Key Considerations for Retirees Relocating in 2018

At some point most retirees face a crossroads about where to live. This is often a difficult decision.

Some pick a place that's warm and offers a lower cost of living. Others downsize and stay in their home state. Still others are attracted to "glamour" cities that offer a lifestyle filled with cultural amenities and professional sports.

There's only one fundamental truth when it comes to relocating in retirement: There are plenty of options, and you need to take your time and do some research to find the best fit. Here are some things to think about.

Determine Your Preferences Suppose you would like to relocate, and are open as to the location. You need to start by considering your preferences.

Soon-to-be empty-nesters, my wife and I were theoretically open to a new location. Then we started looking at our preferences. Since we've seen a fair amount of the United States and Europe, we knew we wanted to stay in the east-central part of the U.S. Of course, that’s a lot of territory. We pretty much eliminated Florida and most of the Southeast, since my wife doesn't like hot and humid weather, preferring to be in a temperate zone.

Next, we started talking about cost of living--perhaps because of our sky-high property taxes. That eliminated most of the Northeast. Just about anywhere well south of the most populous areas of the Midwest, Northeast, and West is going to offer lower property and state income taxes. In fact, seven states (Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming) don't levy a state income tax. When it comes to the cost-of-living question, though, you need to look beyond the tax picture and consider overall living expenses. What are sales taxes like in the areas you're considering? What about transportation costs? Some places are hard to get to if you're not near a major airport. What might you pay for long-term care services, if you need them? You need to weigh a number of economic factors.

Vetting Specific Locales: Run the Numbers I receive what seems like a survey each week on the "best" places to live and retire. There are a host of services that rate cities based on relative value and a host of other attributes. Personally, I'm a fan of Bankrate.com's Best Places to Retire. The editors rate cities based on living expenses, crime, cultural amenities, and well-being. Although not every city on Bankrate's list is a bargain in terms of affordability, it nevertheless provides a comprehensive gauge of what to look for if you're wide open on places to relocate.

Here are Banrkate's top choices:

1. Pittsburgh
2. Boston
3. Los Angeles
4. Denver
5. Providence, Rhode Island
6. Minneapolis
7. Tampa-St. Petersburg, Florida
8. Phoenix
9. Austin, Texas
10. Dallas

Of course, if you're screening for affordability, Los Angeles and Boston probably won't make your cut. You can find much better housing deals in Florida and Texas. It all depends on your housing budget, home equity, and retirement income. Those who can afford a big West or East Coast city will enjoy the cultural amenities, although smaller cities like Austin, Pittsburgh, and Denver still have plenty to offer in terms of culture. Moreover, urban atmospheres run the gamut. Los Angeles couldn't be more different from Pittsburgh in terms of cost, size and vibe. It helps to visit the locations your considering (even if you've been there before) and stay a few days or weeks to get the feel of it.

Be sure to sample a number of sources that publish "best places to retire" lists, such as AARP and Niche, and don't get caught up with the glamour and "brand value" of a city. Consider unassuming college towns, which almost always offer the quadruple bonuses of low cost, quality healthcare, cultural amenities, and lifelong learning.

Consider Taking the Relocation Two Step Remember that your relocation decision doesn't have to be final; in fact, it can have stages.

For instance, one couple I know is on the cusp of seeing their youngest of three children leave for college. On top of that, the husband is retiring after 40 years. They're considering the "two step." By that, I mean they plan to sell their four-bedroom home and move to a resortlike community that the wife has always liked. But they admit that may not be their final destination. They aren't making a permanent move until they see where their children end up after college--they don't want to be too far away and then possibly make another move. Like a lot of soon-to-be empty-nesters, they are weighing their options but finding a pleasant interim solution.

This "sampling" is a good choice for many retirees. Sampling may also involve renting a place for a while to get a feel for an area.

Is Aging in Place For You? Many view aging in place as the best option in retirement: 90% of Americans in one AARP survey said they want to age in place. Doing so may involve relocating a few miles away from here you currently live to a nearby community that will accommodate you as you age, or just staying put in your current residence.

Want to move or downsize but stay in the area you're currently in and age in place? Continuing-care communities allow you to buy or rent an apartment, starting out in independent living then moving into assisted living or memory care as your needs change. (I covered this subject in-depth in a previous column.) Keep in mind that continuing care community arrangements vary widely depending on locale and services offered. I've seen some fairly modest communities run by religious organizations to incredibly high-end places that offer everything from restaurants to penthouse apartments. There are more than 2,000 continuing care communities in the U.S. today, with more being built every year.

Others, meanwhile, will choose to literally age in place, by staying in their current homes. If your circumstances change as you age--say, you develop a disability or need extra help--you can modify your home and bring in home-care services such as cooking, cleaning, and visiting nurses. I covered the idea of how you can determine whether this is a viable option for you here.

When you boil it down, relocating in retirement can be a surprisingly simple decision. You may not want to move, and there may be no economic incentive that's powerful enough for you to pack up your tent. Then again, you may want a completely different setting while enjoying mild weather, reduced home maintenance, and lower taxes. It's all about priorities and what matters most to you. Because even when you run the numbers on cost of living and taxes, it's quality of life that matters most.

John F. Wasik is a freelance columnist for Morningstar.com and author of 16 books, including Lightning Strikes: Timeless Lessons in Creativity from the Life and Work of Nikola Tesla. The views expressed in this article do not necessarily reflect the views of Morningstar.com.