Where Will You Live?

Where will you live when you retire?  This is a big consideration, maybe the most important decision you need to make.

It is important to think this through very carefully.  A large part of your satisfaction in retirement will hinge on where you live – not only the house in which you will live, but its location.  I know that sounds dramatic, but in reality, you home is usually your largest financial commitment.  Therefore it requires a considerable amount of thought.

When you bought your home years ago, you knew it would be your forever home.  You planned to raise your kids there, make memories and live there until you die.  Now that you’re facing retirement, though, you start to wonder if this is really where you will be happy for the rest of your life.

There’s a lot to consider, now that you’re ready to retire.  Did you really think it would be easy?

Do you plan to:

Retire in your forever home?

Sure, you’re comfortable with your budget; you have friends and family close; and your support system – church, doctors and hospitals are all close.  But, do you really want to be in the same home for the rest of your life?  If your answer is yes, then congratulations.  The only other thing you need to consider is accessibility as you age:

• Stairs.  If your health changes, how will you get up and down those stairs?  Can you put in one of the lifts that can be attached to your stairs?  Can you afford an elevator?
• Extra handrails in the bathroom(s).
• A walk-in bathtub.
• A shower accessible by wheelchair.
• Wider hallways to accommodate a wheelchair.
• Lower kitchen counter tops for wheelchair access.

You might want to make some of these changes before you retire.  Any changes you make to your home to make it handicap accessible might be tax deductible.  (Consult with a tax adviser to be sure.  I am NOT a tax attorney.)

If you have considered all of the items above, you can skip the rest of this article . . . or you can dream like others do about the “what if’s” of life.

Buy a second home in another state?

Do you dream of spending your winters in a warm climate?  If you love the idea of having a house in a colder climate for summer and in a warmer climate for winter, then perhaps splitting your time between the two makes sense.

You may have dreamed of living on a beach for a long time.  It does sound perfect, doesn’t it?  Not to be a downer here, but some of the things you should consider before buying on the beach:

• Sand.  “Duh!” you may say, but hear me out.  Sand is something you’ll have to learn to live with.  At first, you are just so excited to be close to the beach and be able to spend time on it – any time you like.  Then one day, you find yourself sweeping for the third

  

  time that day and it starts to bother you.  All you do is sweep.  Just sayin’.

• Hurricanes.  Don’t tell me you haven’t thought about them.  Just this year, (and pretty much every year) you heard about hurricane damage in Florida.  It happens up and down the east coast, and the Gulf of Mexico.
• Mud slides and earthquakes.  If you’re going to the west coast, you may not experience hurricanes, but you won’t get off that easy, either.  You know there are natural disasters there, too.
• Insurance.  Trust me, insurance will be higher in coastal areas (because of hurricanes, mud slides and earthquakes).  Not only will you need renter’s or homeowner’s insurance, you may be required to get flood insurance as well.  It is not cheap.

First question – can you afford it?  If you can afford payments on two houses, or have one or both of them paid off, there may still be hidden costs and things you should consider.

Maintenance

There are extra costs in maintaining two homes.  Consider the costs you incur now – like lawn care – which will need to happen in both locations (unless one or both of the homes is a condo).  Even if you are not in residence, someone must be contracted to ensure lawn care or snow removal is being maintained.  Monthly costs, like utilities, will be incurred for each of the homes.  Even though you’re not in one of the homes, you can’t really turn off the power completely when you leave.  Pipes could freeze in the colder location and mold will grow in the warmer climates.

If you are “handy” and can complete projects on your own, you may save money because you don’t have to hire someone to do those projects.  However, there’s still a cost (your time) – the time you wanted to spend relaxing.  You will find there’s usually some project that needs to be completed.

Tax implications

Taxes at the state level vary among states.  This could be a huge consideration when you are deciding which state would be best for your retirement.  Most states have some form of state income tax.  However, there are several states that do not collect state income tax:  Texas, Alaska, Florida, South Dakota, Nevada, Washington and Wyoming.  But you probably won’t get off completely tax-free in those states.  All states and local municipalities need taxes to provide the services they promise residents.  That may take the form of higher property taxes or consumption taxes.  You will need to do the research or talk to a tax attorney about which location would work best for you.

