By Sandra D. Adams, CFP®
One of the issues for most retirees, once you have determined that you are ready to retire and can afford to do so, is where do you want to live in retirement? This, of course, is a loaded question. There are so many factors that go into making this decision, and it is as much emotional as it is financial. Here we will explore the various factors that go into making the decision about where to live in retirement and what those decisions mean to your overall retirement plan.
Location, Location, Location. For the majority of people, the most important decision in making the retirement living decision is the location. Will you remain in your pre-retirement community that you are familiar with? Where are your friends, connections and social contacts? Or will you make a change, perhaps to a different or warmer climate? To a more rural setting? Or maybe closer to the city where health care, transportation, resources and cultural activities are more accessible?
You may decide to move closer to family at this point in your life — this may be a dangerous proposition — as growing and maturing families have a tendency to move again just as you move to be near them, leaving you again stranded in a place where you know no one. In fact, you may find that it is more important to find a location where you can be near friends that you can socialize with, that you have commonalities with, and that will provide mutual support.
Once the location is determined, the physical space becomes important. Will you stay in the same home you’ve always lived in and “age in place?” If you decide to do that, if may become necessary to take a good hard look at your home and make sure that it is equipped to be safe and easy for you to live in for the next 20 – 30 years or so of your retirement.
Are the doors wide enough, if you should need a walker or wheelchair in the future? If you have stairs, what would happen if you should have mobility issues going forward? Could you live on one floor, or could you put in an elevator or chair lift? Do you have grab bars in your bathroom? Can showers/baths be made more accessible, if needed? Are there slip hazards on floors that need to be removed? Do you have too much furniture/general clutter in case you should become more immobile as you get older?
Not pleasant things to think about, of course, but also things you don’t want to wait until the last moment to think about if something were to happen to you or your spouse. And if you truly do wish to stay in your own home to age (according to a recent survey by the National Council on Aging, 9 in 10 seniors plan to stay in their own home to age), you have to plan ahead to make things as safe and accommodating for yourself and your spouse as possible, so there is not a need for you to need to move to an assisted living or nursing care facility in the unfortunate case that you have a medical emergency and your home is not equipped for you to stay there.
For those who don’t desire to stay in their pre-retirement home, there are endless choices:
· You might decide to downsize to a smaller home, condo, or apartment (likely one where you can live all on one floor – these are more age-friendly for the future).
· You might choose to move into a senior-only community so that you can associate with people that are in your same life situation, whether that is simply an independent community of homes, or an organized community with supports and care (like a Continuing Care Retirement Community – life plan communities that have levels of care, including long term care, allowing people to stay in the safe community through different phases of the aging process). And, of course, depending on your level of health, some retirees may need to go to go directly to some kind of assisted living or nursing care facility early on or at some time during their retirement.
· You might choose to live in a multi-generational planned community. These are communities not just of their peers, but planned communities made up of people of different generations that have resources and supports built in for community members to help one another (these are not yet available in all parts of the country, but are becoming more popular and wider spread).
· You might choose to live in a shared home situation — think of older adults sharing the same living space, expenses, and providing support and resources with one another, (e.g., the Golden Girls).
· Depending on your financial situation and need for support (or the needs of your family for your support) you might decide to move in with family members or they might decide to move in with you. This might end up being a win-win as you age to help provide mutual financial and family resource support for you and other family members while families are maturing and growing and you suddenly have extra time in retirement (if this is something that brings you joy and brings you value to in your next phase of retirement).
So, how do you go about making your decision about where and in what kind of house/housing facility to live in retirement?
· Develop your criteria – What kind of climate are you looking for? How active do you want your social life to be? What kind of access to you want to healthcare and other facilities? Make a list and search locations that fit your criteria. Take the time to visit the locations you are considering and interview friends and family who have chosen to live in those locations to understand the pros and cons.
· Identify neutral professionals to guide you – they can be the decision partners to help guide you through your decision making process. First and foremost, will you be able to afford the transition and be able to afford to live in the new place long term along with any other financial goals that you might have.
· Do a trial run – once you have narrowed down your ideal living location and housing, do a trial run, if possible. This might mean taking a trip to the new location (if it is somewhere different than where you live now) and trying out similar housing by renting for at least a short period of time or do a trial night or two in a new community (most senior communities offer that to potential new residents).
· Consult your family – Understand that sometimes your family (especially older adult children) have their own ideas about what you should be doing in your older age. This is to communicate with them your wishes, to let them know what your decision process was and why, and to get their (hopefully) ultimate buy-in. Even if they don’t completely agree with your decision, it is best to help them understand your overall plan. After all, it is YOUR retirement and you are still in control.
· Put together a transition team – Once you have made your ultimate decision about moving (if you indeed, are making a change), put together a team to get you transitioned to your new location and home. This could include specialists to help you downsize your current home, help you decide what to keep and take to the new place, what to get to family/friends, what to donate, and what to recycle/trash. There are specialists to help you stage and sell your current home, and then those to help you actually get moved into the new place as easily and efficiently as possible.
To move or not to move, that is the question. And even deciding not to move — aging in place — does not mean that there are not choices or changes to make. But if you do decide to make a move, it is a process that takes planning, and one that should not be taken lightly. Give the process serious consideration and thought — it is a large part of your potential retirement planning picture.
About the author: Sandra D. Adams, CFP®
Sandra D. Adams, CFP®, can be reached at 248-948-7900, Center for Financial Planning, Inc. 24800 Denso Drive, Ste. 300 Southfield, MI 48033. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Center for Financial Planning, Inc. Center for Financial Planning, Inc., is not a registered broker/dealer and is independent of Raymond James Financial Services. Any opinions are those of Sandra D. Adams, and not necessarily those of Raymond James.
Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete the CFP Board’s initial and ongoing certification requirements.