If you're retiring soon, you might want to consider a change of scenery.
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Moving to another city, state, or even country to retire in can be a great idea, especially for your wallet. Depending on where you choose to retire, you can save a lot of money on housing, taxes and other expenses. But while your potential expenses should certainly be considered when planning your move, there are other factors you should keep in mind.
GOBankingRates.com spoke to several financial and retirement planning experts to learn the dos and don'ts of retirement. Learn the best and worst things to do when looking for a place to retire.
1. Look for a lower cost of living
"One way to de-stress is to let your money go where it goes," says Aaron Hatch, CFP and co-founder of Woven Capital. "A client of mine is considering moving to Mexico so his money can go further."
According to Stephanie Genkin, a Brooklyn-based CFP, the key is making sure you can afford the three biggest running costs besides housing: health care, food and energy.
“You want to find an affordable city, especially in these areas,” he said. “You'd be surprised how many variations there are across the country. Eventually, you may stop playing golf or tennis or doing the things you did when you were early in retirement. These fees will be reduced. you will still have to go to the doctor, eat, and heat or cool your home."
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2. Provide good health care
“It goes without saying that your health deteriorates in one way or another as you get older,” says Andrew McFadden, CFP and founder of Panoramic Financial Advice. “It can be something as simple as arthritis or, in some cases, as debilitating as diabetes. You want to make sure you have quick access to highly trained health care providers when issues arise.
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The solution: Do your homework. Research nearby hospitals and network doctors to see if you have sufficient access to care.
3. Think about your safety
"Let's face it, as we get older, we become a bigger target for criminals looking to take advantage of someone," McFadden said. "That's why you want to make sure your city is known for its safety standards, day and night."
To make sure you cover all your bases, research your city's crime stats and learn about local law enforcement.
4. Make sure you're near a grocery store
How far are you willing to travel to get to the nearest grocery store? Or dry clean. Or the library?
After choosing a city, check the development of its local infrastructure. a small inconvenience can become a big problem once you move in.
"If the nearest grocery store is a 30-minute walk away, it doesn't matter if you're staying for a few weeks," says Ed Snyder, CFP and co-founder of Oaktree Financial Advisors. "But if you live there and have to do that commute every week or just run around for milk and bread, it's a lot more embarrassing."
5. Satisfy your interests
Does the city you are moving to match your passions? This consideration is essential for an enjoyable retirement, said Andrew Wang, financial adviser and owner of Runnymede Capital Management.
“The key is to assess the community and its activities before moving,” he explained. "If you're moving to a gated community where most social activity is centered on two golf courses, but you don't like to play golf, the transition can be difficult."
Google Maps will be your friend here. “Find a city that has lots of great hiking trails, great places to eat and shop with senior citizen discounts – golf courses, clubs, or whatever hobby you plan to do,” advised McFadden. "Retirement would be a shame if you stayed home all day watching TV because there was nothing to do outside."
6. Look for states that offer tax breaks for retirees
The transition to fixed income securities will not be easy. You'll need a little help to keep your finances on track for the first two years, and tax breaks for retirement can make a big difference. In fact, the best places to retire are tax breaks for retirees.
"When deciding where to retire, it's important to consider how retirement income will be taxed in a particular state, as well as other tax implications for retirement," says Medora Justus, managing director. of assets in Oxford, Mississippi. Hardy Roseau.
“Retirees should review their income and financial plan from a tax deduction perspective to accurately assess their situation,” Justus added. "By going a step further and determining the after-tax scenario for each state they plan to retire from, you can decide which move is most appropriate and cost-effective for your personal retirement scenario."
7. Research states that protect the transfer of assets after death
Retirees face the challenge of making arrangements when they are gone. And that liability can be an even bigger headache if you live somewhere that doesn't have strong laws protecting the transfer of assets after death, said Trey Henninger, author of the DIY Investing blog.
"Florida is a favorite for retirees because it has very favorable transfer laws and is a no income tax state," he said.
8. Consider government bankruptcy protections
Another thing you probably don't anticipate is financial poverty, but that doesn't stop you from considering a state with bankruptcy-friendly laws. When you give up your income and rely heavily on your savings, as you do in retirement, you naturally become financially vulnerable.
“While many states protect retirement assets, such as 401k, from seizure in bankruptcy, some states protect more assets,” Henninger said. "In some states, the house you live in cannot be declared bankrupt, regardless of its value, while others protect it up to a certain value. It may be advantageous for a retiree to settle in the state so that if a medical emergency forces him into bankruptcy, he doesn't lose his home or his retirement assets."
