When You Retire, Should You Move?

Retirement opens up numerous options. One option is the freedom to live where you want. Should you take advantage of this freedom? Here are some of the considerations.

Many federal employees live in big cities with large numbers of federal employees. Perhaps you live there because you want to or grew up there. Perhaps you live there because you had to in order to keep your job. When you retire, you can take a new look at your options.

Do you want to live in the same city after you retire? When you retire, there are a large number of opportunities available to you since you will not be obligated to go to the same job in the same location each day. You will also have an income as a result of your federal retirement program. You undoubtedly want to stretch your money as far as you can in order to enjoy your retirement. Moving is one of these many options.

A number of retirees stay in the same location because they like it and are familiar with it. Perhaps their children or grandchildren live in the area so moving may not seem like a good option.

But for many retirees, moving away seems attractive. Having lived and worked in the Washington, D.C. area for a number of years, and then moving to an area with a much smaller population, here is some advice for those thinking of making a significant change in lifestyle.

Moving may be a good option. For example, if you live in the Washington, D.C. area, taxes are high, there is a great deal of traffic and the house you live in has probably shot up in value. By selling and moving to a different geographic location, you may find lower taxes, lower housing prices and less traffic.

Here is one piece of advice though: Check out any area closely before you pack up and move to a new town or city.

Baby boomers have gotten used to having large numbers of people competing for space in grade school, college and for jobs. Why should retirement be any different? The dream you have been harboring for the past 30 years when you visited the small beach town on your summer vacation has been staying with you for decades. Now that you can leave your federal job and take your Civil Service Retirement System retirement check with you wherever you go, perhaps this is the time to do it.

But be careful. You may find that a lot of your fellow boomers are ahead of you. Prices of houses and condos on the ocean have skyrocketed. The beautiful golf course you want to live next to may be more pricey than you thought–just because thousands of others are also considering moving to the same area (or have moved there ahead of you). You may find the house in the Washington suburbs is not any less expensive than a beautiful condo overlooking the ocean.

So look carefully before you leap. Perhaps the view and the amenities in your dream area are worth it. But make an intelligent, informed decision. Take off for a few days or a couple of weeks to visit the town you are thinking of and ask questions. It will be a lot less expensive than pulling up stakes and finding out you don’t like your new home.

Here are several other considerations city dwellers may not have considered before moving.

If you enjoy eating out in a wide variety of restaurants, check the area to which you think you want to move. Will you have covered all available restaurants in the first month and, if so, will you find yourself longing for the wide variety of cuisine available in a metropolitan area?

What about taxes? Take into account income taxes, estate taxes and property taxes. And some states have taxes you may not be aware of. For example, Florida does not have an income tax but does have a tax on assets. It is not a large tax but, if you are fortunate to have substantial investments in stocks and bonds, it is a consideration you need to know about.

What is the real cost of living? Check with the local chamber of commerce and study their information brochures that will usually list information that can aid you in determining your cost of living so you can compare it to your current area of residence.

Will you have enough to do? Remember that when you move, you are cutting yourself off from your social circle and the activities you may now take for granted. For example, if you routinely go to the Kennedy Center or other events in the Washington area, will you miss them and will similar events or social circles be available to you in your new location?

What about healthcare facilities? Keep in mind that in a large metropolitan area you have access to a wide variety of facilities and specialists. If this is important to you, check out the new area for available medical services.

Some retirees want to consider moving to a foreign country. There are a number of potential advantages to moving to another country including housing costs that are much lower, warmer weather and a chance to experience a new culture.

There are also some potential disadvantages. Be sure to check the political stability of the country–not just the housing development or city you may be considering. Real estate laws in foreign countries may be dramatically different than those of the United States.

The same considerations mentioned above also apply before moving to a foreign country. Carefully check out tax considerations. Most of FedSmith.com readers are probably not going to contemplate giving up American citizenship before moving to a foreign country; be sure you understand any tax obligations to the United States and to any new location.

Some countries have a large English speaking population. Belize, for example, is a beautiful country that is attractive to many retirees. English is the language of much of the population and there are areas built to appeal to American retirees. But be sure you understand what you may be giving up. The medical facilities there may not be up to the standards you are used to having. And, if you have to go to nearby Mexico for medical care, knowing Spanish will be a big help.

In short, a number of retirees have found moving to be a way to improve their purchasing power and quality of life. Others are seriously disappointed and regret their choice. Think through your options and then make an informed decision about whether moving to a new city or a new country is the right choice for you–before you tell OPM to send your retirement check to your new location.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47