Moving in retirement: What to consider

When you dream about retirement, where are you living? Maybe you see your toes in the sand, on a beach far away. Maybe you're looking forward to spending more time volunteering, or you’re eager to move closer to your grandkids. Or maybe you're 1 in every 4 Americans who doesn't plan on retiring at all.

Alex Gonzalez, a Thrivent financial consultant, is seeing a shift in his clients' retirement mentality.

"It used to be more of a status thing to retire young, but what I've seen over time is [clients] want to have that sense of purpose, that reason for getting up every day," Gonzalez says. More and more, people are shifting to "a blended retirement, maybe doing a [freelancing] gig for 5-10 years or working at the golf course, earning a little bit more income, which means you spend less on your portfolio, but it's fun."

Baby Boomers are choosing to stay in the workforce. With 32% of people ages 65 to 69 working, and 19% of people ages 70 to 74 employed, the Boomer generation expects to live longer and continue working well into their 70s. And according to the Joint Center for Housing Studies at Harvard University, they are also opting to stay in their existing homes and redirect their funds to home renovations.

But that same study found that choosing to stay at home is causing a gridlock in the housing market.

Do you plan on retiring later in life? How will this influence where you live? If you're still considering relocating, weigh your options before you make the move. As you plan the best place to retire, there are a few factors to consider:

What matters to you? Whether you want more time with family or a flexible work schedule to let you pursue your passions, understanding your goals can help you decide the best place to retire.

How will your health care change as you advance in your years? Will you continue to use health care through your employer?

Do you plan to continue with your current career or switch gears to a part-time or freelance position with more flexibility?

Whether you're ready for a change of scenery or want to live near family, moving out of state can bring you closer to your goals. Just make sure to account for the cost of living in your retirement plan. "A lot of folks don't realize there's a difference in cost of living," says Gonzalez. If you relocate to more expensive states like Hawaii or California, you may pay more for a home, in addition to increased state, income and estate taxes.

The hidden costs of homeownership and maintenance could amount to $9,000 a year, according to a study by Zillow. But if you're renting or maintaining a smaller home, you can cut those costs in half. A new home also means a fresh start for the next chapter of your life.

Historically, people began relocating to retirement communities in their 70s. But that's not a viable option for most Baby Boomers—only 6% of Americans plan on living in a senior community. Though, as you move into the "no-go" phase of retirement health care, camaraderie and convenience become more important.

"I just met with a client in their mid-80s," says Gonzalez. "They're paying somebody to mow the lawn, paying somebody to do the snow removal. They can't do the gardening like they used to."

If you think you'll value convenience more as you advance in your years, "all that stuff is taken care of when you're in a community setting … it simplifies things," says Gonzalez.

And with the "new retirement" shift inspiring more alternative senior housing options available today, you can find a living situation that better suits your values and needs when that time comes.

Some alternatives include:

• Multigenerational housing—Moving in with your children and grandchildren as your personal needs change or would like to be closer to family.

• Micro-communities—For those needing regular medical care and attention, micro-communities are smaller residential and assisted living care facilities.

• Green housing—A type of care unit where a few residents share a respectful home-like atmosphere with access to health care providers.

• Naturally occurring retirement communities (NORC)—A neighborhood where all the current residents are 60+ years old and do not require home nursing treatment.

• The village movement—Neighbors collectively take on the responsibility of coordinating care and providing services like dog walking, grocery shopping and home maintenance.

If you have a good thing going, why leave? After all, you've created a life in your home—your friends and community are there. Additionally, you could potentially save more if you stay. If your home is paid for "[staying put] minimizes cash flow," notes Gonzalez. Also, if your home is appreciating, it may be more beneficial to hold onto it.

However, if your home equity is low, it may be more cost-effective to sell and find a smaller, more affordable place to rent. As you get older, there are options to age-proof your home as well. And if you (or a financial professional) perform a cost analysis, you might find it's cheaper to retrofit your home than move somewhere new.

Taking retirement from a dream to a plan begins with a conversation. What conversations do you need to have with yourself, your spouse or your family?

Where you live, whether you continue working, and how your health and the health of your spouse changes as you advance in age all influence cost of living.

If you envision yourself living independently all your life, what accommodations and support can you account for in your retirement plan to prolong your independence?

Your plans may impact your loved ones. How do your kids feel about selling the family home? Do your children plan to pay for some of your retirement living costs or healthcare needs? How have they envisioned your involvement with them and their families in retirement?

Retirement planning is a dynamic process, and all too often we plan with broad strokes. A financial advisor can help you analyze the numbers tied to your goals, and how you can better use money as a tool to realize those goals. “It's our job [as financial advisors] to say … here are some things that we need to think through to make sure that your blessings will last the rest of your life.”

As we know, even the best-laid plans can be challenged by uncertainty. A financial advisor can also help you look at possible obstacles and think through solutions with scenario planning. "It's being flexible with life events that come up and trying to account for various scenarios … if [the client's] son [loses] his job and they're thinking of him coming back home, and they were going to sell their single-family home and move … that changes the game," says Gonzalez.

Ready to work toward a more secure retirement? Find out where you stand on your path toward retirement with our retirement calculator. You can also connect with a financial advisor in your area to start creating a retirement plan that aligns with your broader goals.