Insects

Moving to a warmer or more tropical location means more bugs.  Roaches, scorpions and insects you’ve probably never even heard of can be expected.  You can have your home treated for insects, but that treatment must be repeated every quarter or so – another expense.

Other considerations

If you feel you would like to purchase an additional home in another state, you should evaluate the area carefully.  Take at least a year to determine if this is the place for you.  Plan to rent a house or apartment in the area for a year, or at the very least visit four times during the year, once during each season.

Sell your home?

If you plan to sell your home, you will need to consider the time and effort involved in preparing it for the real estate market.  Contact a realtor (or two) to get an honest opinion of not only what your home’s value is, but also suggestions for what needs to be updated.  If you’ve lived there forty years, I can almost guarantee you will have some expenses to consider – new roof, new carpet, updating the bathrooms and/or kitchen and maybe some landscaping.

Do you need to de-clutter forty years’ worth of accumulation?  If you will be downsizing, you might consider what you need to keep and what you can sell, give-away, or force your children to take that will eliminate a lot of the “stuff” in your house.  Be sure to throw away papers and things you don’t want to move to a new home.

. . . and downsize?

If you’ve spent all your life in a large house raising children who have since moved out, you may be considering downsizing.  The idea of a smaller home – easier to care for and cheaper utilities – is very appealing.  A smaller home in a 55+ community either close to where you live now or on a golf course in a warmer climate may be calling you.

. . .and rent?

If you are tired of the maintenance required for your current home or your health does not allow you to properly maintain your home any longer, you could consider selling your home and renting.

When figuring out where you’re going to live, look at apartments, condos or even smaller homes to rent.  Be sure to view the actual unit you will be moving to, if possible – not just the model.  You can be deceived about the size of rooms when you see the models – they often have smaller furniture than yours.  You’ll move in only to find that not all of your furniture fits.  If you’re like most of us, you should consider a washer and dryer in your apartment or condo – you may not want to walk to another building in the apartment complex to do your laundry.  Also, you should check out the units that are set up for handicap accessibility.  This may be a better choice and could save you from moving in a couple of years if your health goes downhill.

Assisted Living

If you need assistance with your daily activities, you should research Assisted Living facilities close to where you live now.  Most of them will take a couple and some provide some really nice facilities and perks.

The whole world of Assisted Living is complex.  There are many levels of care available – from completely self-sufficient to round-the-clock nursing care.

. . . and purchase in another country?

Any time you plan to travel to or move to another country, there’s a huge list of things for you to think about – a list too long to even attempt to cover here.  Expats (ex-patriots – people who still have citizenship in their native country and but live in another country) have probably written about life in any of the countries you would consider.  In many cases, their book(s) cover all the things you need to do before moving there in addition to what you can expect when you finally relocate.  Study those books.  Read blogs written by expats about the country.  Armed with all the information you can find, visit the country before moving there.

Before you do something B.I.G. . . . think about it!

Some retirees choose to relocate on an impulse – it felt so perfect when they were on vacation.  For some, that decision is the right one.  They settle into their new location, make friends and thoroughly enjoy their golden years.

In other cases, the impulse was the wrong one.  They don’t enjoy the new location because:

• the climate is wrong for them
• they can’t seem to meet new people and make new friends
• their health declines
• they miss family and old friends in the old neighborhood.

They end up spending a LOT of money correcting their errors.  Don’t be that person!

Here are some DONT’S you should consider before making that decision:

• Don’t make a hasty decision.  You should wait at least a year after retirement before making the final decision.  This provides the opportunity to find out if the climate in the new location suits you.
• Don’t act out of emotion.
• Don’t think you can escape from the real world.  It may look like your friends in Florida are living “the life” and have no worries.  But, no matter where you go, real people have real problems and real lives – so don’t let your rose-colored glasses get in the way.

The bottom line – where will you live?

Retirement is definitely not a “one size fits all.”  Where will you live; where will you be safe; what can you afford; what type of lifestyle would you like to have?  So many decisions and so many choices. You CAN enjoy your retirement.  You can do the things you always dreamed of doing – but it takes planning and some soul-searching.

Where do YOU plan to live when you retire?  Leave a comment below.