Deciding where to settle down during retirement is among the most crucial decisions you will face. While it’s not solely about the numbers, your financial situation undeniably influences this choice. Your retirement location will affect your living costs, the taxes you’ll owe, and more.
Taking a closer look at just the financial aspect, certain regions in the U.S. might be more appealing than others for retirees. A recent survey by Nationwide revealed that people in two specific regions have concerns that their current residence might not be financially ideal for retirement.
The survey divided the U.S. into four main regions: the Northeast, Midwest, South, and West. It appeared that almost three-quarters of respondents in the Midwest and South found it economically sensible to retire within their states or cities. In contrast, folks living in the Northeast and West seemed less optimistic.
Only 63% of Westerners and 59% of Northeasterners felt it made financial sense to stay in their current locales after retiring. Furthermore, about 20% of Northeasterners and 21% of Westerners are considering relocating to a more affordable place once they retire.
This aligns with the known cost of living discrepancies across these areas. The Midwest and South generally boast a lower to moderate cost of living, as observed by the Missouri Economic Research and Information Center (MERIC). Meanwhile, the most costly states are situated in the West and Northeast.
Yet, many residents in these pricier regions are willing to bear the costs, preferring to remain where they are. Interestingly, a higher percentage of those in the Northeast and West express a desire to stay put during retirement compared to their Midwestern and Southern counterparts.
Ultimately, where to retire is a personal choice, influenced by several factors, including finances. You might already have a specific retirement spot in mind, or you could still be exploring options. Regardless, reviewing your retirement budget is wise, ensuring you are saving enough for your future.
To gauge how much to save for retirement, start with envisioning your retirement lifestyle. This varies for everyone—some might foresee travel and new hobbies, while others plan to maintain a similar lifestyle.
Begin by using your current expenses as a rough guide for future costs. If you intend to move once retired, adjust your budget to reflect differences in the cost of living between your current and future locations. Tools such as UMass Boston’s Elder Index can help estimate the funds needed for a comfortable retirement, though it primarily covers essential expenses and omits luxuries like travel.
As retirement approaches, set aside time annually to revisit and, if necessary, amend your retirement plans. Life circumstances or preferences might lead you to choose a different retirement destination than initially envisioned, or you may find that your hometown isn’t feasible on your present savings. Making these adjustments promptly increases your chances of enjoying a secure and satisfying retirement.
