6 things to consider before moving in retirement

If you’re looking for a new retirement lifestyle, you’re not alone.

Of those who bought new homes, 18% were younger baby boomers, aged 56 to 65, and 14% were older baby boomers, aged 66 to 74, according to the trends report. 2021 Generational Home Buyers and Sellers from the National Association of Realtors Research Group. .

They move for a variety of reasons, according to the Transamerica Center for Retirement Studies:

getting closer to family and friends (32%)

to reduce expenses (29%)

to downsize in a smaller house (29%)

to start a new chapter of life (22%)

to move to a better climate (22%)

Moving is not easy. Before moving to a new place, there are many things to consider. “Every place is different,” says gerontologist Mary Kay Buysse, executive director of the National Association of Senior and Specialty Move Managers, a Chicago-based organization with more than 1,000 members who help people plan their moves and move. settle into their new home. “There are significant differences. You need to do your homework and explore what is available in the city where you plan to live.

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For example, after searching for three years, Leslie and her husband moved from Vermont to Georgia in early 2020. They wanted to downsize “due to taxes, cost of living, and long winters” in New England. , she says. “People feel quite isolated, especially when you are older and no longer working. Very few of our friends enjoy winter sports more, and two-thirds of the town leave for warmer climes six months a year and for tax reasons.

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They sold their business and wanted to downsize and move into one house. For them, saving taxes, an active lifestyle and proximity to an international airport were priorities. Through a personal recommendation, they learned of a lake community 85 miles east of Atlanta. “This area is not in hurricane line, (it’s) close to a city and an airport,” says Leslie, who is in her late 60s. “Being active outdoors was very important. I can golf, walk and exercise year round here. They rented for four months before buying.

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As for close family, Leslie’s sister and brother-in-law had downsized and moved from suburban New York to northeast Atlanta to be closer to a son around the same time they were moving.

Certainly, the desire to live close to family, especially adult children and grandchildren, leads to some resettlement. Yet it can set off a chain of events and subsequent moves if adult children, for example, move again for work. Will the location you have chosen be a place you want to stay?

Consider a couple who moved in 1998 from New Jersey to Sun City, Las Vegas, to be closer to their adult daughter and son-in-law who were living in Palo Alto, California at the time. The couple rented in the over-55 community for a year, sold their house in New Jersey, then bought the house in Nevada, which has no income tax. (Other states with no state income tax are Alaska, Florida, South Dakota, Texas, Washington, and Wyoming.) Later, the daughter and son-in-law returned East to a career opportunity for him, and the parents continue to live in Las Vegas.

“We stayed anyway,” says Marilyn, now 88, a retired teacher. “It’s a beautiful place.” They didn’t know where to move, but she believes it’s best to live near your children as you grow up.

Whatever your reason for moving, keep in mind if the location will meet your long-term needs. Moving can be expensive and can also be stressful.

Here are six things to think about before getting started:

Cost of living in a new place. Assess your resources for retirement. What are your sources of income? What will your costs be in the new location? The cost of living exceeds that of accommodation. Be sure to include small monthly expenses such as cell phones. Other costs are all taxes (such as income, property and sales), homeowners association fees, condo fees, homeowner’s insurance, transportation, health and medical, entertainment and travel and other discretionary expenses such as gifts and charitable donations. Depending on the location, there may be flood insurance, disaster insurance, and fire insurance.

Pay for your new home. The cost of housing is generally the highest, followed, in the early years of retirement, by transportation. In subsequent years, health and medical care usually becomes the second largest budget item.

With this in mind, decide how you will pay for your new home.

“Calculate all the total housing costs in this new home,” says Robert Heck, vice president, mortgages, at Morty, an online mortgage marketplace. “Determine how you are going to pay for this house.” Are you going to move to a less expensive place? Do you have enough equity or no mortgage in your current residence to be able to buy cash? If so, you may not need a mortgage. If you’d rather use the proceeds from the sale of your current home to buy your new home, consider how you’ll invest the rest. If you don’t want to use all of the proceeds to pay for the new home or the proceeds aren’t enough, consider a mortgage. “Before you jump into the qualifying component, figure out what your budget is,” says Heck.

Retirees face certain challenges when applying for a mortgage. “The biggest hurdle is verifying their income to show lenders where their income is coming from,” says Greg McBride, senior vice president, chief financial analyst at Bankrate.com. Because they may not have their last two tax returns to qualify, “they may have to take other steps.”

He adds: “If you have documented and verifiable income, you are not limited to a particular type of loan. You must have a different paper trail to show income.

Sources of income can be Social Security, distributions from retirement accounts, and dividend income. “It boils down to your ability to demonstrate that the stated income is sufficient and sustainable.” Affluent individuals can get asset-based mortgages, McBride says.

The kind of space compared to what you had. If you’re downsizing with a spouse or partner, will you be comfortable in the new space? Remember, this is not a vacation where you can choose a hotel room or suite or rent a house for a limited period of time. If you’re used to a lot of privacy, ask yourself if you’ll really be comfortable in less space full-time, Buysse says. “How will it be to live there every day?”

The services that are offered in the new area. Before you even rent in the new location, find out about the type and quality of services available there. For example, if you choose an active adult community, when you visit ask the people who live there how it is and check it out yourself. If you are moving to a single-family home, townhouse or condominium, find out about the recreational, social, transportation and medical services available. If a place of worship is your priority, seek it out. Check with the local parks and recreation and senior services departments in the town, city or county you are moving to. If you plan to travel, consider proximity to an airport. Is there non-stop service to places you intend to visit? Will connections to international flights be necessary?

The lifestyle and state of mind compared to what you had. Carefully consider your priorities and the type of activities and atmosphere you want in a new location. What will it be like to live there full time rather than just vacationing there? If you are moving into an active adult community or any type of planned community, are you comfortable with the atmosphere, or even the general attitude? Are you looking for like-minded neighbors or is it important to you?

A “snowbird” lifestyle rather than moving completely. Maybe you like your current location and situation enough to want to stay – but you want to escape the cold winters. If so, look for places with warmer winters. Visit several places before settling on one or, if your financial situation permits, travel to warmer climates in the winter. If you want to avoid hot, humid summers, visit cooler places during the summer heat. If it turns out that you really like one of these destinations, you might be considering moving, after all.

A couple in their 60s visited California from suburban New York for a month while their granddaughter was growing up. It was an alternative to outsourcing.

Harriet Edleson is the author of the book 12 Ways to Retire on Less: Planning an Affordable Future. Former AARP staff writer/editor/producer, writes for the real estate section of The Washington Post.

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