A move can follow some of life's most significant transitions: your college graduation, your wedding day, the birth of your first child and (believe it or not) retirement.
The dream of moving after retirement may be more common than you think: Thirty-three percent of those between ages 45 and 65 anticipate a move in their golden years, according to a 2017 survey by USA Today.
Some move after their children grow up and move out. Others decide to downsize their living space to save money, relocate to be closer to family or transition to an area with a lower cost of living to help stretch their retirement savings. Moving may even fulfill a lifelong dream.
While moving away from the home you know and love is a big decision, weighing the pros and cons could help you make the right choice for your unique situation.
A Change of Scenery
There are many benefits to moving after retirement. If you're downsizing, you'll have a smaller mortgage or rent. And a smaller place also means you'll likely spend less on utilities. Those extra funds could help you build up your investments — or fund a dream vacation.
If you're moving into a retirement community, this could eliminate former maintenance needs, such as mowing the lawn, cleaning the gutters or shoveling snow — leaving you with more free time to enjoy your retirement.
Moving could also mean living closer to your children and grandchildren. If you spent most of your years before retirement working, now could be the perfect time to have some fun with your family.
And if you enjoy activities like skiing or hiking, you might consider moving to areas where these sports are popular so you can be closer to the action.
The Cost of Moving
Consider whether you will be able to afford to move after entering retirement. If you're moving to a new area, what is the average cost of living? Determine probable cost for things like accommodation, food, clothing, health care and taxes. Getting a firm grasp on these numbers will help you decide if moving is the right choice for your financial situation.
Consider the property taxes you'll have to pay if you want to own property in this new location. You'll need to have space in your budget to accommodate for this expense if you plan to move and buy property in an area with higher taxes.
Similarly, what will the health care costs be if you move to a new state? How is this state rated as far as health care providers? Does your health insurance cover the local providers? You must prepare for these concerns if a health-related issue arises.
Do you plan on aging in place? You'll have to ensure you can keep up with the costs of living in the state you worked in — and this could be difficult if you don't have enough retirement savings. Fortunately, planning for these costs could help you live comfortably in retirement.
Common Moving Mistakes
How many of your things will make it to your new home? One of the biggest mistakes retirees make when moving after retirement is taking too much with them. Give away what you don't need to your children or friends, hold a garage sale to downsize on surplus goods or donate items to charity. If you don't get rid of unnecessary things you've accumulated throughout the years, you could end up paying to store the clutter — either in a (bigger) new home or a storage facility.
Another mistake retirees make is not having a retirement budget. You might find some of your expenses will decrease after entering retirement. Transportation costs, buying lunch at work or purchasing clothes for work are all costs that will decrease — or disappear entirely. But medical bills tend to increase as people age, so it's necessary to adjust your budget to accommodate these changes.
Plan for Tomorrow
Do a "dry run" in the new area before you decide to move. Is transportation easily accessible? Can you imagine yourself being a part of the community? Take a vacation to visit the prospective place to see if it lives up to your expectations. Spend the day there doing the things you would do during your retirement.
A financial representative can help you run different scenarios to find out how close you are to reaching your retirement goals. Will you be able to have the same (or close to the same) lifestyle you had while you were working? Carefully consider how much income you'll receive from Social Security and your retirement accounts.
Moving in retirement can be a dream — but be sure to review all the aspects of your decision before making your first move. This contemplation will help you live the life you want during your golden years.