Maybe you’ve spent your life moving around, or maybe you’ve lived in the same place for years. Regardless of how many moves you’ve made throughout your lifetime, there’s one more important move you may be considering: relocating to where you’d like to retire.
Whether it’s a dream destination you’ve seen once or a cozy spot that will make your retirement savings go further, there’s a lot to consider when deciding where to spend your golden years. Here are 11 mistakes to avoid while you get ready to map out your perfect retirement destination.
Not factoring in moving costs
One of the costly retirement mistakes people make when picking their forever home is failing to fully plan out the expenses involved in a big move. Although the destination itself might be affordable, a cross-country move may not. If you plan on retiring in Florida but live far away, then you should take into consideration what it requires financially to get there.
According to HomeAdvisor, on average most people spend between $2,300 to $6,100 on a cross-country move, depending on how much stuff they have, how far they go, and how much help they hire. Assuming you’ll have a fair amount of stuff and a need to hire some people (or at least rent a moving truck), you’ll want to include these expenses in your retirement planning. That doesn’t mean a long-distance move like Florida can’t happen, it just means you’ll need to plan for it.
Deciding too quickly on your new home
Another common mistake that happens? Deciding on your retirement home too quickly. Although you might think a house is perfect after a visit or researching online, it’s important to spend some real time there before deciding to relocate. Taking your time to get to know a new place will not only help you decide whether it's a good fit, but it will also help you pick exactly where in that new town or city you might like to live.
Spend some time exploring various neighborhoods or apartment complexes. If you pick the wrong neighborhood or the wrong house, you may face yet another move in the near future. Buying and selling too quickly will likely cost you more money, so you’ll want to really feel good about the exact house or apartment and its location.
Picking based on price, not on lifestyle
Unlike those who may decide on a retirement destination without considering the cost, there’s also such a thing as going too far in the opposite direction — that is, picking the most frugal place to retire without considering your desired quality of life. Just because you’re retired and budgeting has become more important, doesn’t mean you won’t still want to maintain a certain lifestyle, hobbies, or activities.
Maybe you enjoy taking long bike rides or having access to good natural grocery stores. Start by making a list of your lifestyle must-haves and then spend some time making sure the places on your list of possible locations can meet those requirements. Remember, retirement should be affordable but it should also be enjoyable. You didn't spend all those years saving for retirement for nothing! (Plus, there are even some affordable cities that have great sushi.)
Not experiencing all four seasons
When picking a place to retire, you’ll want to be sure you really know what that place is like. Meaning, you’ll probably want to visit it in all four seasons. Maybe you’ve been to a particular town in summer and fallen in love, or you’ve fallen in love with one of the cities that shine in the shoulder seasons, but what’s that place like the rest of the year?
The only way to find out is by spending a bit of time in your dream destination during every season. That means seeing it as its best and at its potential worst. After all, if you’re going to live there for years, you might as well make sure its a place you really want to be year-round.
Being too far away from healthcare services
You might be healthy as can be right now, but that could change. This is why it isn’t always the best idea to live way out somewhere you can’t easily access health care services. You’ll want to be sure your new home isn’t too far away from a doctor’s office and even some sort of emergency services like a hospital or 24-hour clinic.
If you have existing health problems, make sure you’ll have access to the specialists you need within close proximity. The last thing you’ll want to deal with when sick is driving four hours to see a doctor or having to make that commute regularly to get the care you need.
Being too far away from basic services
Another thing to keep in mind when picking your new place is how far you’ll be from other basic services like a grocery store, bank, pharmacy, and even the post office. As you age, you might find long drives less feasible and it may become preferable not to be too far from the basic things you’ll need on a regular basis.
Make a list of your weekly outings and appointments and make sure the place you pick puts you within a reasonable driving distance of those services. Also, keep in mind that eventually, someone else may be driving you to those destinations. You could be saving your future self money on taxis or just simply doing that future friend a favor by living close to the things you need.
Not factoring in distance from relatives
If you have any friends or relatives you like to see on a regular basis, it’s important to take this into consideration when picking a place to retire. Maybe you’re OK right now with the idea of living far away because you’d easily be able to make the distance work by driving or flying. But will that always be the case?
As you get older, your health and finances may not allow for the same pace of travel. This is why it’s important to consider the proximity of the people who matter most before making a move that might limit how much you’re actually able to see them.
Moving too close to family
On the flip side, you don’t necessarily want to become next-door neighbors with your family members. Although you might have a great relationship with your immediate family, there is definitely such a thing as spending too much time together.
If you like the place where your family lives, and it checks a lot of your boxes, that might be enough to make it work. But picking your retirement destination exclusively based on proximity to family could backfire. Remember, choosing a place to retire should be a holistic decision, and making that decision based on one reason alone (even if that reason is family) may not be the best way to go about it.
Not understanding the full impact of taxes
Wherever you decide to move, make sure you’ve done some tax planning first. Although moving to a state with no income tax might sound appealing, that’s only one piece of the puzzle when it comes to taxation laws and your potential tax burden. In fact, many states don’t have tax retirement benefits, and others (income tax or not) have significantly higher property and sales taxes.
And it's not just your destination state you’ll want to consider, but also the state you’re moving from. For example, you could end up paying capital gains tax when selling your current house. If you like where you are enough, a hefty tax bill could mean you should consider just staying put in retirement.
Before making any moves, be sure to familiarize yourself with all the tax implications, both in your current state and in the state in which you plan to move, and then make sure you can afford them.
Romanticizing a location
Maybe you think you found the absolute perfect place for retirement, but it’s important to make sure you’re basing that off real information — and not just romanticizing the place. It’s easy enough to visit a place for a short time and then make it into an ideal destination in your mind. But picking a good retirement location is about balancing a myriad needs that are both financial- and lifestyle-related.
If you think you’ve found a place you’d love to live but haven’t quite figured out how you’d make it work when it comes to the money, think again. There are a lot of great places to retire, but the one that will make you happiest will provide an affordable lifestyle and all the other elements you need for a happy retirement — and finding that should be your primary focus, no matter how pretty some other place appears to be.
Not considering your social life
Maybe you’re a social butterfly — or maybe not so much. At this stage in life, you know yourself and your needs well enough, and who you are likely isn’t going to magically change once you retire. That being said, be sure to pick a place that fits with your social life and needs.
If you thrive in communities, don’t switch to living alone in the woods. Conversely, if you hate game night or having the neighbors drop by unannounced, maybe pick a place with more privacy. Or if you know your favorite way to socialize is to play pickleball, don’t move to a town without a club or public courts.
Before moving to a new spot, it’s important to consider the specific kind of social life you’d like to have and pick a setting that helps you live it.
Choosing a place to retire is probably one of the biggest decisions you’ll ever make, and it's important to take the time you need to pick wisely. Choosing in haste could turn into a costly mistake. After all, you spent time learning how to invest money for a reason. When it comes to how to manage your money, taking your time with your decision could be a major component.
Start by making a prioritized list of all the things you’d like to have in a retirement location, then visit a few top destinations (during different seasons) with that list in mind. Although you might not find the absolute perfect place, aim to pick something that meets the majority of your needs, and that will grow with you as you age.
Making a big move is never easy, but by prioritizing your wish list, you’re much more likely to end up in a place that keeps you happy in the long run.