Many people are re-evaluating their life plan. I think a few months of lock down will do that to a person. People are getting out of cities and heading for wide open spaces and a quieter pace of life. Others have realized the desire to get closer to family. Maybe you have a good base of friends where you live now, but your children have moved away? As they continue to grow families of their own, a thought may cross your mind-- should we move closer to our children (and grandchildren)? If so, what are some financial considerations to keep in mind?
Consideration #1: Cost of Living
Do a cost-comparison between where you live now and the area in which you’re considering moving. What are real estate prices like? You’ll want to determine how monthly expenses like health care and insurance will vary as well.
Check out local restaurants, grocery stores, shops and any other daily expenses that will impact your budget.
Consideration #2: Housing
One of the biggest considerations you’ll need to make is what your living situation will look like. You will want to weigh the pros and cons of renting versus buying a home and if you will live there year round or seasonally. When you’re looking for housing, you’ll also want to consider functionality. Will you be hosting celebrations and holiday dinners in your home, or do you primarily plan on spending time over at your family's place? If so, then you may find it best to downsize to a condo or apartment.
If you want to be able to have grandchildren sleepover, host Thanksgiving dinner and entertain friends and family, then you’ll want to look for a piece of property that can accommodate your needs.
Consideration #3: Resources & Discounts for Retirees
Some areas offer resources for senior citizens and retirees, such as community centers, programs and volunteer opportunities. If staying active in your community and connecting with other retirees is a priority, you’ll want to check ahead of time to see what opportunities are available to you.
Additionally, you may find that the area you’re moving to offers added perks for seniors, such as discounts on public transportation.
Consideration #4: State and Local Taxes
If you’re considering staying in-state, checking into what your state and local taxes will look like may not be a top priority. But wherever you’re considering heading to, check into what you can expect your taxes to look like. In addition, you’ll want to look into other tax obligations including sales, property and estate taxes. Depending on where you move to, taxes can vary greatly across the board.
If you’re struggling to determine whether or not you should move, or if your budget will allow for it, you’ll want to speak with your financial advisor. Together, you can determine the best decisions for living comfortably in retirement or so you stay on track for your retirement if you are still working. And if living near your children is a big priority in retirement, weigh the pros and cons and talk to your loved ones to see what the best next step should be.
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.