How to Decide Where to Retire

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wheretoretire“When deciding where to retire, the focus should be on keeping all the factors in balance,” says Charlie Rocco, the Vice President of Rocco & Associates Wealth Management. Rocco points out that deciding where to retire can be one of the most important decisions you make about your future, since it impacts your financial situation as well as your quality of life.

“The amount of income required, taxes, Social Security amounts, cost of living, and other factors all need to be weighed against each other,” Rocco continues.

As you consider where to retire, here are some of the things to keep in mind:

Cost of Living

Once you retire and your income changes, the cost of living becomes increasingly important. Many retirees are on fixed incomes, which means that one of the most important factors is how much it will cost in one area of the country over another.

“I had a client who retired to the South,” says Rocco. “The client was from New England, and that meant the tax bill went from over $25,000 to $5,000.”

And, of course, there are other cost of living savings available in the South as opposed to New England. In almost every area of expense, the cost is lower in many Southern states than what you would expect to pay in New England states. From housing to food, moving to a less expensive area can make sense. When comparing mortgage costs, a tool like Quizzle can help you identify different loan options in your new area.

This is even true of leaving the country. Some retirees are moving to countries in Latin America, like Belize, that offer services to Americans without costing a great deal of money. As you decide where to retire, cost of living should be one of the first things to look at. You need to look at cost of living in context of the size of your nest egg, your Social Security benefits situation, and other sources of income you might have.

However, it’s not the only thing to consider.


“How close do you want to be to family?” asks John Graves, a Chartered Financial Consultant. He points out that you need to consider how easy it is to see loved ones when you make the move. For those who still want to be part of the family circle, moving far away — even if the cost of living is lower — is not an option.

He points out that you need to decide the level of interaction you want with your current friends and family, and how your location plays into that. For some retirees, being a plane ride away is no obstacle. They are happy to visit with family once or twice a year, and living in an area with a low-cost of living makes travel affordable.

Other retirees, though, don’t want to miss the joys of watching their grandchildren grow. They want to be close, and involved. This might mean paying a little more, but the emotional returns are high. You need to figure out what type of social life you want, and who you want involved, so that you can make decisions based on your level of happiness. Retiring isn’t just about finances.

Attitude and Activities

Graves also points out that you need to figure out what else you want to do during retirement. How involved do you want to be with your community? Do you want to be involved with politics? Do you have a hobby you want to pursue? What about the idea of working part-time, or starting a new career?

Think about what you want to do during retirement. If you are active in your church, and you move to a city without a congregation that you can get involved with, it can be difficult to enjoy yourself in retirement. If you want to develop your love of sailing, it doesn’t make sense to move to an area that’s landlocked.

Your quality of life matters a great deal when you retire. The key is finding the balance between what it costs to enjoy your quality of life, and making sure you can afford it. Look carefully at your options so that you have an idea of what to expect, and get creative about where you retire.


Finally, you need to think about your health. Moving to a low-cost country in the developing world might mean that you won’t have access to all the health facilities you need. “With health care expenses increasing with age, it is important to not just consider how much you need a year in retirement to sustain the lifestyle you desire,” Rocco points out. “You also need enough saved and the right mix of insurance and liability protection to help you stay on track during the tough times.”

If you have good health, you can afford to take a few more risks with where you live. However, your health might also dictate the type of climate you can tolerate, as well as the level of assistance and type of facility you need to live in. If you are in good health, you can usually live independently, wherever you can afford.

Some retirees start out by enjoying their adventures early on, living in low-cost places with few services, at first, while their health is still good. Later, as they age, it might become necessary to move back to an area with more services and facilities. If you plan it right, you can save money living in low-cost locales during the first part of your retirement so that you have more money later, when you might need to pay for a more expensive arrangement.

What are your plans for retirement? How will you decide where to live?