As retirees embrace their new life stage, many of them consider relocating to other locales. In fact, almost two-thirds of retirees plan to move or do move in retirement.1 While retirees move for a variety of reasons, relocating in retirement carries significant financial obligations. And a common reason for retirees to move is to be closer to family. If you’re exploring retiring closer to your grandchildren, here are some key financial items to consider.
1. Analyze the cost of living in your family’s locale.
Moving to another part of the country isn’t always an apples-to-apples change. Analyzing details like cost of living is essential. If your grandchildren live in an area that is more expensive, you could risk drawing down more from you retirement accounts than you originally predicted. By doing so, you could also trigger additional taxes. The ability to afford your new locale is critical to ensure you don’t outlive your retirement assets.2
2. Consider renting for a short term before moving.
Before you lock yourself into a move that takes you away from your comfort zone (and can be expensive) consider the option of temporarily renting a home. By doing so, you get to experience living in the new location on a trial basis without jumping immediately into moving and buying a new home. Permanently residing somewhere creates different day-to-day realities than when you’re a temporary guest visiting your family and grandchildren. Renting will help you minimize your financial risks while making sure the new location truly suits your lifestyle needs and values.3
3. Identify your budget and ability to afford moving.
The emotional desire to be near grandchildren can potentially override the logistics and expenses involved in moving. Before you officially commit to relocating closer to your family, truly analyze your budget to ensure you can afford the costs. Moving isn’t a cheap process, as you must pay for a variety of needs, including moving assistance. In order to not prematurely dwindle down your retirement savings, look at your financial life and needs with an honest analysis on what’s possible.4
4. Determine whether you need to work to support your new locale’s cost of living.
If you choose to move closer to grandchildren even if your cost of living will increase, you may want to consider working part-time. Doing so would help you avoid spending your retirement accounts more quickly, and help you meet people and form a new social network.5
Your retirement goals, financial needs, and lifestyle preferences will further guide if moving closer to grandchildren make sense. If you’d like to explore your financial details and if relocating is a viable option, we’re happy to have the conversation. Please contact us, today.
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