Does it make sense to relocate when you retire?
Many people dream of retiring to a new location. It may be a tropical beach, an outdoor area with lots of adventure, or a smaller, quieter community without the bustle of city life. Several people consider relocating abroad, to enjoy new cultural opportunities and hope to achieve a lower cost of living in retirement.
Relocating may indeed make sense for a number of people entering retirement. But before making plans to move somewhere new, there are important steps to consider.
1. Proximity to family and friends
One of the things that contributes most to a satisfying retirement is being able to spend time with family and friends. Good relationships are often a key indicator of one’s happiness. If you love the idea of moving somewhere new when you retire, consider if this will enable you to spend a lot of time with the people you love the most.
2. Try before you buy
If the new location you’re dreaming of is different than where you live now, consider taking ample time to visit and explore before you commit to move. Explore the climate in more than one season. Learn about community activities, health care services, safety, events, and services available in the new area.
Meet with a real estate agent and check out several different properties in various neighborhoods in the area you’re considering. While a lot of new locations can seem appealing at first glance, taking time to really get to know a new location can help make sure you’ll be happy to relocate there.
3. Count the costs
Even if you’re moving somewhere with a lower cost of living, there are always additional costs to consider when you relocate.
Will you be able to sell your current home at a good price to allow you to move?
Will you need new furnishings, vehicles, boats, or other significant costs to get settled?
Do you need to allocate more to your travel budget to allow you to visit family or travel as needed?
Are there new expenses that need to be accounted for in your monthly expenses?
Having a clear understanding of all the costs required to relocate can help you plan effectively and avoid unwanted surprises.
Moving to your dream retirement location may indeed be a great thing. Be sure not to overlook the planning needed to make your retirement dream a reality.
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About the Author:
David Edmisten, CFP®, is the Founder of Next Phase Financial Planning, LLC, a financial advisor in Prescott, AZ. Next Phase Financial Planning provides retirement, investment and tax planning that helps corporate employees retire with both financial and lifestyle security.