Approaching retirement a few years ago, Joanna and Roger Beam began searching for a new home by looking in the usual direction: south.
“There was a house in North Carolina that we really liked, and we almost bought a house on a river in Virginia,” said Joanna Beam, 75.
But instead of following other snowbirds, the Beams moved north two years ago, buying a house in Exeter, N.H., to be close to their granddaughters, now ages 3 ½ and 6.
“It’s just so much fun,” Joanna said.
The Beams aren’t alone. Family typically trumps warm weather and low-cost living for people heading into retirement. As such, the choice often isn’t about comparing lifestyles in, say, Florida and New Mexico, but rather considering the advantages of the places where the children and grandchildren live. Just ask the Beams, who also have children in Albany, N.Y., and Dallas.
According to AARP, roughly 20 percent of baby boomers plan to relocate in retirement, which is a lot of people given how large the boomer generation is.
Deciding where to retire isn’t a simple process. People who don’t take the time to do their homework may wish they had more carefully considered the health care system, public transportation, cost of living, political views, and cultural opportunities in their new community.
For those thinking of retiring to a new community, here’s some things to do before calling the moving van.
VISIT COMMUNITIES ON YOUR LIST When you find some place you like, make sure to stay long enough to experience the off season. Summers in Tampa may be tougher on some people than winters in New England. Then, too, you need to see if you like the people. If you’ve been looking forward to sharing a few beers at a barbecue, you probably don’t want a community that frowns on alcoholic beverages. And if you’ve been active in your church or synagogue, you may want to try a service or two to test your comfort level.
A trial rental will also give you an idea of what you will do once you’ve relocated. While some people like fishing and golf, others want a cultural center that offers theater, symphony, and art museums. Still others may prefer a university town that offers continuing education opportunities.
To find the right fit, spend some time checking out all that the community has to offer.
CONSIDER ALL TAXES Many people planning to retire use the absence of a state income tax as a litmus test. “This can be a serious miscalculation,” said Thomas Wetzel, president of the Retirement Living Information Center in Redding, Conn.
Higher sales and property taxes can more than offset the lack of a state income tax. Don’t forget to calculate the impact of all state and local levies, including excise taxes, license taxes, intangible taxes, estate taxes, and inheritance taxes.
In Florida, for example, there is no income tax, which is one reason retirees often put it at the top of their list. But property taxes are high and there’s a 6 percent state sales tax, with some counties adding their own levy which can boost the combined sales tax rate to 9.5 percent.
Delaware and Pennsylvania are both often rated as great tax states for retirees. Delaware has low real estate taxes, modest income taxes, and no sales tax. Social Security benefits are exempt from income tax. Pennsylvania exempts all retirement income, including public and private pensions, IRAs, and 401(k) distributions.
Still, taxes alone shouldn’t drive a relocation decision.
“You get what you pay for,” said Wetzel. “You can go to Alabama and find very low taxes, but it is an economy that runs a little differently than, let’s say, Massachusetts.”
LOOK AT COST OF LIVING Boston-area folks may face sticker shock if they move Manhattan, where it will take an additional 60 percent of after-tax income to maintain the same lifestyle, according to cost-of-living numbers provided by the Council for Community and Economic Research. But those moving to Sarasota, Fla., will find they can maintain their current lifestyle on about 30 percent less after-tax income.
INVESTIGATE MEDICAL CARE It may be it tough to replicate the care that you’re used to, particularly if you’ve chosen a remote mountain retreat or a quiet beach community. “This is a real challenge if you are moving from an area like Boston,” said Beth Gamel, a fee-only planner with Pillar Financial Advisors, Waltham. Check out the local hospitals, ask about the availability of doctors, and figure out how your health care coverage will work once you moved.
TRY DITCHING THE CAR Getting around may be no problem now, but you may be frustrated once you’ve outlived your driving years. So look for places with good public transportation or locations where needed stores and services are close by.
FACTOR IN FAMILY The desire to be close to loved ones is powerful. It often prompts people move closer to children and grandchildren or simply to stay put. AARP spokesman Nancy Thompson said she’s seeing lots of alternatives developing as people look for new ways to retire, often in proximity to friends, family, and community. “More people will be making different kinds of choices,” she said.
In Boston, for example, Beacon Hill Village offers its members programs and services to help them to stay in their own homes and neighborhoods. Nearly a dozen other communities in Massachusetts have similar “villages” either already operating or in development.