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: 6 things to consider before you move in retirement

If you’re seeking a new lifestyle in retirement, you’re not the only one.

Of those who purchased new homes, 18% were younger baby boomers, ages 56 to 65, and 14% were older boomers, ages 66 to 74, according to the 2021 Home Buyers and Sellers Generational Trends Report from the National Association of Realtors Research Group.

They move for a variety of reasons, according to the Transamerica Center for Retirement Studies:

·   to be closer to family and friends (32%)

·   to reduce expenses (29%)

·   to downsize to a smaller home (29%)

·   to start a new chapter in life (22%)

·   to move to a better climate (22%)

Relocating isn’t easy. Before actually moving to a new location there are many things to consider. “Every place is different,” says gerontologist Mary Kay Buysse, executive director of the National Association of Senior and Specialty Move Managers, a Chicago-based organization with more than 1,000 members who help people plan their moves and get settled in their new home. “There are significant differences. You’ve got to do your homework and explore what is available in the town you’re thinking of living in.”

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For example, after looking for three years, Leslie and her husband moved from Vermont to Georgia in early 2020. They wanted to downsize “due to taxes, cost of living, and the long winters” in New England, she says. “People feel quite isolated especially when you are older and no longer working. Very few of our friends enjoy winter sports anymore and two-thirds of the town leaves for warmer climates six months a year and for tax purposes.”

They sold their business and wanted to downsize and relocate to just one home. For them, saving on taxes, an active lifestyle, and proximity to an international airport were priorities. Through a personal recommendation, they learned of a lake community 85 miles east of Atlanta. “This area is not in the line of hurricanes, (it’s) close to a city and airport,” says Leslie, who is in her late 60s. “Being active outdoors was very important. I can play golf, walk and exercise year-round here.” They rented for four months before they bought. 

Don’t miss: MarketWatch’s Where Should I Retire? column

As for family nearby, Leslie’s sister and brother-in-law had downsized and moved from suburban New York to northeast Atlanta to be closer to a son at about the same time they were relocating.

Certainly, the desire to live near family—particularly grown children and grandchildren – drives some relocation. Yet, it can set off a chain of events and subsequent moves if the grown children, for example, move again for work. Will the location you’ve picked be a place you want to stay?

Consider a couple who moved in 1998 from New Jersey to Sun City, Las Vegas, to be closer to their grown daughter and son-in-law who were living in Palo Alto, Calif., at the time. The couple rented in the 55-plus community for a year, sold their New Jersey home, then bought the place in Nevada, which has no state income tax. (Other states with no state income tax are Alaska, Florida, South Dakota, Texas, Washington and Wyoming.) Later, the daughter and son-in-law moved back East for a career opportunity for him, and the parents continue to live in Las Vegas.  

“We stayed anyway,” says Marilyn, now 88, a retired elementary school teacher. “It’s a gorgeous place.” They weren’t sure where to move, yet she believes it’s better to live near your children as you grow older.

Whatever reason you move, keep in mind whether the location will meet your needs for the long run. Moving can be expensive, and can be stressful as well.

Here are six things to think about before you make a move: 

Cost of living in a new location. Evaluate your resources for retirement. What are your streams of income? What will your costs be in the new location? Cost of living is more than housing. Be sure you include smaller monthly expenses such as cellphones. Other costs are all taxes (such as income, property, and sales), homeowner’s association fees, condominium fees, homeowner’s insurance, transportation, health and medical care, entertainment and travel and other discretionary spending such as gifts and charitable donations. Depending on the location, there may be flood insurance, disaster insurance, and fire insurance.

Paying for your new home. The cost of housing is typically the largest, followed, in the early years of retirement, by transportation. In later years, health and medical care usually become the second biggest budget item.

Keeping this in mind, decide how you will pay for your new home. 

“Figure out all in total housing costs in this new house,” says Robert Heck, vice president, mortgages, at Morty, an online mortgage marketplace. “Figure out how you’re going to be paying for this home.” Will you be moving to a less expensive location? Do you have enough equity or no mortgage in your current residence so you can buy with cash? If so, you may not need a mortgage. If you prefer to use the proceeds from the sale of your current home to buy your new home, consider how you will invest the rest. If you don’t want to use all of the proceeds to pay for the new home or the proceeds aren’t enough, consider a mortgage. “Before getting into the qualifying component, figure out what your budget is,” Heck says.

Retirees face certain challenges when applying for a mortgage. “The biggest hurdle is verifying their incomes to show lenders where their income is coming from,” says Greg McBride, senior vice president, chief financial analyst at Because they might not have their last two tax returns to qualify them, “they might have to jump through more hoops.”

He adds, “If you have documented and verifiable income, you’re not limited to any particular kind of loan. You have to have a different paper trail to show income.”

Sources of income can be Social Security, distributions from retirement accounts, and dividend income. “It boils down to your ability to demonstrate the income shown is sufficient and sustainable.” High net worth individuals can obtain asset-based mortgages, McBride says.

The kind of space compared with what you’ve had. If you are downsizing with a spouse or partner will you be comfortable in the new space? Remember, it’s not a vacation where you may choose a hotel room or suite or to rent a house for a limited period of time. If you are used to a lot of privacy, ask yourself if you will truly be comfortable in less space on a full-time basis, Buysse says. “What will it be like to live there every day?”

The services that are offered in the new area. Even before you rent in the new location, research the kind and quality of the services available there. For example, if you choose an active adult community, when you visit, ask the people who live there what it’s like as well as checking it out yourself. If you are relocating to a single-family home, townhouse or condominium, find out what recreation, social, transportation, and medicalservices are offered. If it’s a place of worship that is your priority, research those. Check with the local parks and recreation and senior services departments in the village, town, or county to which you are moving. If you plan to travel, consider the proximity to an airport. Is there any nonstop service to places you intend to visit? Will connections to international flights be necessary?

The lifestyle and mind-set compared with what you’ve had. Carefully assess your priorities and the kind of activities and atmosphere you want in a new location. What will it be like to live there on a full-time basis rather than just vacationing there? If you are moving to an active adult community or any kind of planned community, are you comfortable with the atmosphere, even the overall attitude? Are you looking for like-minded neighbors or does that matter to you?

A ‘snowbird’ lifestyle versus moving altogether. Maybe you like your current location and situation enough to want to stay — yet you want to escape the cold winters. If so, search out locations with warmer winters. Visit several places before you settle on one, or, if your financial situation permits, travel to warmer climates in winter. If it’s warm, humid summers you want to avoid, visit cooler places in the heat of summer. If it turns out you like one of those destinations a lot, you might consider relocating, after all.

One couple in their 60s visited California from suburban New York for a month while their granddaughter was growing up. It was an alternative to relocation.

Harriet Edleson is author of the book, 12 Ways to Retire on Less: Planning an Affordable Future. A former staff writer/editor/producer for AARP, she writes for The Washington Post Real Estate section.

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