired lifestyle, and overall well-being. Invest time in researching, planning, and preparing – this groundwork can pave the way to making your retirement dreams come true.
Your ideal retirement might just be waiting for you in a beautiful location that genuinely feels like where you belong, home.
