It would be easy to pick the best place to retire, if there was a published list online. Unfortunately, the best place for one person may not be the best for another. The proverbial tropical island is always a dream, but the retiree needs to be able to either live in a grass hut and catch dinner from the sea or be able to afford a high-priced hotel.
It may not be possible to pick the best place in advance. When the retirement years roll around, the economies of different cities will change as will the needs of the retiree. Financial planning for decades, having a good retirement plan and a savings account are steps that need to be taken in advance, but choosing the place to retire may need to wait until closer to retirement time.
Some, but not all, of the things a retiree needs to consider when picking the best place are:
• Does the person want to stay where they are or move to a different city? Some people plan to stay in their current community. They may downsize and sell the family home and buy a condominium in the same general location.
Other people are looking for adventure, and if the tropical island isn’t in the cards, they are still looking for a new community that has advantages. These may be cultural such as theaters, restaurants and events or physical such as proximity to outdoor activities, beautiful views or even family.
• What is the climate? If the retiree has been shoveling snow for the past 40 years, he or she may like the idea of living in a warmer clime. After all, Florida is the proverbial East Coast retirement destination. The same can be said for people who spend most of the year in air conditioning. A cooler place where winters are mild and summers are cool may sound good.
• Finances may be a serious consideration, and retirees look for lower property prices and cheaper grocery prices. However, in many ways, finances can be adjusted. For example, the retiree can get a part time job to finance travel or a better lifestyle. They can choose a smaller residence in the city of their choice rather than a larger home in a city where they don’t want to live.
• Access to healthcare may be a major factor, especially if a retiree has been on prescription drugs, has a pre-condition or is a cancer survivor. Poor health may not slow them down much at first, but as the years pass, it could be a key aspect of their lifestyle.
• To retirement-home or not to retirement-home? That is a major question because there are pros and cons for retirement homes. On the plus side, the retiree is set for the remainder of his or her life. Most retirement homes offer meals, healthcare and access to doctors and hospitals.
They also have comfortable and attractive apartments and fun activities. However, they can be confining and many people don’t want to live with a bunch of retirees. They still like to go out to clubs at night, spend time at the beach or other locations where younger people gather.
• Consider retirement as several stages of life and not one long stage. The retiree may have 30 years left. Ten of those years may be very active with travel and adventure. The next ten years may require a slower lifestyle where visits from grandchildren are a highlight.
Finally, they may have a quiet last few years or they may have a debilitating illness. Either way, they will need regular care from a willing family member or a hired caregiver. It’s better to plan for any eventuality than to hope for the best and be caught in an unpredictable situation.
• The retiree should consider the intangibles such as political, social and religious affiliations. They may like the idea of a small, rural town where the prices are low and they can have a big vegetable garden. However, if they don’t fit in with the neighbors, they may gradually feel outcast and decide to move again. This can be a very costly mistake.
However, it is recommended to make a short list of the seemingly best places and visit them in person. People can spend a weekend looking at all the city or town has to offer and the possible neighborhoods where they may live.
Taxes are a big issue for retirees because they most likely have a fixed income. Some of the tax issues to investigate are:
• Taxes on retirement plans - Some states treat public and private pension plans differently. In some states, when pensions are taxed, other incentives are offered based on income or age. Some states fully tax retirees.
• Social Security benefits taxed - It varies, but some retirees may be required to include up to 85 percent of their social security as taxable income.
• State and local sales tax are exempted for food and medicine in some states and some have no sales tax. In some states, every penny spent will be taxed.
• Property taxes are a major factor especially for retirees on a fixed income.
The important thing is for people to be clear about their priorities. They need to take into consideration whether they want part-time work, if there is a support group for the hobby that they are passionate about, if there are worthwhile events in the locality and much more. With a little research and careful consideration, it’s possible for each person to find the best place to retire.
By Andre Bradley