For many people, retirement brings the freedom to live wherever they want. No more office commute. No need to stay tied to a job location. That freedom opens up exciting possibilities, but also some big financial decisions. Where you live in retirement can have as much impact on your long-term security as how much you’ve saved.
Money expert Clark Howard often says:
“One of my key rules is you should always rent first for six months, a year or even two years if you’re thinking about relocating for retirement. If it turns out that you don’t like it, at least you’re not all-in owning a home that you’ve now got to get rid of.”
Here’s what to think about if you’re considering a move in retirement.
Step 1: Clarify Your Goals
Before you start browsing real-estate listings or packing boxes, ask yourself: Why am I moving?
- Lowering costs. Many retirees want to stretch their dollars by moving to a lower-cost area.
- Lifestyle change. Others are chasing a slower pace, more sunshine, or proximity to outdoor activities.
- Family connections. Being closer to kids and grandkids is a major motivator.
Your “why” will shape everything else. A dream beach house is wonderful, but not if it means financial stress down the road.
Step 2: Understand the Cost of Living
The number one reason retirees relocate is cost. But the cost of living isn’t just about housing.
- Housing prices and rents: Downsizing or selling a home in a high-cost market can free up equity. But if you buy into another overheated market, you might not come out ahead.
- Taxes: State income taxes, property taxes, and sales taxes vary dramatically.
- Healthcare expenses: While Medicare is nationwide, out-of-pocket costs and availability of providers vary by region.
- Everyday expenses: Groceries, utilities, transportation, and insurance costs may surprise you when comparing areas.
Clark’s advice: “When considering a retirement destination, you should consider personal factors first … There’s also no shortage of ‘Best places to retire’ kind of lists that come out all the time.”
Step 3: Test Drive the Location
Relocating in retirement is a big decision. Clark recommends a “try before you buy” approach.
- Rent for a year before buying. This lets you experience different seasons and avoid expensive mistakes. Clark’s quote above supports this.
- Visit multiple times during different parts of the year. A Florida city in January can feel very different than in August.
- Talk to locals to understand real costs, traffic, and community dynamics.
This trial run helps ensure the move is about more than just vacation vibes.
Step 4: Consider Healthcare and Aging Needs
Today, you may be healthy and active. But in 10 or 20 years, access to healthcare will matter more.
- Look at the availability of hospitals, specialists, and Medicare Advantage/Medigap networks.
- Consider whether the area offers senior-friendly services and transit.
- Factor in whether you’ll want to “age in place” or may eventually need to move again for assisted living.
Step 5: Think About Lifestyle Fit
Moving is more than money. Ask yourself:
- Will you have a strong social network? Loneliness is one of the biggest risks in retirement.
- Does the area match your interests, like golf, hiking, arts, and volunteering?
- How often will you travel to see family and friends, and how easy/expensive is it to get there?
Retirement happiness often comes down to belonging and community as much as financial security.
Step 6: Weigh Taxes and Estate Planning
Relocating can affect more than income taxes. Estate taxes, inheritance laws, and homestead exemptions differ from state to state. If you have significant assets, it’s worth consulting with a tax planner or estate attorney before making a move.
Final Thought
Relocating in retirement can be a smart move, but only if you go in with eyes wide open.
Consider following Clark’s rule of thumb:
- Run the numbers on cost of living, healthcare, and taxes.
- Rent first, buy later to avoid expensive mistakes.
- Choose lifestyle and community as carefully as you choose your financial considerations.
“Make sure that your head and your heart end up in the same place. And you do that by doing a ‘test drive’ of an area rather than just saying, ‘I’m in.’”
Where you live in retirement can make or break your financial plan. Take the time to test-drive your options, factor in all costs, and think ahead about healthcare and aging needs. That way, you’ll enjoy your retirement years without money stress overshadowing the freedom you’ve worked so hard to earn.
