Where’s the best place to retire?
Type that question into Google, and you’ll find a whole bunch of articles boasting the hot new spots for retirees to hang their hats.
And while those pieces make excellent cases for the cities they feature, there’s a critical element missing: you—your plans, visions, and hopes for this next amazing phase of your life.
So, we want to refine the question above:
Where’s the best place to retire for you?
Home is where the heart is, but how can you get your head, heart, and wallet to agree on the same location? These seven questions just may hold the answers.
How Do You Plan To Spend Your Time?
We’re coming out swinging with this question and challenging you to think critically about one of the most enigmatic elements of retirement: your time.
Building a new routine in retirement full of meaning and purpose takes time and a lot of thought. Before you retire, your days are almost planned for you: work, taking the kids to school/activities, hobbies, friends, etc.
But when you retire, the kids are likely out of the house, and you aren’t spending 40+ hours a week at work, leaving a big hole in your days. Many retirees struggle with a sense of identity and purpose after they stop working. Below are some ideas to consider as you carve out the next phase of your life.
- Check the “big-ticket” items off your list, like a dream trip to Europe, buying a boat, or downsizing.
- Don’t stop working. Just because you’re “retired” doesn’t mean you have to stop doing the work you love. Maybe you want to pursue work in an adjacent field, open your own business, consult, teach, etc.; the options are endless. If you aren’t sure where to start, think about what you love doing. What activities do you get lost in? In what areas are you excited to learn, grow, and develop?
- Create a schedule that supports your “want to” list. Think about the items and activities that will help motivate you in this new phase. You’ll likely have different goals while retired, but listing them out helps you strive for something. Let this mantra guide you: be inspired, not retired!
- Make volunteering a regular part of your week. Whether in a community park, religious organization, or anything in between, volunteering can help give retirees a deep sense of purpose and fulfillment. It can also introduce you to new people and communities.
- Keep up your hobbies like gardening, painting, woodworking, writing, etc. Make time for the things that bring you joy.
- Stay active. Retirees need to stay mentally and physically active. Perhaps you want to start off every morning with a walk around the neighborhood, or every Thursday, you and your friends get together for a round of golf.
- Learn something new. Exercising your brain is critical for mental agility as you age. You may want to take a course on a topic or skill you’re interested in, read a book that challenges you, listen to an informative podcast, or engage in games like puzzles and crosswords. These activities and more can help you form your curious list. Just like your “want to” list, your curious list represents activities and areas where you’re excited to learn and grow.
- Maintain and form new relationships. Wherever you retire, you should have or make a strong support network. Nurturing relationships is critical to finding joy and happiness in this season of life. Maybe you want to be close to your kids and grandchildren, or perhaps you want to stay where you have a network of close friends. It’s also good to form new friendships through hobbies, part-time work, volunteering, and more. As you consider your relationships in retirement, you need to be hyper intentional. Be specific about which relationships you want to improve upon. And ask yourself, are you the type of friend that you’d want to have? If not, how can you do better? Where do you excel?
Better understanding how you want to spend your time can help inform where you want to retire. If a morning stroll on the beach is a “must-have,” maybe you’ll need a place with a shoreline. If spoiling your grandchildren is a top priority, you might consider living close to family where you can pop in for dinners, birthdays, and regular babysitting nights.
Uncovering how you want to spend your time is really all about prioritizing the experiences that will bring the most richness and depth to your life.
What Are Your Present (and Future) Health Needs?
Your ideal retirement location must consider your current and potential future health needs. While you may be in tip-top shape now, you’ll likely require more medical visits as you age.
Any place you retire should have high-quality medical facilities readily accessible. As you consider locations, ask yourself,
- Where’s the nearest hospital?
- How close are your primary care doctor and any other specialists?
- Are you moving your primary care to another provider or simply seeking supplemental support?
- Where is the closest urgent care/after-hours clinic?
- Do these facilities have a good reputation?
A secluded mountain retreat may be nice for a weekend, but if you fall on your walkway, an hour+ drive to the nearest medical facility won’t cut it. Quality medical care should be well within reach for any place on your retirement short-list.
If your dream retirement spot requires a move, take a look at how that could impact your Medicare coverage. Many Medicare Advantage plans (Part C) are zip code specific, meaning if you move, you have to pay out of pocket for care unless it’s an emergency. Again, take a look at your policy and determine if any adjustments would need to be made in case of a move.
Are You Mentally, Physically, and Financially Up For A Move (Or Two)
While traditionally retirees decide to stay put, more and more are on the move. In the last year, 30% more people moved for retirement than in previous years. This great Exodus brings about many unique questions and considerations like climate, activities, support system, finances, and more.
Is a move on your mind?
If so, there are several factors you’ll need to consider.
Let’s start with the many ways a move could impact your lifestyle. Be sure to talk through the following questions.
- What’s the climate? A warm respite in the middle of winter is different from living in the heat year-round.
- Is it near family, friends, community, or other support systems? Your golden years are made even sweeter when you have loved ones to share experiences and make memories with. Plus, if you move further away from family, you’ll likely spend more on transportation, going back and forth for frequent visits.
- Does it align with your lifestyle goals? How does the new location support the things you’re passionate about doing in retirement? Do you want specific terrain like a mountain, lake, ocean, etc.?
