Experts: How To Find the Perfect Place To Retire

Senior man on golf course driving golf cart at sunrise.

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Choosing where to live in retirement is an important decision as it can affect not only your finances but also the social aspects of your life. There is also no “perfect place” to retire – it really depends on you and your needs.

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To help you find the perfect place for you, GOBankingRates spoke to financial experts about what to consider when deciding where to spend your golden years.

Consider all living expenses in the area

Housing is a big expense, but living in a place with affordable housing – especially if it’s farther away – can mean that other goods and services are more expensive.

“In some retiree locations, grocery stores are limited and the cost of groceries and basic necessities can be much higher,” said Craig Dangar, senior partner and principal advisor at Vault Group. “Access to crafts and services can also be a lot [more expensive]as availability is often lacking.”

Access and cost of medical care also need to be considered, Dangar said. And along with routine medical expenses, you should also consider the cost of long-term care.

“As you age, long-term care can become a major concern — and a cost that can vary widely by region,” said Herman “Tommy” Thompson, Jr., CFP, financial planner at Innovative Financial Group in Atlanta. “Before moving, I recommend considering both the costs and the types of long-term care that are available in the area. Genworth offers a free online database that you can use to compare the average cost of care in different communities across the United States.”

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The cost differences can be as much as $1,000 per month, so it’s important to do your research before making any decisions. For example, the average monthly cost for a domestic helper in The Villages, Florida is $5,720, while the average cost in Minneapolis is $7,055 per month.

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Don’t forget taxes

Taxes can vary greatly from place to place, so don’t forget to take this into account when deciding where to live in retirement.

“State income taxes are an important consideration in retirement because distributions from pensions, IRAs, 401(k) [plans] and 403(b) [plans] are generally taxable,” Thompson said. “Even a low state income tax can add up when you meet your required minimum distributions and withdraw tens of thousands of dollars from retirement accounts year after year. Some states like Florida, Texas and Tennessee have no state income tax at all.”

There are other states that have an income tax but do not tax Social Security.

“My home state of Georgia has a state income tax but doesn’t tax Social Security and gives retirees age 65 and older an exemption of over $60,000 in retirement income per year,” Thompson said.

You also need to look beyond income taxes when considering your overall tax burden.

“Don’t automatically assume that a state with no income tax will have a lower overall tax burden,” said Paul Peeler, financial advisor at the Integrated Financial Group. “Look at other tax levels, such as B. Sales and Use Taxes and how they may apply to you.”

Examine non-financial elements

Finding a place to retire that is within your budget is important, but you also need to consider social factors when looking for your ideal spot.

“Do you have family close by? Do you have friends nearby? It’s important to have a social group and stay involved,” Thompson said. “This keeps your mind sharp and ensures there’s a network to notice when you’re no longer showing up. The effects of isolation can be just as bad for your health as smoking.”

You should also be close to the things you love, be it a beach or a golf course.

“If you’re a golfer, living 30 miles from the best course wouldn’t be the best decision,” Thompson said.

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