Start by brainstorming lifestyle choices

My first suggestion for anyone who wants to explore their retirement options is to start by thinking big. Most often we must make trade-offs, but for now, try not to rule anything out as you ask yourself some key questions:

  • How close do you want to live near family and friends?
  • What’s your idea of an ideal community, both in terms of people and activities?
  • What’s your ideal climate, and how important is that?
  • Will you be near top-notch doctors and hospitals?
  • What activities are most important, whether that’s cultural (theatre, museums, music), religious (church, mosque, synagogue), or physical (golf, gardening, skiing)?
  • How important are other support systems such as public transportation or an active senior centre?
  • Will you be looking for part-time work or volunteer opportunities?

Layer on housing choices

Once you’ve given your lifestyle choices some thought, it’s time to focus on your options for housing. Stay in brainstorm mode for a little longer as you allow yourself to think freely. You’ll have plenty of time later on to narrow down your choices.

Is it more appealing to stay put in retirement or do you have a hankering to try someplace new? If you want to explore moving, that opens another set of options:

  • Do you want to try a new community, or simply a new home?
  • Do you prefer to buy or rent? There are pros and cons to both choices: more autonomy and control as a buyer vs. less responsibility for upkeep and the ability to easily move if your circumstances change as a renter.
  • What appeals most, city or country? Mountains or beach? A single-family home, a condominium, an apartment, or perhaps a unit in a retirement community, or even a continuing care facility? Or in your wildest dreams would you want something even more unusual, such as a house boat?

Switch over to the practical

Once you’ve allowed yourself to think big, it’s time to switch gears and get a bit more practical about finances and logistics. I’m absolutely not suggesting that you abandon your dreams, but it’s also essential to know if your plan is financially tenable and physically doable. The last thing you want to do is overextend yourself, adding stress to your retirement years.

If you don’t have a detailed retirement plan that includes a realistic estimate of your retirement income (from your investments, pensions and Social Welfare), now is the time to do those calculations.

On the spending side of the equation, compare all costs (current and future) as you consider different options. You may save money in some areas by relocating but have bigger (or brand new) costs in other areas of your budget. One state might not have an income tax, for example, but home prices could be higher. Property taxes could be lower but you may face higher homeowner’s insurance premiums.

As you do your analysis, include everything from fixed expenses for things like housing (mortgage or rent, property taxes, state taxes, utilities, maintenance, renovations, insurance, healthcare) to discretionary expenses for recreation, travel (especially if you’re far from your family), and potentially the need for extra help or ongoing care. A financial planner can help you crunch all the numbers.

Also do a gut check on the lifestyle side. If you move abroad, will you regret being further away from your family? Will there be enough activities to keep you fulfilled? Will the high cost of living force you to scrimp on other extras? Most likely you won’t be able to get everything you want, but you can hopefully satisfy the most important aspects of your dream.

Some final thoughts

My last piece of advice is to give yourself all the time you need to make your decision. This is not a time to feel rushed. You might even want to do a test run before a big move, renting in a new community for a few months as you continue to feel your way.

Whatever you ultimately decide, retirement can be a wonderful new chapter in your life as long as you plan and protect your finances at the same time that you live your dream. And ultimately, this doesn’t have to be a permanent decision; life can continue to evolve in a positive way, provided, of course, that you continue to carefully think through both your financial and lifestyle choices.

 Source: The Schwab Centre for Financial Research which is a division of Charles Schwab & Co., Inc.

How we help

We can help take the effort out of this for you by demonstrating how this would work for you and your family and providing you with one cohesive Financial Plan.

You can arrange a meeting by clicking here to access my diary, email or alternatively, call me on 087 8144 104.