9. Think about transportation
“Moving to a walkable location with good public transportation, mild weather and access to entertainment is always recommended as it helps retirees stay active longer,” McFadden said. “It leads to better health for people, which reduces medical costs over time. Plus, if one of a retiree's goals is to travel, it never hurts to have an international airport nearby.
10. Schedule a test
Your recent lists of pros and cons, based on golf courses per capita and tax rates, can only help you decide if you'll really like living somewhere.
“I highly recommend testing for at least a year before taking the final step,” says Neal Frankl, CFP and WealthPilgrim.com author. “I've had several clients move to a new city because the rooms looked good or because they had family there. But your real-life experience may be very different from what you expect, and the only way to know what it will be like is to live there. So try before you commit.
11. Don't base your decision solely on family closeness
This is a mistake that financial advisors see over and over again. retirees are catching up with their much younger and mobile children and grandchildren, who are likely to move in the near future.
"While it's a great idea in some cases, their family may need to be more mobile for work or other reasons," Henninger said. “It can create a situation where a retiree moves into an area to see their family move. A pensioner does not want to chase his children across the country. Only travel where your family is for long trips…if you want to see them, that's usually the best bet.
12. Don't forget the property taxes
It's a hidden cost just waiting to show up and take a big chunk out of your savings: property taxes, which vary widely from state to state. In fact, many retirees are confused when they realize that states with low cost of living don't necessarily have such low property taxes.
For example, "Texas really has a much lower cost of living, and even though we don't have state taxes, our property taxes are generally twice as high as California," John explained. Fowler, CFP and asset manager. "Even with the higher property taxes, Texas is still significantly cheaper than California, but the sticker shock may be enough to annoy the cautious person when they get the bill."
For some, high property taxes may not be prohibitive. The key, says Fowler, is to “calculate and get a realistic idea of how much you're paying for each product or service and come up with a total. If the total amount you spend is reasonable. won't affect you, retirement plans, which means you won't have to become Walmart's bell to make ends meet, then you'll be fine.
13. Don't move just because of lack of income tax
Similarly, retirees are often drawn to states that have no income tax (including Florida, Texas, and Washington), not realizing that they can save more money by considering other factors.
"I wouldn't recommend going it alone on this basis," says Andrew Morman, CFP and founder of Modern Dollar Planning. "The benefits of no state tax may not be as great if, for example, you don't have a high taxable income in retirement or if you come back often to see friends and family. As for many other decisions, "Don't let the tax line shake the dog."
14. Don't base your decision on a vacation.
“A common mistake retirees make is returning to a place they loved as a vacation destination, not realizing that living there year-round and accepting local taxes, politics, social norms and the climate will be very different," Janet said. Growing up living aboard your motorhome.
Additionally, popular vacation spots tend to be overpriced, especially when it comes to food and entertainment. A good rule of thumb is that if it's an interesting place to visit, it's probably not a great place to stay.
15. Don't exclude rent
Retirement doesn't mean you have to become a homeowner again, in fact getting into heavy debt is a big risk when transitioning to fixed income.
"I suggest looking at the numbers carefully before buying a new home," Frankl said. "In most cases, renting a property is much more profitable from an economic point of view than buying a property. The advantage is that retirees have much more access to capital and have often more income that they can use to really enjoy their lives. . Pension".
16. Don't Think Short Term
When buying a home, remember that you're not only making one of the biggest purchases of your life, but you're also investing a lot of money and time in the city. Despite the talk of the golden years of retirement, now is not the time to really live.
"I would recommend looking at this place from a long-term perspective," said Eric Nisuarner, CFP. "Will it be appealing later in life when I have to rely on public transport or can't drive anymore?"
17. Don't rule out campuses
When thinking about the best places to retire, a college town full of rowdy students probably won't be on your list. However, there are certainly many reasons why you might consider this move.
"I think the proximity to cultural events and hospitals is obvious," Frankel said. "Moving to a college town can be a smart move because there are plenty of free activities that can boost intellectual development."
18. Don't choose your house first
"A lot of times baby boomers start by looking at homes first," says Marian Shaffer, founder of SoutheastDiscovery.com. "That should be the last step, because if it's the right house but not the right neighborhood or the right community, then it's not the right house."
19. Don't do it alone
Deciding to retire is a big one, so it helps to compare yourself to others, especially those who know the field you're considering. Reach out to local professionals and current residents and ask them questions about the housing market, taxes, and what they like and dislike about the city.
20. Don't underestimate the benefits of moving
"The biggest mistake seniors make is thinking they don't need to think about moving," says Kyle Exline, executive director of The Clare, a continuing care retirement community in Chicago. "It's important to think 10-15 years ago. Life can change so quickly and you want to make sure you have a support system when you need it most.
This article originally appeared on GOBankingRates.com. 10 best and worst things to do when finding a place to retire