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Dream Retirements Reconsidered

When deciding on the ideal place to retire, a little homework can spare you a lot of headaches

By Christine D. Moriarty

When it comes to where to retire, people often get caught up in the illusion, rather than the reality. Before making a commitment to move, understand this change is a fine mix of dreams, practicalities and your vision.

You can find your perfect mix when you consider all the factors, beyond the weather, amenities and proximity to friends.

Adirondack chairs covered in snow. Next Avenue, retirement planning
You can discover your perfect retirement when you consider all the factors, beyond the weather.  |  Credit: Getty

With an ocean of options, how do you decide? Consider your vision and your wants and needs, because none of the "Best Places to Retire" lists can consider your personal likes and dislikes. Also, there are practical and financial considerations to recognize.

Here are three dreams that disappointed many newly minted retirees:

1. Live Near Your Children

You finally have time for family time. You want to be available to your children and more engaged in their lives. Best of all, if you are lucky enough to have grandchildren, you desire to get to know them better, even teaching them things your grandparents taught you.

There are some valuable conversations you need to have with your children before you put up that "For Sale" sign and look for a place nearby. As your children are working with full schedules, plan time for a serious chat. This important conversation is so you can understand their life a bit more and learn what works for them.

Ask yourself if you like the area enough that you would move there if your child was not there.

Some conversation starters are: How does your child and their family fit you into their life? Do they want you around more often? Are they worried about the time and energy of being with you? Or caring for you eventually? You may be healthy now, but such an issue may be on their mind.

Then, ask yourself if you like the area enough that you would move there if your child was not there. Is the community a good fit? The weather? The available activities?

If you do make the move, remember that your adult children had a routine and schedule before you got there. When you arrive, create a life without them as much as with them. Retirees who settle in and focus only on family often feel lost 10 years down the road when the toddler grandchildren who they saw everyday grow into teenagers who prefer to be with friends. If they end up moving away for college, you will see them even less.

Prepare for change, just in case. A job transfer, career change, corporate merger or any number of other life-disrupting events may lead your child's family to relocate in coming years. Would you feel you had no option but to follow them again? Or could you stay put because you had built a community that would let you confidently live on your own?

A couple bought a condominium in Arizona in anticipation of their retirement one year out and enjoyed the vacation time they spent with their children and grandchildren before they retired. Three months after they retired and moved, their son-in-law's company transferred him to California. The couple was left alone and reflecting on the possible need for another move.

2. Move to a Favorite Vacation Area

Vacations are freedom from everyday life. It's easy to dream of retiring in your favorite vacation spot. Before committing to a location, stay longer than usual. Rent a home for a month, a season or a year. Explore the area as a local.

Do not forget seasons. Spend a winter at the lake or a summer at the ski resort before committing to buy.

Just because you like to vacation somewhere does not mean it is the ideal retirement home location.

Just because you like to vacation somewhere does not mean it is the ideal retirement home location. Many people move twice because they thought they knew what they wanted. And moving is expensive. The average moving company bill for a 1,200-mile move is $4,000.

One couple made a quick decision to sell their home without thinking it through. As soon as the sale went through, they went to Florida and bought a condominium in an area where they spent their annual vacation.

They discovered they bought in a rental area, not a residential area, so making friends was difficult and some services limited. A year later, they moved to another area, incurring moving costs and Realtor fees again.

Emotional and personal reasons for moving are important, but so are costs such as taxes. If you change residency to a new state, consider the cost of new car registrations and legal fees for an updated estate plan. Explore the true costs of the area you want to move to, so you avoid surprises.


3. Head for the Border and Skip the Country

The grass always looks greener ... and that applies whether you are considering Canada, Mexico, Europe or beyond. In the excitement to retire, many people only consider the big picture of what looks good rather than practicalities of an international move.

If you are moving for cultural immersion, understand many of the places that attract you also draw other Americans. The good news: you can associate with people who share your experience. But by sticking together, you are less likely to be treated as a local than foreigners who assimilate.

There is the legal side of residency. Understanding how you can live in a country long-term is essential, so check out the visa process. A country may or may not make it easy for U.S. citizens to immigrate. For example, Canada recently forbid foreign nationals to buy property for two years.

"The tax situation may be higher than anticipated, offsetting the lower cost of living."

The cost of living is one reasonable draw to live outside the United States, yet there are other financial considerations. "Retirement income will be 100% taxable by the U.S. and perhaps additionally in the country you move to," says Malissa Marshall, a Certified Financial Planner in Bristol, Vermont.

"The tax situation may be higher than anticipated, offsetting the lower cost of living," she emphasizes.

You may want to hire a tax professional in the country you are considering and one in the U.S. before finalizing any plans. An international expert can explain the reality in a short time.

Consider Health Care Abroad

Then, there is the issue of health care and insurance, especially if you do not pay for the Medicare premiums while you live abroad. If you ever return to the U.S., your Medicare insurance premiums will be permanently higher. Medicare charges a premium penalty for the months you did not pay but were qualified, even if you were covered overseas.

Finally, due to the reality of having lived through a pandemic, we have all come to understand living out of the country in a new way. Would it be OK with you if you could not cross the border to go home to be with loved ones or vice versa?

If you keep the above in mind, the facts and fiction of retirement location will be clearer. As you consider each possibility, be prepared to adjust dreams and make tradeoffs. Knowing the actual cost of your choices will make your retirement more like the fairy tale you want.

Christine D. Moriarty
Christine D. Moriarty 

C.D. Moriarty, CFP, is a Vermont-based financial speaker, writer and coach. She can be found at
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