According to a 2015 Bankrate survey, half of 50-64 year-olds (those who are most likely to be planning for retirement) would consider relocating once their working days are behind them. If you fall into that demographic and you’re thinking about retiring in another location, what factors should you consider before you move?
Taxes and finances
One of the biggest costs to ponder before moving to another state is taxes — income tax, sales tax, property tax and death tax. For example, a state with a lower property tax may have a higher sales tax rate. Some states, however, offer tax breaks on retirement income such as social security or provide senior-specific tax breaks.
In addition to taxes, the cost of daily life may be different in your new locale. Home prices, groceries, utilities, transportation and health care costs vary state-to-state. Placing your retirement yearly income into a cost comparison calculator can give you an idea whether your desired location is even feasible before you invest time into searching for a new home in that area. It might be worth your time to extend a vacation or spend a few weeks to a couple months in your prospective new city to get an idea of what your potential budget would be.
Keep lifestyle changes in mind as well. For example, moving from a city where you regularly relied on public transportation to get you from A to B to a suburban retirement community could result in the added expense of buying and maintaining a car. You will also need to increase your travel budget, if you’ll be moving somewhere that requires air travel to visit family and/or friends.
Health — physical and mental
If you plan on using Medicare, retiring on certain islands or in South America may be something to reconsider because Medicare is only available to seniors living in the United States. You will have to purchase private health insurance or buy into your new country’s insurance plan, if it’s even possible. And even though Medicare is available nationally in the U.S., there are different regulations from one state to the next.
A move to Florida might sound like a great idea when the winter chill hits your bones, but can you handle extreme humidity and heat in July and August? Experts recommend visiting your new potential hometown during different seasons before moving to ensure you feel comfortable in all the elements.
Since moving at any age involves reestablishing your life and building a new network, it’s important your prospective location has many interests in which you can engage, especially with your extra time outside of full-time employment. Are there outlets for your hobbies, cultural events or volunteer activities you would enjoy? Do your friends or family live nearby? Is there a strong economy if you decide you want to start working part-time? Having opportunities to stay engaged is imperative to your health, as explained in a 2013 study by Rush Alzheimer’s Disease Center in Chicago which found that highly social seniors had a 70 percent lower rate of cognitive decline than their less social peers.
On the move
All of the usual costs of buying and selling a house apply when relocating. From paying a realtor to sprucing up your home to sell, to mortgage expenses and renovations when you buy, the costs can quickly add up. Take into account the extra cost of hiring movers to go across state lines and the cost of traveling to shop for your new home. On the flip side, if you move to an area with a lower cost of living or plan to downsize, you’ll be able to offset costs and potentially even build your savings.
As always, First Internet Bank is able to provide service wherever you may retire. Contact us today at bank@firstib.com or 1-888-873-3424.
