The Best Place to Retire Is Your Own Hometown
With the number of stories you read about people who retire in Ecuador or France – and the proliferation of best-cities-to-retire-in lists – you might think that moving in retirement is the popular thing to do.
In fact, while it seems to be something many of us fantasize about, almost no one goes through with it.
Only 5% of seniors migrated in 2014, according to U.S. Census data. Among seniors who did move in 2014, the Brookings Institution found that fewer than 1% changed states, with the most popular choices being Florida, Arizona, South Carolina, Texas and North Carolina.
A 2015 Bankrate survey found that 60% of Americans said they wanted to retire somewhere else, but the survey included respondents of all ages. The group who was most likely to say they wanted to move when they retired was the 18-to-29-year-old cohort. Only 20% of those 65 and older expressed a desire to move.
So let’s get real: You probably aren’t going to move to a different state or city, let alone country, when you retire. But there are good reasons to be content with staying put.
If you’ve been living in the same place for a long time, you have social networks that would be difficult to leave behind and could take years to rebuild after a major move. Whether it’s your book club, hiking meetup, Bible study group or game night gang, those familiar faces whom you’ve gotten to know and enjoy sharing your interests with aren’t something you can pack up and take with you.
Beyond friendships, there’s the checker you know at the grocery store, the neighbor you chat with when you get your mail and the receptionist who has worked at your dentist for so long that you’ve watched her kids grow up. Even small interactions with people we aren’t close to, but whom we recognize as friendly faces, can make a big difference in people's sense of well-being. It also keeps them from feeling isolated, a common problem among retirees. (See Finding Your Perfect Place to Retire.)
Healthcare becomes increasingly important as people age, which means that having a relationship, ideally a long-term one, with a trusted healthcare provider becomes increasingly important. The idea of starting from scratch to find new doctors and get to know them can be really unappealing, especially for those with serious or chronic conditions who are happy with their current providers.
Having doctors you trust also means that when you need a referral, you can get one from a reputable source and not have to blindly pick from a list of Medicare providers. Unless the quality of healthcare where you live is subpar, staying in place might be the best way to ensure you get the best care as you age. (See Choosing the Right Retirement Destination.)
Moving to a place with lower living expenses, such as a state where housing costs are lower or income taxes are nonexistent, appeals to many seniors who don’t have the nest eggs they need to live comfortably and meet all their needs in retirement. But a major move might not be the best way to generate that financial security. Staying in the same home or downsizing in the same general area might be better options. (Read Where Should I Retire? and How to Retire with Just $500,000 Saved.)
Staying in the same home, especially if your mortgage is paid off, could be a great source of financial security. With no monthly housing payment, you only have to worry about property taxes, homeowners insurance and maintenance. If you’ve lived there long enough to pay off the mortgage, you probably have a good sense of your home’s ongoing and future maintenance expenses and how stable your property taxes are, which means you can plan accordingly. (See The 4 Phases of Retirement and How to Budget for Them.)
These homeownership expenses can still be too much for some retirees, however. In that case, there are two options: downsizing or securing a reverse mortgage. Downsizing will entail moving expenses and possibly other financial changes, such as different property tax rates or homeowners association fees, that you’ll need to evaluate carefully to make sure they don’t outweigh the cost savings from moving. (Learn more in Avoid the Downsides of Downsizing in Retirement.)
Getting a reverse mortgage is also associated with significant fees and is not the best way to get the maximum value from your property. All the same, these loans do make it possible to age in place and provide extra cash if you aren’t concerned with leaving your home to your heirs. (See 5 Signs a Reverse Mortgage Is a Good Idea and How Does a Reverse Mortgage Work?)
The Bottom Line
For realistic retirement planning, assume you will end up exactly where you are now or not far away. Though it may not give you the same bragging rights as making a major move in retirement would, isn’t retirement really about being comfortable and enjoying yourself? For most of us, that seems to be the case, and we get those things most easily by staying close to home. (For further reading, check out Retirement: U.S. vs. Abroad.)