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Moving in Retirement Is About More Than Money

For those on the cusp of retirement, nothing says fresh start like the prospect of a new home—be it across town or across state lines. But without proper planning, the fantasy and the reality can sometimes be at odds.

Kathy Cashatt, a Phoenix-based senior financial planning specialist with Schwab, saw this with her own parents when they decided to relocate to the Ozarks from Iowa after they stopped working. “It seemed to fulfill their dream,” she says. “Then the problems began.”

While Kathy’s parents found a community where they developed great friendships, their location—far from major hospitals and airports—made it difficult to access health care specialists when medical issues arose, or for the kids to support them with their day-to-day needs. In the end, her parents relocated again—this time to Arizona.

If you’re thinking about moving once you retire, Kathy has a few other factors for you to consider:

  • Assess the scene: Restaurants, the arts, access to an airport—there’s a long list of factors that fall outside traditional financial considerations. “For many retirees, their day-to-day quality of life is going to be more important than, say, state tax rates,” Kathy says. Plus, if you’re having to travel farther for those services, it can add unanticipated expenses to your budget and limit your choices when it comes to price and quality.
  • Hedge your bets: Before putting up the for-sale sign, consider renting out your former home on the off chance you may want to return to it. Similarly, renting in your new locale can give you the flexibility to test it out before committing. “As I learned from my parents, relocating twice—especially when it involves buying and selling multiple homes—can wreak havoc on both your finances and your psyche,” Kathy says.
  • Jump the gun: With a growing number of companies now embracing permanent work-from-home policies, you might consider making the move before you retire. “Generally, it’s easier to qualify for a mortgage with a favorable rate when you still have a steady paycheck coming in,” Kathy says.

None of this is meant to diminish the bigger cost considerations of moving in retirement—from cheaper housing to lower taxes. “But with so many places to choose from,” Kathy says, “you want to make sure not only that you can afford to live in a desired destination—but also that you actually want to.”

What You Can Do Next

Read more insights about planning for retirement.

Important Disclosures

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness, or reliability cannot be guaranteed.

Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.

The Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc.


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