Have you fantasized about moving to a beach town or a city that’s warm and sunny in the winter when you retire? Relocating in retirement can be an adventure full of new cultural and life experiences. Once you look closer at relocating for retirement, however, you might get nervous about all the expenses that accompany relocating.
For one thing, you’ll pay thousands of dollars to a moving company. Then you must purchase a new house or condo or find a rental property you can afford. Add new rules for state income taxes, property taxes, possible taxes on your Social Security benefits and a potentially higher cost of living, and you could end up paying much more to live in another city when you retire.
But what if you could enjoy most of the benefits of relocation without all the expenses and hassles of taking up permanent residence in a new city or town?
Below are five alternatives to relocating in retirement.
1. Become a snowbird
People who hate being at the mercy of harsh winters have flocked to warmer climes for a few winter months for decades to escape the cold. And with plenty of Airbnb and other vacation rentals in large cities and even small towns, taking flight to a better winter locale is easier and more affordable than ever.
So, if you’re thinking about moving somewhere you love, why not just stay there when the weather is close to perfect? For instance, many cities in Florida and Arizona are ideal in the winter, with warm days and nothing worse than sweatshirt-weather at night.
As a snowbird, you may be able pay anywhere from $6,000 to $12,000 to enjoy a few months’ stay in a desirable location. That may sound like a lot, but not when you consider how much you’ll save on moving expenses, closing costs and a new mortgage. Even staying one month a year would give you a break from snow and ice and cost much less.
2. Take more frequent vacations
If committing to renting an Airbnb for two or three months isn’t your style, what about taking vacations more frequently to your desired relocation destination? A week here, a week there, maybe even two weeks at a time, a few times or several times a year lets you experience a place you love without the expenses of homeownership and state and property taxes.
And there’s another benefit to vacationing more often, too. You may get tired of a city or town once you spend more time there. You may also find that you enjoy a much lower cost of living right where you are.
3. Try house swapping
Do you already own a home in a desirable location but want to spend time in your preferred relocation city? If so, you may be able to enjoy a more budget-friendly option in your desired relocation destination than staying at a vacation rental for a couple of months: House swapping.
The way house swapping works is that you stay at someone’s home in another city while they stay at yours. Wondering where to find a house-swapping partner? Check out sites such as HomeExchange and HomeLink to get an idea of your house-swapping options.
Find out: 6 Reasons to Delay Retirement
4. Downsize to free up travel money
Do you really still need that sprawling house – along with all the expensive maintenance, repairs, and upkeep that comes with it – where you raised your kids? What if you sold your current home, moved to a smaller house or less expensive condo, and stashed the profit in savings?
Depending on how much money you make from selling your house, you could have quite a bit left over to fund retirement travel to that city you love. You could also make enough on the sale to travel to other destinations or places you’ve never been. Who knows? You might even find a more affordable place to retire if you still want to relocate later.
5. Stay put with long-term care costs in mind
Nobody wants to think about health problems you may experience as you age. However, it’s wise to keep in mind that 7 in 10 people turning 65 today will need some form of long-term care in their lifetime, according to the U.S. Department of Health and Human Services. Medicare won’t pay for long-term care if you need it – and the national median cost for assisted living was $51,000 a year in 2020 or $105,000 for a private room in a nursing home.
Long-term care costs are expensive, and costs vary greatly by state. For example, if you relocate from Iowa to California, there is a vast difference in long term care costs. In Iowa, the annual median cost in 2020 for assisted living was $48,000 and the annual median cost for a nursing home private room was $86,000. Compare with California’s median annual cost: $60,000 for assisted living and a whopping $137,000 for a private room in a nursing home.