From coast to coast, what's the best place to retire in the US ? We look at factors to take into consideration when planning a move in retirement, especially when living on a fixed income.
Many people put down roots in the cities in which they worked, lived and raised their families. When they retire, they still want to find a place that offers them that sense of community they're used to. This could mean moving closer to family, or it could mean finding a place near other retirees.
Choosing where to live in retirement is a big undertaking. When deciding on a retirement location, there are many factors to consider, including the cost of living in that location, housing market, access to healthcare facilities and the community. Here are some things to keep in mind throughout your decision-making process.
Cost of Living in Retirement
As you plan your retirement, make sure to consider changes to income. Many retirees are dependent on fixed income sources such as Social Security benefits or employer pension plans; the income from which is often significantly lower than income from a salary received during working years.
The average monthly Social Security benefit paid to retired workers in June of 2018 was $1,413.37.If a retired worker receives this amount each month for one year, the total annual amount would be $16,960.44.
If two spouses both receive this monthly amount as retired workers, the annual combined total would be $33,920.88. However, this is assuming both spouses are retired workers in their own right. The benefit available to spouses of retired workers is only half of the benefit available to the working spouse.This amount is significantly lower than the U.S. median household income of $57,617 (as of 2016).
If a retired couple who lived in a rural town in the Midwest their entire life wants to move to a coastal area for a temperate climate, they should plan accordingly with their retirement budget, because the cost of living could be higher than they're used to.
According to a cost of living calculation tool from BestPlaces, a business that analyzes populations and locations across the country, the estimated cost of living in Fort Myers Beach, Florida is currently 65 percent higher than the cost of living in Des Moines, Iowa.Therefore, a person with an annual income of $50,000 in Des Moines would need an annual income of approximately $82,500 while living in Fort Myers Beach to maintain a comparable lifestyle. Not only would a move from Des Moines to Fort Myers Beach require more money to maintain a similar standard of living, but a retired person may also have less available income.
Housing Options After Retirement
Choosing the size and style of house is an important decision in retirement. A 2016 study by the National Association of Homebuilders revealed seventy-five percent of baby boomers want their next home to be a single-story dwelling.The ease and convenience of a house with bedrooms, bathrooms and laundry rooms all on a single level with no-step entries has long-term appeal.
A three-story house might be great for a big family, but after retirement, a smaller, one-story house, townhouse or condominium might be better suited for one to two people. In addition to the physical benefits of a one-story, step-less house, downsizing to a smaller house can also help purge any old, unnecessary or unwanted items.
When searching for the right house, consider whether a house belongs to a homeowners association. While most associations charge a fee for membership and benefits vary by association, it could be a small price to pay for the benefits a membership offers. Many homeowner groups use the membership fees to manage common areas such as roads, pools and clubhouses. Some associations will even manicure lawns and remove snow from the driveways of members. These benefits can help alleviate some of the strain of home ownership.
Downsizing may also mean moving to another city or state to be closer to relatives and loved ones.
When choosing an area for retirement, consider cities with a historically stable housing market. It's important to look for an area with a real estate market that has affordable homes.
While moving to a city with a volatile housing market does pose a set of risks, there are measures pre-retirees can take to minimize those risks, such as considering renting a house prior to purchasing.
Health Care for Retirees
When planning for retirement, be sure to consider an area's access to health care.
According to HealthView Services, a cost-projection software provider, women will face higher lifetime health care costs because they will live, on average, two years longer than men. The expected health care costs, which takes into account Medicare Parts B and D, a supplemental insurance policy and all out-of-pockets, for a healthy 63-year-old woman currently seeking retirement and having a life expectancy of age 89 are projected to be $362,607.
Aging populations also need to have easy access to several types of medical facilities. Various illnesses and ailments could arise in older adults, and they might need to see certain doctors and medical specialists on a regular basis.
Look for areas that have state-of-the-art medical centers, Veterans Affairs medical centers, specialists and urgent care facilities.
Here are some health care facility questions to consider:
Is the hospital top quality? Does it include services for many specialty areas, including cancer, cardiology, geriatrics, diabetes, neurosurgery, heart surgery and more?
Is the hospital affiliated with any universities? Academic healthcare centers can offer numerous testing, medical research and case study opportunities.
Does the hospital have a variety of specialists and facilities? Is it well-known for its outpatient and rehabilitation services?
Access to Community in Retirement
With more free time, retirees might want to consider a location with easy access to amenities such as shopping areas, theatre and musical venues, restaurants, gyms and fitness centers.
When getting from place to place, another thing to consider is the city's infrastructure, including its public transportation system. Easy public transit may be vital, especially if driving a car isn't a feasible option.
And, while you may be driving now, it's a good idea to plan for the future when driving might become more of a challenge.
According to a data report from Eldercare Locator, a public service supported by the U.S. Administration on Aging, "21 percent of the organization's calls from individuals who need assistance with finding reliable transportation to visit their doctors, shopping for groceries, attending religious services and performing other tasks that enable them to live full lives in their communities."
This percentage shows getting around town, whether it's for entertainment, health care or visiting family is a concern for people in retirement.
Everyone has different goals for their ideal retirement. There's a lot of planning that goes into finding the right retirement locale to live in, especially on a fixed income. Whether it's the mountains, beach, desert, rural farm or metropolis, it's important to do the research to find the ideal place to live out your golden years.
The content is provided for informational purposes only and does not constitute advice. For specific details on how this may apply to your personal situation, contact your personal financial advisor or insurance agent for more details. American Equity contracts are only sold through independent agents. Please contact your state insurance department to see if there is an independent insurance agent in your area appointed to sell American Equity annuity contracts.
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