Many people envision retiring to a beachy paradise. And, it’s true, warm states like Florida, Arizona, and North Carolina are seeing an influx of new faces, many of them retired. However, according to US census bureau data, only about 4% of Americans aged 65 and older move each year.
What are some things to consider before moving in retirement?
Support system: Who will help run you to the doctor or hair dresser if you are feeling poorly? Do you have a strong network of friends or family in the place you are considering living? Remember, a support system is more than one son or daughter. Your friends, doctors, book club, mechanic, and professional network all help increase quality of life.
Will the support system move? A lot of seniors relocate to be nearer children or grandchildren. While nothing is guaranteed, if you know those family members have a high chance of frequent moves themselves (military, professional athletes), you may not want to make permanent housing decisions based on your kids’ current location.
Cost of the move. In May 2014, the American Moving & Storage Association, the average cost of an intrastate move is $1,170, and the average move between states costs $5,630. (Both numbers are based on an average weight of 7,100 pounds.)* How will this extra cost affect your total retirement picture?
It’s never good to let the tax tail wag the decision dog, but many people move from high-income tax states (New Jersey, New York) to lower (and warmer) ones in retirement. If you have $100,000/year in taxable income, that move from New York to Texas could save you up to $8,000/year in income taxes. Of course, states who have no income tax must get revenue somewhere, so look out for higher property or sales taxes in low income-tax states.
For a fun read on places to retire in 2015, check out the following article.
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