Deciding where to live, once you are free to choose, based on preference and not work, is a big decision.
The freedom that comes from being able to live where you want, not just where you work, is very liberating for those over 60. Nearly two thirds of Americans move or anticipate moving after retirement, according to a survey by Merrill Lynch and Age Wave, a research firm focused on the aging population.
However, many factors come into play, when it’s time to decide here to live, says Kiplinger in “The 20 Best States for Your Retirement.” Being close to family members and a comfortable climate are important factors, but there are also financial factors to consider.
Kiplinger ranked 50 states for retirement based on quantitative factors, determining that the best states for retirees will have low living costs and lesser tax burdens, and quality health care options. Kiplinger also sought out states that are healthy—both economically (with well-balanced state budgets) and physically (with a fit and active senior population). They also looked at states with relatively prosperous residents age 65 and over.
The rankings can be seen from the link to the article (above), but here are the factors that should be considered when making decisions on where to relocate:
- Taxes on retirees, based on Kiplinger's Retiree Tax Map, which divides states into five categories: Most Tax Friendly, Tax Friendly, Mixed, Not Tax Friendly and Least Tax Friendly;
- The state’s cost-of-living, with data provided by Sperling's Best Places. That includes overall costs—across all age groups—for housing, food and groceries, transportation, utilities, health care and miscellaneous expenses;
- The average health care costs in retirement from HealthView Services. This includes Medicare, supplemental insurance, dental insurance and out-of-pocket costs for a 65-year-old couple who are both retired and are expected to live to 87 (husband) and 89 (wife);
- The rankings of each state's economic health from the Mercatus Center at George Mason University. These are based on various factors such as state governments' revenue sources, debts, budgets, and abilities to fund pensions, health-care benefits and other services;
- The rankings of the health of each state's population of residents 65 and over from the United Health Foundation. These are based on 34 factors, ranging from residents' bad habits to the quality of hospital and nursing home care available in the state;
- Household incomes and poverty rates from the U.S. Census Bureau; and
- Population data, including the percentage of the population that is age 65 and older, from the Census Bureau. Note that these statistics are highlighted in the rankings for the readers’ benefit, but weren’t factors in Kiplinger’s methodology for ranking the states.
Where to relocate in retirement can be a challenging decision, or an easy one, depending upon your situation. If all of your children have moved to California, you would be more likely to choose the west coast or an area that has easier access to California than New York. Do a thorough financial analysis, and make a number of visits to the areas under consideration, before putting your house on the market.
Reference: Kiplinger (May 10, 2018) “The 20 Best States for Your Retirement”