Options for Retirement Living

At one time, retirement often meant moving to Florida or Arizona. Many retirees still move to warmer climates, but retirement could open the door to a wide range of options. Here are some ideas to help you consider the possibilities.

Staying Put
In a survey on post-retirement living, 53% of retired individuals indicated they were still living in the same primary residence as they had before retiring.1 Interestingly, the same percentage of pre-retirees planned to stay in their current primary residences, although many others had not yet made a decision (see chart).


Staying in your current home could be cost-effective, especially if you have paid off your mortgage or plan to do so over the next few years. However, if you have a large home or yard that requires extensive maintenance, it may become more difficult to do the work yourself as you age, so consider the added cost of paying for maintenance services.

Moving to a New Home
Among retirees who relocated, nearly two-thirds moved to a different part of the country. The most common reasons for relocating were to be closer to children or family (26%) and to move to a different climate (42%). Another 14% moved for a lower cost of living.2

If you sell your current home and purchase another one outright with cash to spare, the additional funds could boost your savings and provide additional income. On the other hand, if you have to take out a new mortgage, you may set yourself back financially. Keep in mind that condominiums, retirement communities, and other planned communities typically have monthly homeowners association dues. On the plus side, these dues generally pay for maintenance services and facilities that could make your retirement more enjoyable.

If you want to move out of state, be sure you understand the potential impact of state and local taxes on income (including pensions and Social Security benefits), real estate, retail sales, and other areas that could affect you.

Living Overseas
More than 500,000 American retirees live overseas, often drawn by the spirit of adventure and a lower cost of living.3 Some countries sweeten the pot by offering generous programs designed to attract U.S. retirees and boost their local economies.

Although your savings and Social Security payments may stretch further overseas, be aware that Medicare will not cover medical services performed outside the United States. If you want to keep Medicare, you must continue paying the premiums in order to avoid reinstatement penalties in the future. You should expect to pay out of pocket for local medical services and be comfortable with the quality of care you would receive.

Another consideration associated with living a long distance from children and grandchildren is the cost of airfare when you visit them and they visit you. If you are interested in living overseas, it might be wise to stay in the location that interests you for an extended period before making a final decision.

Where you live in retirement will be driven by financial and personal factors. As with many life decisions, the stronger your financial situation, the more choices you will have, even if you decide to stay right where you are.

1–2) Spectrem Group, 2014
3) U.S. News & World Report, May 13, 2013


The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. Copyright 2014 Emerald Connect, LLC.