Read This Before You Relocate for Retirement
Last weekend my wife and I were watching Beach Front Bargain Hunt on HGTV when she said she’d love to relocate to the beach when we retire. Relocating to a beautiful destination for retirement is a desire I hear a lot. I love to hear her think big like this. Whether we move to the beach is unknown but the act of thinking big about relocating is a healthy exercise. It’s good to dream big when setting your retirement goals. Dreams are where all adventures start. I find many people start at “reasonable” when setting retirement goals. They settle right from the start. Don’t do this. If you have a dream of relocating for retirement explore it.
BUT….there’s always a but with us planners right. Be careful. Dreams like these have a tendency to take on a life of their own. Once the romanticized vision is planted, it’s easy to through caution to the wind and start to act before you’ve fully examined whether you truly want. it. Do this, and your retirement dream can easily become a financial nightmare.
I’m all for you living out your retirement dreams but before you commit money to your relocation dreams follow these four rules.
Don’t Buy a Lot Until You’re Ready to Build
It’s a story I’ve seen time and time again. A couple takes a vacation, falls in love with the area, takes a free tour of a community and buys a lot with the intent of building their retirement home there. Then they return home and slowly realize it was a great place to visit, but they don’t want to retire there.
In fact, I’ve seen this play out multiple times with the same couple. They ended up with three lots, in three different states and no desire to build on any of them. Now stuck with payments on land they don’t want and can’t sell. Ouch.
Get Beyond the Tourist Mindset
Spending a week, in a beautiful place, focused on fun and relaxation isn’t real life. As a tourist, you’ll likely visit, well….the tourist spots. You’ll do all the fun stuff. Don’t let your tourist fantasy drive your retirement plans. If you find a place you love make a plan to get beyond the tourist mindset.
Visit the area, during the off season. In fact, visit the area in all four seasons. The area may be vibrant during tourist season but a literal ghost town the rest of the year. Find out what it’s like when the sun and fun have died down.
Rather than stay at a vacation spot, rent a home where the locals live for a few weeks each season. Get a feel for the local rhythm and culture. Services like VRBO or Airbnb allow you to rent local homes easily.
Rent Before You Buy
Once you retire, keep your old life, while you test out the new one. Rather then make one bold move, spend time renting in the state or community you’re considering moving to. It may cost a little more on the short term but could save you a bundle if you discover that you're happier than you thought in your current home. In fact, if you discover your first relocation choice wasn’t for you, you could repeat the process while maintaining your home base.
I’m working with a client now who plans on moving cross country when he retires. Our plan is for him to keep his paid-for house and rent a home in his new location for a year or two. This will allow him to test drive his dream without burning bridges back to his current life. It’s a small price to pay to discover if the new community is right for him.
Just because you own a home on the beach, doesn’t mean family will visit more. It’s easy to romanticize that if we live someplace cool, everyone will visit us. The fact is our kids, friends and family are busy. They’ll have good intentions, but something will always come up. The reality is, they’ll visit you, because of you. Not because of your home. Also, consider that moving to a new area means leaving the support structure you’ve built up over time in your current community. If you’ve lived in one area for awhile you know the best places to shop, which auto repair shop will deal fairly with you and the best doctors. You’ll have to rebuild this network if you move somewhere new. It can be done, but it’ll take time.
A Dream Without a Plan is Just a Dream
If you’re serious about relocating someplace new for retirement move beyond a dream. Create an action plan well in advance and make your dream of relocation an adventure you plan well in advance so it can become a reality you can enjoy.