Do you dream of relaxing warm beaches or scenic hikes as part of your retirement? Then you might be one of the many people considering relocating in retirement. We'll explore the major things to consider when relocating for retirement, including whether you should sell your home.
Immediate Financial Needs
Perhaps the most obvious consideration is your immediate financial situation and the cash necessary both to facilitate the relocation and to live off during retirement. It’s recommended that you have 10-12 times your annual income by retirement age and that you are able to immediately replace 60-100% of your annual income when you retire. This value could be more if it depends on your lifestyle. You’ll need more if you’re planning on traveling or if you want to contribute financially to your children and grandchildren.
Type of Living Situation
Another consideration is the type of living situation you’d like to be in. If you’d prefer to buy a new home in a different location or downsize then you’ll need enough funds for a downpayment and moving expenses. Destinations that are popular for retirees often also come with higher home prices and general cost of living expenses. The average home price in Florida is $392,904, while Hawaii is much more at an average home price of $830,193.
You may prefer the flexibility of renting instead, which would also allow you the ability to “test” whether you like a new neighborhood or state. However, the flexibility also comes with more uncertainty when it comes to rental costs and makes you reliant on a landlord. Average rent prices in Florida for example range from $1,400-1,800, while average rent in New Hampshire ranges from $1,100-$1,775.
Some choose an independent living/retirement community, which comes with the benefit of community, social activities, communal meals, as-needed care and peace of mind that you won’t need to relocate for health care concerns. The average cost of these facilities can range from $3,500-$10,500 a month.