Don’t move to your dream destination before checking out these make-or-break factors.
8 Questions to Ask Before Relocating for Retirement
Is moving to a new city or town a potential piece of your retirement plan? Plenty of retirees relocate to downsize, enjoy warmer winters or a lower cost of living or to live closer to relatives. Others just want a new adventure.
Around 24% of respondents to a United Van Lines survey cited relocating for retirement as their reason for moving in 2019. Most (40%) moved to Florida but many instead moved to Southeastern states with moderate climates such as North Carolina or South Carolina. Lots of snowbirds nested permanently in Arizona and New Mexico, too.
Before you start boxing up decades’ worth of possessions for the big move, make sure you’ve thoroughly checked out what your life will be like in the new city you’ve chosen for retirement.
Click or swipe for 8 questions to ask before making the big move.
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1. How much will I pay for housing?
Housing is one of the biggest expenses you’ll face when you relocate to another city, so make sure you know the cost of buying a home or renting before you make up your mind. A good place to start is Realtor.com, where you can find the average price for a home in that area and look up asking prices for the size and style of home you want. Contact a local real estate agent to get an even better idea of what to expect.
2. What is the cost of living index?
To get an idea of how much everyday expenses like groceries, auto repairs, utilities and healthcare will cost in a city, perform an online search for “cost of living” and the name of the city or town. For a good overview of the cost-of-living index in a city, search sites such as Sperling’s Best Places, AreaVibes and the Missouri Economic Research and Information Center (MERIC).
3. Does the state tax social security benefits?
Since you’ll be drawing Social Security when you retire, make sure you check whether the state you’re eyeing for retirement taxes a portion of your Social Security benefits.
Twenty-six states and Washington, D.C. don’t tax Social Security benefits, but many states tax a portion of benefits, according to the Tax Foundation, a nonprofit independent tax policy organization. Some states tax benefits but also offer exemptions based on age or income level.
4. What’s the crime rate?
The last thing you need is to move to a new city and be scared to leave the house. Plus, living in a neighborhood with high crime will mean higher car and home insurance premiums.
So, search online for a city’s crime rate before you start house shopping. Check Sperling’s Best Places, AreaVibes and similar sites for information on crime. Call the local police department for the scoop on types of crime and frequency of incidents in the city’s neighborhoods.
5. How happy are the residents?
What good is it to retire to a sunny climate if a majority of people are cranky and dissatisfied? To get an idea of how happy residents are in a particular city, look up the city on Sharecare’s Community Well-Being Index. Who knows? Your research may reveal other, more desirable relocation destinations.
6. Will I receive a break on state or other taxes?
There are nine states that don’t levy a state income tax: Alaska; Florida; New Hampshire, Nevada; Washington; Wyoming; South Dakota; Tennessee and Texas. New Hampshire and Tennessee do tax interest and dividends, but Tennessee plans to eliminate that tax in 2021.
Other taxes to consider: Property taxes, estate and inheritance taxes and local taxes, which can be excessively high in some cities.
7. Would seasonal travel to this location be more affordable?
Moving across the country or even one state over is expensive and a major hassle. You have to pay movers thousands of dollars, deal with selling your house and purchasing a new home, get used to finding your way around a new city, find new doctors and make new friends.
So, don’t overlook the option that could be the best of both worlds if warmer weather in winter is your main objective: The life of a snowbird.
You may find spending $5,000 to $10,000 to rent an Airbnb or other vacation rental in Florida or Arizona for two or three months in the winter much cheaper than buying a new home and all the expenses that come with it. Bonus: You won’t have to suffer through months of 110-degree Arizona summer days or hot, humid Florida weather the rest of the year.
Find out: How do Taxes on Retirement Income Work?
8. How can I “try out” the city before making the big move?
It’s easy and smart to live for at least a month or two in the city where you plan to move with Airbnb and other vacation rental platforms. So, book a home or apartment for a month or two and scout the city for yourself, paying close attention to grocery prices, gas prices, crime reports on the TV news and other livability factors.
Like what you see after “living” in that potential relocation destination? Then it’s time to start packing for a new life in retirement.
Published by Debt.com, LLC