As people approach retirement age, they often think about how they will live and finance their retirement. But there’s one equally important factor to consider that often gets missed: where to retire? For some, the answer is obvious. Surrounded by family and friends already, you might be happy to stay right where you are. But others may not be living in a location they enjoy and want a change. You might want to live in a bucket list location, be closer to family, or enjoy a warmer climate.
There are many factors to weigh in deciding where to retire. Here are some to consider as you mull your options.
Age Can Impact Where You Live
Deciding where to retire isn’t quite as simple as saying, “I have always wanted to live near the ocean.” It’s important to consider factors that weren’t part of the decision about where to live when you were younger. Then, for example, you were more likely to take career opportunities into account. Today, while lifelong learning is important, professional growth isn’t anymore.
Healthcare and medical needs change with age, too. “While healthcare is important to all, younger people generally rely on basic medical care. By contrast, retirees usually need more specialized care as they deal with the health issues that typically beset older adults,” says John Shrewsbury, a financial advisor with GenWealth Financial Advisors.
“Young people are often more concerned with a good school district, which may be reflected in higher real estate taxes. Retirees may be looking to reduce expenses, so high real estate and school taxes may not fit in their budget,” adds Wendy Brown, a financial advisor with Merrill Lynch Wealth Management.
Lifestyle Questions to Ask About Where to Retire
To help you find the right fit, experts recommend answering a series of questions that encompass everything from lifestyle to affordability. This process will help consolidate what could be a daunting list of possibilities into something more manageable.
Start with these lifestyle questions:
What are the most important things for your quality of life? For example, is it a walkable neighborhood, proximity to family, or living in a community of peers?
When you think about where you want to live in retirement, what images come to mind? “Do you see yourself in the middle of nature or rather in a big city? Near the beach or in the mountains? Are you taking this time to slow down and rest, or looking forward to new adventures?” asks Sonia Cruz Oro, a psychologist and travel coach.
What do you enjoy doing, and where can you do more of it? This one doesn’t need much explanantion. Imagine yourself hiking daily? Where can you put yourself close to nature? Or perhaps you want to spend your time visiting museums and the theater. Retiring to an urban setting will be more up your alley.
Who would you like to live closer to—if anyone—and where are they? Proximity to family is often more important as we age and could need assistance. “A good question to pose is, ‘Who will change my lightbulb?’ ” Brown says.
What type of climate do you want for this phase of life? Many people choose to head for a warmer climate after retirement, but that isn’t the only choice. What kinds of weather do you enjoy, or wish you could have more of?
What will you compromise on? “Despite what the commercials and brochures promise, it’s tough to find the perfect place. Ask what trade-offs you’re willing to make – and not make,” says Joe Casey, a retirement coach and host of “The Retirement Wisdom Podcast.”
It’s all about being able to do more of what you enjoy.
“Someone who enjoys golf will want access to a variety of courses while someone who enjoys the water won’t likely be happy retiring to Arizona,” says Shrewsbury. He adds that moving close to what you enjoy means spending more time doing the things you love and less time and money trying to reach those destinations.
Can You Afford It?
While that might seem like an obvious question, not everyone is realistic about this, says Laurence Kotlikoff, an economics professor who created a retirement planning tool. “You need to calculate what your sustainable spending will be for different dates of retirement in different locations,” he says. You might discover that you’ll need to delay retirement to earn more for your dream destination.
These questions can help you decide if your budget will work for your dream location:
What are housing costs and real estate and school taxes?
Are any of the locations on my list in one of the nine states that have no state income tax?
Be sure to look ahead into your entire lifespan, too. “Many people focus on the early stage of retirement where they are essentially like children at recess from a long school day. They look forward to travel and lots of leisure activities. But life in retirement also means dealing with aging and the health issues that are likely to accompany growing older,” says Shrewsbury.
Practical Questions to Answer
With a better sense of what makes you happy and where you’re likely to find it, move on to these questions about practical matters.
How livable is it according to AARP’s Livability Index?
Will you be close to the things you need, especially access to healthcare specialists? “Is the location a Mecca for high quality healthcare that is likely able to address your medical needs later in life?” asks Shrewsbury.
Will you be able to make new friends there? “Relationships matter. When people leave the world of full-time work and move to a new place in retirement, making new friends can be more challenging than it is for younger people. How will you find your new tribe in this place?” asks Casey.
Will it be a cultural fit for you? “Cultural differences can lead to isolation, which can trigger a number of physical and psychological issues,” says Shrewsbury.
Researching the answers to both sets of questions should generate a realistic—and shorter — list of options.
Take a Trip
Still not sure about where’s next for you? Cruz Oro recommends taking a trip — and while visiting locations on your shortlist makes sense, she says going anywhere could help provide better clarity.
“There is extensive research about and scientific proof that travel helps to achieve clarity and make better decisions. By stepping into novel environments, we activate the frontal lobe of our brain (the one in charge of problem-solving), and this will support us better when making important life decisions,” she says.
Are You and Your Partner in Sync?
Before going too far, though, check in with your partner if you have one. One of the biggest mistakes retirees make when deciding where to retire, says Casey, is presuming their partner shares the same retirement dream.
“If you’re in a relationship, remember to discuss these factors early and often with your spouse or significant other. You’d be surprised by how often couples don’t talk in enough depth about these matters—and how surprised they are to discover differences in priorities,” he says.
Taking a thoughtful, methodical approach to the “where to retire” decision can help ensure that you make the most of what can be some of the most rewarding years of your life.
This article is intended for general informational and educational purposes only, and should not be construed as financial or tax advice. For more information about whether a reverse mortgage may be right for you, you should consult an independent financial advisor. For tax advice, please consult a tax professional.