6 Hidden Costs of Moving in Retirement

Look beyond lower income taxes and calculate your total after-tax living costs. “I had a client relocate to Florida to avoid income tax, only to find homeowners insurance there cost nearly triple due to flood risk and rising property values drove up their real estate tax bill,” Abney says.

3. Retirement housing

If your relocation plan includes an older adult community, get to know what they charge and how. “So many retirees that come to us have a false understanding that communities operate strictly on a monthly rent basis,” Clerc says, but many charge hefty upfront fees.

For example, continuing care retirement communities, or CCRCs, are attractive to many retirees because they offer a continuum of housing options, from independent living to assisted living to nursing homes, on one site, but Clerc notes that they charge entrance fees averaging $300,000 to $400,000. “There can also be ancillary charges, perhaps meal plans, housekeeping or health care services, that increase as you need more care,” he says.

Before committing to any community, Clerc recommends getting a full breakdown of all fees. Check what monthly fees cover — utilities, meals, laundry and transportation aren’t always included. Ask how costs change if you move from one housing type to another, and whether entrance fees are partially refundable to you if you move or to your estate when you die.

Finally, don’t join a community if it takes most or all of your assets just to get in. Clerc says to keep at least two to three years’ worth of community fees accessible after accounting for the entrance fee entry and living expenses.

4. Insurance

What you pay for home and auto insurance depends heavily on where you live. Sherman says her clients get the biggest sticker shock when they move to storm-prone coastal areas and confront homeowners’ insurance premiums two to four times higher than when they lived before.

“In Oregon, you’re probably not going to pay for hurricane insurance, but you might if you move to Florida,” says Annie Cole, founder of the financial education site Money Essentials for Women.  “The same goes for car insurance — if you live [somewhere] with higher crime or auto accident rates, you may pay a higher premium.”

Before picking your retirement spot, research insurance costs for your prospective ZIP code and property type. Get quotes for home, auto and health insurance before deciding. These ongoing costs can eat into any savings you expected from moving.

5. Home maintenance expenses

As you get older, you may need to hire help for tasks you used to do yourself. “Due to higher inflation, labor rates for the trades have gone up over the last few years and can vary from one state to another,” notes Mitchell McNeil, a Minneapolis-area wealth management adviser at Northwestern Mutual.

When house hunting, research local labor rates for services such as lawn care, home repairs and handyman work. Consider the home’s condition and age, too. Are you likely to need a new roof, appliances or flooring within the next decade?

If so, Cole says it’s best not just to hope you can handle those expenses when they arise. She recommends setting aside 1 percent to 4 percent of your home’s total value for maintenance expenses.

6. Utility bills

Paying for water, power and other necessary services every month is such a routine fact of financial life (especially if you automate those payments) that it’s easy to forget how much they can change when you relocate. But the impact on your budget can be considerable.

For example, electricity is more than 2½ times more expensive in California (31.8 cents per kilowatt-hour) than in Idaho (11.9 cents), according to the U.S. Energy Information Administration. Water bills show similar disparities — an analysis by moving services marketplace and review site Move.org found that West Virginians paid $122 monthly for water in 2024, compared to the national average of $47. Those differences can add up to thousands of dollars a year.

Before finalizing your retirement destination, research utility rates and factor them into your budget. Contact local utility companies for rate information and ask real estate agents about typical monthly bills for homes in your price and size range.

How to head off costly surprises

Planners and relocation specialists recommend asking yourself these questions when pondering a retirement relocation:

• Why am I moving?
• What’s the difference in property and income taxes?
• Are my health care providers still accessible?
• Is there reliable transportation if I can no longer drive?
• Does the area have adequate long-term care options?

And here are some key pitfalls to avoid in budgeting for a move:

• Build in a budget buffer. You can get reasonable estimates of how your insurance, utilities and other costs will change in your new locale, but don’t rely just on that data. Cole recommends adding a 10 percent cushion to your anticipated budget to cover emergency expenses.
• Don’t ignore health care plan limitations. Moving across county lines can render your Medicare Advantage plan unusable. This could force you into a pricier option.
• Don’t over-rely on proceeds from selling your old home. “Oftentimes, clients are planning to fund their retirement living with the home equity they’ll gain from selling without subtracting the costs associated with selling their home,” Clerc says.
• Don’t rush into a new mortgage. “We see too many clients who want to homes in their 60s and 70s and decide to finance some of the cost on a mortgage,” McNeil says. With home prices rising and interest rates high, he says, “renting can be a more practical solution.”