- Have you traveled to this place often and at different times throughout the year? Arizona in the winter is different from Arizona in the summer. Are you prepared to make the move full-time? Would a part-time move be more beneficial for your lifestyle? It’s often best to “test-drive” a retirement location, especially if it involves a move. Do your best to spend an extended amount of time in that place. Find the grocery store, medical facilities, religious services, exercise classes, volunteer opportunities, etc., to see if you could picture yourself living in that place full time.
- Are you moving to a “safe” location? Check out the crime rate in your potential area. We aren’t suggesting this to scare you, just so you’re well prepared for something new.
Now, take a look at what a move could do to your finances.
Just the act of moving can be expensive. You’ll need to look at:
- Realtor fees
- Home improvements to help your current house sell (paint, fence, minor updates, etc.)
- Packing, moving, and unpacking again (and likely hiring a company to help you do it)
- Purchasing and/or renting a new property
- Additional property expenses (HOA, ongoing maintenance, insurance, taxes, etc.)
And that’s not all.
It’s also essential to calculate your ongoing expenses in your potential new location.
- Cost of living (groceries, gas, etc.)
- Taxes and insurance
- Travel and transportation. This is especially important if you’re moving away from family.
- Entertainment + activities (gym memberships, country/golf club memberships, etc.)
For those who want to snowbird or split their time between places, you’ll need to plan on additional ongoing costs like storage, traveling, home maintenance, and more.
If You Plan To Move, How Much Time Have You Spent In The Potential Location?
As we introduced earlier, it’s best to move to a location where you’re confident and comfortable being there year-round (or part-time if you’re snowbirding).
Just because your location makes a good vacation spot doesn’t mean it will make a great year-round haunt. You go on a vacation to escape reality, and in retirement, you’re building a new reality, so you need to pick a spot that you enjoy for more than just a month or so.
Ask yourself,
- How much time have you truly spent in this location?
- Have you ever traveled at different times throughout the year/seasons? Do you enjoy winter as much as summer?
- Are there amenities you want/need in your everyday routine?
- Have you developed friends/community in the area?
Before you take the plunge and move, do your best to spend more time in this location, ideally four or more weeks. Also, travel there during the off-season and see what it’s like. You might not be as crazy about your beach town when it’s deserted in the winter.
To take the “test drive” up a notch, start incorporating activities you plan on doing in retirement, like Tuesday afternoon yoga or Saturday morning golf.
Have You Considered Your Changing Tax Requirements?
Every state has different tax laws, some of which are more favorable to retirees than others. Washington, for example, doesn’t have a state income tax, yet the highly desirable places to live (city, mountains, water) tend to have higher costs of living.
Here are a few types of taxes to be aware of:
- Income tax
- Sales tax
- Vehicle tax
- Estate/inheritance tax
- Property/real estate tax
- Taxes on retirement income (Social Security, pension, etc.)
Understanding your changing tax situation is critical, especially for those who plan to split their time. In this case, you’ll need to choose a primary residence, and some states require you to live there a certain amount of time for that qualification.
Creating a proactive tax plan will be critical for your nest egg’s longevity. If you’re moving to a place with higher property taxes, for example, your house-hunting budget may be a bit smaller than you planned. Keep in mind that there are trade-offs in any circumstance.
Your financial team can help you look at the bigger picture to see what elements will be best to prioritize for you.
Where Is Your Family, Community, and Support System?
Family and a support system are critical—we can’t overstate this point.
Life’s richness comes in the unique experiences you share with loved ones. So, your retirement location(s) should offer close-knit support systems. This can come in many different shapes and sizes; maybe it’s your children and grandchildren, good friends, religious congregation, exercise group, colleagues, those who share your same hobbies, etc.
In retirement, you should allow yourself the opportunity to form new connections and friendships and nurture existing ones. If you’re splitting your time between places, maybe your “home base” is where your family and loved ones are, and the second is a place you love where you’re excited about making new attachments.
Can Your Retirement Savings Support Your Ideal Lifestyle?
Now that you’ve spent some time considering your lifestyle goals and values for retirement, it’s time to dust off your retirement budget and take a look at the numbers.
Can you afford the ideal picture you’re beginning to paint?
Your financial team (advisor, CPA, attorney, etc.) can all help you better understand the answer to this question.
From a financial perspective, try out a little exercise. First, estimate how much your ideal retirement lifestyle will cost per year. Keep in mind that this number will look different for every person and couple since everyone’s goals for retirement are different.
Once you have that number, multiply it by the average number of years you’ll be in retirement (can be anywhere from 10-30 depending on your life expectancy). Finally, cross-check those numbers with your current and projected retirement income (Social Security, pension, retirement accounts, investments, property, cash, etc.).
This exercise may help you get a rough idea of if your savings are aligned with your vision for retirement.
A financial plan and a team of trusted advisors can also help you create a plan that instills confidence and excitement for the next phase of your life.
Retire Well
Where you decide to retire is a significant decision, both personally and financially. You want to select a location that supports your ideas for this next phase of your life.
As you can begin to see, selecting a retirement location is much more involved than placing your finger on a map, packing your bags, and throwing caution to the wind. This isn’t a decision you want to make lightly, especially if it involves a move.
Our team at TFS is passionate about helping you craft a retirement plan that aligns with your goals and values, and the place you live is a significant part of that conversation.
If you’d like to talk about finding the perfect retirement spot for you, let’s look at your financial plan together. We’d love to help.
