Retirees aren't moving to new places as often as they have in the past. Just 3 percent of people age 65 and older relocated between 2010 and 2011, according to recently released Census Bureau data. "Their 401(k)s have taken a dive, the housing market fell, and people who once thought they might have been able to retire and move are now not doing so," says William Frey, a demographer and senior fellow at the Brookings Institution. "We're at the lowest level of migrations since the end of World War II." But some seniors continue to seek retirement spots with more affordable housing, better weather, and fun things to do. Here are 10 tips for selecting a great retirement location.
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Affordable housing. Selling your current home and moving to a place where housing costs significantly less could give your nest egg a quick and significant boost. Carolyn Kauffunger, 71, a native of Boston, moved to Pittsburgh during the final years of her career and decided to stay for retirement. "The housing stock is very affordable here," she says of Pittsburgh. "We would never be able to afford our house in Boston." The median home price in Boston was $329,000 in 2010, more than three times as much as the $97,900 median home price in Pittsburgh.
"If you own a home in California or New York, you can cash out on that and use that money to move to an affordable place," says Frey. About 125,000 people age 65 and older say they moved someplace new in 2011 in search of cheaper housing, the Census Bureau found. In 2010, the median home prices in San Francisco and New York City were $635,000 and $457,000, respectively. If you sold your home in one of these pricey cities and relocated someplace less expensive, you could free up cash for other retirement expenses. Homes cost a fraction of that amount in places like Columbia, S.C. ($144,950); Memphis ($71,000); and Cape Coral, Fla. ($86,916).
Lower taxes. Tax rates vary considerably by state, and moving to a place with lower taxes could increase your spending power. There are seven states with no income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. Additionally, New Hampshire and Tennessee tax dividend and interest income only. There are also fives states that don't levy a sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. The taxation of Social Security and pension benefits also differs by state. However, states without these taxes often have above-average property tax rates, so it's best to run the numbers based on the sources of your retirement income.
Better weather. Many retirees choose to spend the coldest winter months in a sunnier climate or permanently relocate to a place with better weather. Approximately 30,000 seniors moved in 2011 primarily to live in a better climate. The Phoenix metro area, which is sunny an average of 85 percent of the time, saw an average net gain of 14,233 people age 55 and older annually between 2008 and 2010. Riverside, Calif., the second-sunniest city in the country, brought in an average of 8,393 older residents each year over the same time period.
Recreation and culture. Throughout much of your life, your career dictates where you live. Retirement allows you the freedom to select a desirable place to live, whether than means surrounding yourself with golf courses, art galleries, water views, or hiking trails. Linda Nelson, 63, a retired teacher's aid in Pataskala, Ohio, spends part of each month in a mobile home community in Gatlinburg, Tenn., primarily to take advantage of the recreational opportunities there. She likes to go river tubing and hiking, especially in the Great Smoky Mountains National Park. "You can go see a different waterfall every day of the week," Nelson says.
Many seniors use retirement as an opportunity to upgrade to what they describe as a better home (132,000 people) or a neighborhood with less crime (32,000 people), the Census Bureau found. "College towns are always great because they have tremendous resources, including arts and lecture series, concerts, and performances," says Bert Sperling, founder of BestPlaces.net. "Even in the middle-of-nowhere colleges will bring in really interesting acts and speakers to speak to students, and people in town can often partake of those."
Job or volunteer opportunities. A part-time job or second career is increasingly becoming a part of the retirement years. If you plan to continue working, consider the health of the economy before moving to a new place, and look for cities with interesting part-time job or consulting opportunities. Many retirees also pursue volunteer work for the community and social benefits. John Larson, 83, a retired photographer in Oshkosh, Wis., volunteers several days per month at the Experimental Aviation Association's museum. "I don't have to travel the world to meet people interested in space and aviation," he says. "They all show up here sooner or later, especially the last week of July at the Air Venture fly-in."
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Proximity to healthcare. Your healthcare needs are likely to increase as you age. Some 150,000 people changed residences for health reasons in 2011, typically after age 75. Any retirement spot you are considering should have health and elder-care facilities and doctors who specialize in taking care of older patients. "If you have a country home someplace that is out in the middle of nature and you develop health problems later on, it can be hard to get to healthcare or to get an ambulance to come to you," says Suzanne Salamon, associate chief for geriatric clinical programs at Beth Israel Deaconess Medical Center in Boston. "When you get older, you see a lot of specialists. It's easier if you are in an area where all these specialists are fairly close by."
Convenient transportation. Many retirees eventually reach a point where they can't or no longer want to drive. When this happens, other methods of transportation are essential. Consider whether a city has public transportation options or affordable taxi or van services for seniors. Boone, N.C., and Corvallis, Ore., for example, have free bus systems for all residents, and those age 65 and older can ride the bus for free in Ann Arbor, Mich., and State College, Penn. Seniors in Amherst, Mass., can use a senior van service that costs between $2.50 and $3.50 per ride.
Amenities for seniors. As you age, you may increasingly need assistance with errands, yard work, and household chores. Some cities have nonprofit aging-in-place communities that provide a range of services such as home maintenance, transportation, and meal services in exchange for an annual fee. You might also be interested in socializing at a senior center, using a senior citizen tuition waiver at a local college, or getting senior discounts from local retailers. Check out the perks and privileges offered to senior citizens, even if you are not yet old enough to qualify.
Near family and friends. There is no substitute for living near friends and family members. Even the coldest retirement spot can be welcoming when you can watch your grandchildren play in your backyard. Living near relatives can also save you money if your children or other relatives can give you a ride to your next doctor's appointment or help with household chores you would otherwise pay someone to do.
Stay close to home. Most people who trade places don't relocate far from home. The majority of retirees who moved between 2010 and 2011 stayed in the same county and state. Only 0.8 percent of senior citizens crossed state lines or relocated abroad. There are many benefits to staying put in retirement: You already know your way around town, you don't need to make new friends unless you want to, and you now have time to rediscover all the weekday happenings you missed while you were working. "One of the big myths about seniors is there is this huge flood of seniors who, as soon as they retire, pick up and move somewhere," says Frey. "People tend to move to places they are familiar with. Maybe their children live there or they have friends there."
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