Relocating in Retirement: Practice makes perfect!
So here we are: mid-January… Cincinnati.
We have 10-12 more weeks of the kind of weather that gets a lot of us trying to figure out a way to get to sunnier climates. It isn't coincidental that this is also the time of year many pre- and post-retirees start thinking about moving to warmer areas… permanently.
Retirement relocation is becoming a big business which isn’t exactly surprising, given 10,000 Americans turn 65 each day.
At the top of retirement relocation destinations is Florida: it’s warm, it's continental USA and it's easy to get to. I have a few clients who have migrated to Florida's sunnier shores already. In fact, I’m going there for a week myself come the end of January. Another part of Florida's lure is that it has no state income tax, (nor is there in Alaska, Nevada, South Dakota, Texas, Washington and Wyoming). It should be noted however, that Florida is not a cheap place to live, in part because of these perks.
Also high on the list of popular relocation destinations are Belize, Costa Rica, Nicaragua and Panama, where a retiree can spend little for a place in the sun. In fact, according to the Retire Overseas Index, Granada, Nicaragua started a retiree residency program that boasts one of the lowest costs of living available anywhere in the world: the income requirement is only $600.00/month! Of course, access to good healthcare is always a concern for retirees and the general impression is that Central American services are… well… shall we say less than acceptable. However, as retiree communities grow in popularity, so do high quality health clinics. But remember, Medicare provides no coverage to Americans residing outside of the U.S.
My job as an advisor often requires me to play devil’s advocate on discussions concerning relocation. On a few occasions, I’ve known folks to move away to the relatively closer retiree meccas, only to return 6-12 months later, disappointed. Apparently, lounging by a pool sipping cocktails, inspiring walks along deserted beaches, outlet mall shopping and endless rounds of golf can become tiresome, or at least unfulfilling.Without drifting off into the weeds about things like Municipal Bond investment issues when moving to another state, my routine advice to clients considering a move is “practice makes perfect.” Go there for vacations, get involved with the communities, check out the websites, (we will soon have research links on our own website,) create a budget, consider the costs of transportation, etc. Get the feel of things. Practice, practice, practice, then talk to your advisor about investment strategies that directly support your proposed lifestyle.But for those of us considering staying/retiring within the tristate area closer to our families, institutions, services and communities, five months in Costa Rica sounds pretty good right now, doesn’t it?