Moving after retirement may offer some benefits — but there are potential pitfalls to keep in mind as well.
There are a number of reasons why you might want to move in retirement. Robert J. Robes, lead wealth planning strategist with Wells Fargo Wealth & Investment Management, reviews common reasons for wanting to move.
To free up more cash
When you sell your home, you have the ability to access the equity that was tied up in the value of your house. (You also might be able to avoid paying capital gains taxes on the appreciation — up to $500,000 if you file a joint return with your spouse.) If you move to a less expensive home, you potentially can keep more of those funds for other uses. Where you choose to move could also decrease the expenses associated with maintaining your home, which may free up even more cash flow for other areas of your life.
To live closer to family
Moving in retirement can put you closer to your children and grandchildren. Prioritizing family after your work years are finished is a goal for many, and cutting down the miles between you and your family members can help bring you joy and memories. It can also be a comfort and a help to be near family who are able to support you through some of the challenges of older age.
Be sure to discuss your plans openly and honestly with family members prior to moving. It is important that you talk about potential conflicts, like how much time you’ll spend together and how much apart and setting expectations around being a caregiver for grandchildren. Open communication often helps avoid misunderstandings.
To move somewhere you love
Sometimes moving in retirement is about turning a favorite destination into your new home. You may now have the opportunity to decide where you want to live instead of where you have to live. Be sure to prioritize what’s really important to you as you consider locations — and maybe try an extended stay in your chosen location to test it out before fully committing to moving there.
Depending on where you move, your cost of living could increase or decrease and impact your cash flow. Research and estimate costs for your essentials (such as health care), property and income taxes, and entertainment as you contemplate a move.
To downsize and simplify
Perhaps your home is now too large or filled with more belongings than you care to maintain. Moving to a smaller home and freeing yourself of excessive possessions may provide the simplicity and low-maintenance life that you seek for your retirement years.
Estate sale or auction companies and certain charitable organizations could be useful resources. Local organizations such as state and area agencies on aging and local senior communities often provide resources to help you find and choose the type of residence that fits your needs.
Wells Fargo Wealth & Investment Management (WIM) is a division within Wells Fargo & Company. WIM provides financial products and services through various bank and brokerage affiliates of Wells Fargo & Company.
Wells Fargo & Company and its affiliates do not provide legal or tax advice.