5 things to consider before relocating


Ah, you’ve finally made it to retirement. A time to relax, to do what you want, go where you want, and live where you want.

Many people who have been tied to one location because of a job or kids’ schools are thinking of relocating to another part of the country, or even a foreign country, when they retire. Certainly moving to a less expensive region can offer savings in living costs, housing, and taxes. But the decision of where to settle down in your golden years should be made thoughtfully, and include consideration of multiple factors.

A survey by Bankrate.com found that 60% of people ages 50 to 64 would consider moving after they retire. But the decision of where to live is an important one and affects your future lifestyle, quality of life, and health, as well as your finances.

It’s tempting to pick a place because you liked it whenever you went on vacation, or because the living costs are a fraction of your present costs. But picking a place to live is more than just a financial decision. Many people fixate on one reason for choosing a locale, such as low taxes.

Certainly, you should familiarize yourself with the tax rates at your prospective new home. Some states have more lenient tax structures than others. Some are more retiree-friendly than others. Some imposes taxes on all retirement income, and some have few or no taxes on pensions and Social Security.

Also check the taxes in neighboring states. You might find a state next to the one you’re considering, with similar living conditions but a lower tax rate. For example, if you’re thinking of settling in eastern New Mexico you’d be looking at up to 4.9% in state income tax, but by living in western Texas, which has similar weather, you’d have no state income tax.

Here are some other things to consider when picking out a retirement destination:

1. Total taxes. You should look at the total tax situation. States that have no income tax must make up the revenue in other ways, often through sales and property taxes as well as inheritance and estate taxes.

2 Other expenses. Besides taxes, there are other living costs you will need to keep in mind as you browse locations. For example, Alaska has no income or sales taxes and no taxes on pensions or Social Security. But its remoteness makes the cost of living 30% higher than the national average. You can compare the living costs in different locations using the Numbeo site.

3 The cost of moving. You’ll need to factor in costs of packing up, selling your house if necessary (or maintaining it if you plan to keep it), moving, and settling down in your new location. Depending on the distance, the moving cost could be substantial. You’ll want to figure whether the costs saved by living in a less expensive area make up for the costs of moving. You can estimate your moving costs at moving.com.

4 The living environment. Inspect the surroundings in your prospective new home. Is the weather to your liking? Ideally, visit the area at various times of year to get a full appreciation. One couple moved from New England to Florida because they had vacationed there in January and February. But the heat and humidity led them to move back after just one year.

After living for decades in one climate, can you easily adapt to a very different one? Also consider the cultural and political environment. If you like concerts, or art exhibits, or volunteer opportunities, are those amenities readily available? Do the local residents’ values align with yours? Do you think you could make friends easily?

5 The local facilities. Consider whether the new location has what you need. If you like to travel, is there a major airport nearby? How easily can you visit relatives and old friends? Also, how are the local healthcare facilities? Eventually, most people need more healthcare and assistance with everyday tasks as they get older.

In the end, deciding where to live in retirement can be subjective and as much an emotional decision as a financial one. Many people choose to settle in Hawaii, despite the high taxes and living costs, because they love the scenery and surf. You will just want to consider all relevant factors when choosing your ideal retirement location.

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