Where to Retire To? Some Do's and Don'ts
This year, some 4 million baby boomers will retire, meaning that every second about eight Americans punch out and start idly considering moving to
Each year, about 55,000 do it. The 55-and-up population in
The four most popular retirement destinations, as determined by the
Believe it or not, clement weather shouldn't be your only non- negotiable when figuring out where to retire. A number of factors will come into play, from financial considerations like tax rates to less quantifiable components like proximity to family and friends and early bird specials. When you add them all up, you might find that
We talked to a number of retirement and financial planning experts to find the biggest do's and don'ts of relocating for retirement.
Do look for a lower cost of living. One of the worst-case scenarios in retirement is the possibility of outliving your savings.
"One way to help alleviate that stress is to move to a place where your money goes further," said
You don't have to cross a border to find a less-expensive city, though. The key, said
"You want to find a city that is affordable, particularly in these areas," she said. "You'd be surprised how much variation there is across the country. Eventually, you may not play golf or tennis or be able to do as many activities as you did at the beginning of the retirement. These costs will drop off. But you'll still need to go to the doctor, eat, and heat or cool your home."
Do secure access to good health care. "It's a given that as you get older, your health will deteriorate in one way or another," said
"It may be something as simple as arthritis or as debilitating as diabetes can get in some cases. You want to make sure that when problems arise, you will have fast access to high-quality health care providers."
Do make sure you're close to a grocery store. How far are you willing to drive to reach the nearest grocery store? Or dry cleaner? Or library?
Once you've zeroed in on a city, check to see how robust its local amenities are; a little bit of inconvenience can become a big problem once you move there.
Do look for states that offer tax breaks for retirees. "When determining where to retire, it is important to consider how retirement income will be taxed in a particular state, as well as other tax implications of a move in retirement," said
"For example,
Transitioning to a fixed income isn't going to be easy; you'll need every little bit of help to stay atop your finances in the first couple years, and tax benefits can go a long way toward helping with this concern.
When you're shopping around for your retirement city - diligently doing your homework, researching every last tax rate and polling your potential neighbors on their enthusiasm for the Neighborhood Watch - it's easy to let some things fall through the cracks. Here are a number of don'ts for choosing where you will settle down.
Don't base your decision solely on proximity to family. It's a mistake financial advisers see again and again: Retirees move close to their much younger and more mobile children and grandchildren, whom they forget will likely relocate in the near future themselves.
Don't forget about property taxes. It's a lurking expense that's just waiting to emerge and take a huge chunk out of your savings. Property taxes vary wildly by state. In fact, many retirees are stymied when they realize states with low costs-of-living don't necessarily have correspondingly low property taxes.
For example, "
"Even with the higher property tax,
Don't move solely for no income tax. On a similar note, retirees are often lured to states that have no income tax -
"I wouldn't recommend moving simply on this basis," said
Don't rule out college towns. A bunch of rowdy college students are probably not, in your opinion, the one thing missing from your retirement plans; still, according to Forbes, more and more boomers are retiring to college towns. There are certainly ample reasons to consider this move, Frankle told us.
"I think the obvious things are proximity to cultural events and hospitals," he said. "Moving to a college town can be smart because there are many free activities that can be intellectually stimulating."
In fact, per Forbes, a number of universities around the country, including Stanford, Notre Dame and Penn State, have begun to work with private developers to build residential retirement communities near campuses, providing easy access to health care facilities, apartment-style living and amenities like golf courses.
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