Deciding where to live in retirement

Not that long ago, The Wall Street Journal ran a story about retirement with the headline: He Says Maine, She Says Florida. It struck a chord with me. I’ve since debated the topic with my husband and referred to the piece in lectures. I’ve remembered it when talk has turned – with friends whose kids are off living on their own – to whether it’s time to start thinking about moving to a place with lower property taxes. But as Carolyn notes, it is not easy. Especially when you’re planning for two.

I recall that as the couples in my parents’ circle of friends packed up and moved – some out west, most down south – more than one came back in short order telling some version of the Goldilocks story. “Too hot.” “Too remote.” “Not just right.” Well, I’ve moved often enough to know that it’s not something I want to do even one time more than necessary. So this week, a few tips for finding a place that actually fits.

  1. Taxes: Taxes can be a big financial burden (believe me, I know, I live in New York). While I wouldn’t make the decision on where to retire based solely on taxes, they’re definitely something to consider. The best tax states from a state income tax perspective are Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming – all of which charge no income taxes. (New Hampshire, Maine, Michigan, Mississippi, Pennsylvania and Tennessee exempt some income from taxes.) Then there’s sales tax, which can make a substantial difference in your purchasing power. Five states charge no sales tax at all: Alaska, Delaware, Montana, New Hampshire and Oregon.
  2. Other costs/benefits: There are, of course, many that you may want to put on your list as you search for the best place for you. Among them, the cost of living, primarily of buying a place to replace the one in which you live now, but also the price of everything from milk to movie tickets. You don’t have to move across the country to take advantage of wild price swings – sometimes going from one county to another (perhaps a little further from the pricey metro area) makes a six-figure difference. It also pays to check out access to continuing education, healthcare, outdoor activities (if that appeals), restaurants and culture, and public transportation (for when you no longer feel like driving.)
  3. Consider staying close to home: This, according to the US Census Bureau, is the latest trend in choosing a retirement locale. And why not? Moving is expensive in and of itself – and if you’re comfortable in your longtime home there are plenty of other ways (house swapping, rent abroad for a month) to spread your wings.
  4. Try it out: The biggest lesson I took from watching my parents friends take off then return home was that any place can look good on, but you have to actually spend time there to know if it fits. That’s my plan. If and when my husband and I decide to move, we’ll do it bit by bit. First a month. Then a season. If those are working, we’ll try it for the long haul.
Jean Chatzky

About Jean Chatzky

Jean Chatzky, the financial editor for NBC’s TODAY show, is an award-winning personal finance journalist, AARP’s personal finance ambassador, and a contributing editor for Fortune magazine. Jean is a best-selling author; her eighth and most recent book is Money Rules: The Simple Path to Lifelong Security. She believes knowing how to manage our money is one of the most important life skills for people at every age and has made it her mission to help simplify money matters, increasing financial literacy both now and for the future. In April 2013 Jean launched Jean Chatzky's Money School , a series of college-style, interactive online personal finance courses that give men and women across the country the opportunity to learn from and interact directly with her. Jean lives with her family in Westchester County, New York.
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