Where Should I Retire: 5 Things to Think About

Retirement can be one of the best times of your life to move. You could move closer to your grandkids. You could move somewhere with more outdoor activities. Or you could relocate to the beach. Your opportunities are endless! But how do you choose where to move when you retire?

Many cities and states have unique features that make them a top place to retire. But what’s important to you? Want to be able to play golf year-round? Do you want your grandkids to experience a “white Christmas” more years than not? Considering your ideal lifestyle is key to deciding your next step.

Distance from loved ones

Do you live near your family now but want to move closer to the recreation or outdoor settings you crave? If you’re considering a move further from loved ones, don’t forget to factor the ease and cost of visiting them. This becomes an even bigger consideration when you’re living on a fixed income in retirement. Are you fine with traveling long distances for a birthday or special occasion? Can you afford to make it to your grandchild’s graduation?

If you’re ok with the idea of those trips, make sure to account for travel in your budgets. If you don’t want to miss them but your finances are stretched thin, it may be smart to consider periodic travel to the destinations you love instead of a permanent move to them. Check NeighborScout.com for statistics and information on different neighborhoods that you’re interested in.

Health care

Health care is an easy aspect to overlook when you’re retirement planning. But, it’s important to make sure you’ll have the coverage you need in the retirement destination you choose.

• If you’re under 65, make sure that your retirement destination has an adequate network of doctors and hospitals. You should also start considering Medicare options even if you’re not going gray just yet.
• If you’re over 65, keep in mind that not all Medicare plans are offered in all areas. Have you considered Medicare Advantage vs. Medicare Supplement plans? What if the one you choose isn’t available where you are thinking of retiring?

Start with research so you can know which plans are offered by what providers in different locations. Also, make sure to consider the network and local doctors and hospitals. Are you okay with those providers and facilities?

If you love your current health care coverage, be sure to contact your insurer before you move to make sure you can stay covered.

Taxes

States with favorable tax laws for retirees can help you keep your money in your pocket in retirement. Do you have a 401(k)? What about an Individual Retirement Account (IRA)? The money you take out may be taxed as income (like your current paychecks) depending on your retirement account. So which states are best for retirees?

• Seven states do not collect personal income tax. This means that the money you receive from social security and your retirement accounts will not be taxed when you start making withdrawals from your account. These states are:
  • Florida
  • Texas
  • Tennessee
  • New Hampshire
  • Wyoming
  • South Dakota
  • Washington
  • Nevada

Many other states offer favorable tax breaks for retirees, including 36 that don’t tax social security benefits.

Make sure to think about other taxes, too. Are you a big shopper? Do you want to live somewhere without sales tax? Great! There a five states you can choose from:¹

• Alaska
• Delaware
• Montana
• New Hampshire
• Oregon

Does the state you are considering have high property taxes? Not as great. When you’re living on a fixed income, these things can add up.

Cost of living

Considering the cost of living when choosing where to retire can help you spend less on expenses like your home or food. Cost of living is how much it costs to live in a given place. It becomes even more important when you’re living on a fixed income. You know New York is more expensive than Kentucky, but it’s not just because of housing. Necessities like gas, milk and clothes cost more, too.

Think about your living situation in retirement. Do you want to live in a home or a condo? Do you need extra space for when your grandkids come to visit? Do you need a big kitchen so you can host Thanksgiving? Purchasing a home or renting a condo is more expensive in places with higher cost of living. Use a cost of living calculator to compare the cost of your current location with places you are considering for retirement.

Location

Though it may not be as important for your finances, considering the climate is key for your satisfaction in your new location. What are your preferences? Hot or cold? Beach or mountains? Snow or sunshine? Or, do you like a mix of both? Try this quiz from NextAvenue.com to help determine the perfect destination spot for your retirement!

Ready to Move?

Living at a beachside bungalow doesn’t have to be a daydream! Retirement can be the perfect time to start a new adventure in your dream location. If you have trouble choosing a spot,try a good old fashioned pros and cons list to make your decision. If you don’t want to make the decision on your own, host a fun family night and talk through these considerations with your loved ones so they can help! Have some fun with your planning and check out our retirement resources if you need more guidance.

Consult with a professional tax and/or legal advisor before taking any action that may have tax or legal consequences. 

Registered Representatives offer securities through Mutual of Omaha Investor Services, Inc. Member FINRA/SIPC.  Investment advisor representatives offer advisory services through Mutual of Omaha Investor Services, Inc.

Source:
1 Moreno, T. (n.d.). Web page: Tired of Paying Sales Tax? These States Charge Less. Retrieved June 26, 2018, from https://www.thebalance.com/states-without-a-sales-tax-3193305.

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