What’s Your Retirement Destination?

Are you considering relocating after you retire? You are not alone—in fact, each year about 1 million Americans move following their retirement.¹ Many people dream of retiring to warm weather cities, yet the best option may include factors other than 70-degree weather.

Pursuing Hobbies and Activities

Many retirees spend their golden years in places where they can pursue hobbies and activities they love. Retirees who prefer to spend their time snowshoeing and skiing may be drawn to locations in Colorado. Some desire seaside locations such as Myrtle Beach, South Carolina or Sarasota, Florida. To find the right location for you, plan a trip to a spot where you can enjoy your hobbies and see if you can picture yourself living there.

Considering the Cost of Travel

It can be important to consider the travel costs when deciding on a retirement destination. Choosing to live closer to family members may mean more opportunities to visit and fewer miles to drive or fly, but it could mean making compromises about retirement living. Alternatively, choosing a distant retirement location could involve more frequent air travel and increased cost of lodging when you do visit family members.

Planning to be a Snowbird?

A snowbird—spending your winters in the south and summers in the north—could involve purchasing your desired retirement home while keeping your current home. While this might be a more expensive option than retiring locally or moving to your retirement home full time, it can offer retirees the best of both worlds.

Minimizing Taxes

Taxes can have a big effect on retirees’ budgets, particularly for those living on a fixed income. It is important for retirees to understand their tax situation for each location they consider. For instance, while Florida and Texas constitute two of the seven states that do not levy a state personal income tax, these states do tax part of retirees’ retirement income and dividend payments. Alternatively, Pennsylvania exempts retirees’ retirement income from their state income tax, and New Hampshire only taxes retirees’ dividends and interest income. Therefore, it is also important to consider the tax implications of your retirement home before your move.

Choosing your next destination can be an exciting way to begin the transition to retirement but take some time to decide what’s most important to you. As you think about where you want to retire, talk to a Jemma Financial Advisor. We can review your investment accounts, along with your financial goals, to make sure you are on the right path.

¹“The Go-to Guide on Relocating After Retirement,” North American Moving Services.