After putting in decades of dedication and hard work, sometimes the hardest decision you might want to make is whether to have chocolate or vanilla ice cream for dessert. But before you pull out the scoop, first you need to figure out where you’ll be enjoying that ice cream.
When it comes to selecting where you’ll be spending your well-earned retirement, it’s important to weigh all the options, both personal and financial.
First and foremost, take a look at where you live now.
The first question to ask yourself is if you are happy with your current location, and if you see yourself being happy there when you have more free time on your hands. Then dive into the deeper corresponding questions.
- Do you have friends and family nearby?
- Do you enjoy the familiarity of knowing where everything is?
- Do you feel safe?
- Do you already own your home, or are you close to paying off your mortgage?
If you answered, "Yes" to most of these questions, then you are not alone.
According to AARP, almost 50% of Americans between the ages of 50 and 65 say that when they retire, they want to stay right where they are, in their very own home. Not only is it easier for them to not have to worry about moving or putting their house on the market, but they can start to use their retirement funds to enjoy some of their favorite activities, such as travel, leisure, or giving to their favorite charitable organizations.
However, even when staying at home, it’s important to factor in other costs that you might not foresee. For example, it's likely that you'll need to modify your living space — installing grab bars, rails, or ramps — or need to hire a companion to assist you with home chores or be an in-home care provider.
On the other hand, roughly 40% of working Americans say that when they retire, they want to move and downsize.
And not just move around the block either — but to a new city, state, or even another country. But if you plan to retire somewhere other than your current location, there's a lot consider. Be diligent in your research.
For example, you'll want to evaluate how much property taxes will be in your new locale. Are there retirement income exemptions? Consider the overall cost of living, and more importantly, proximity to health care professionals and medical facilities. It’s important to visit the community several times at different times of the year, to make sure that the place where you'll likely be living out the rest of your years is the place of your dreams.
Of course, there are other kinds of living arrangements to consider.
If you do decide to downsize, consider a retirement community villages where living spaces have been built with seniors in mind, and there are shared activities and access to good health care. You might also consider moving in with family, if that’s the right choice for you.
It pays to take your time making this critical decision. Be sure to speak to the members of your professional team: your accountant, your financial planner, your insurance and/or real estate professionals. These individuals can provide you with the information you'll need to make the best decision for this very important step in your life.