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More and more retirees making interstate moves are doing so in search of cheaper housing, according to a new study compiled from U.S. Census Bureau survey data.
The overall number of older Americans moving to a different state in retirement rebounded slightly last year after plummeting in 2021, according to the third annual report on retirement relocation trends from online moving-services marketplace Hire A Helper.
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Florida was the most popular destination, followed by North Carolina, Michigan, Arizona and Georgia.
About 1 in 8 retirees who relocated out of state reported doing so to cut housing expenses, up from 1 in 15 in 2019. “That kind of cost consciousness is something we haven’t seen at this level [in the census data] since 2014,” says Miranda Marquit, chief data analyst at Hire A Helper.
Such concerns overtook seeking “new or better housing” as the second most common cause for an interstate move, behind only family reasons, and were more pronounced among retirees of color, nearly one-fifth of whom cited cheaper housing as the driving force behind a move.
Inflation ‘freaked people out’
“Nobody really worried about inflation over the last decade, until this [past] year,” says Jeremy Kisner, a Phoenix-based certified financial planner with Surevest Private Wealth. “Inflation really became noticeable, and I think it freaked people out.”
Rents in particular grew rapidly during the COVID-19 pandemic, leaping 18 percent from 2020 to 2021, according to rental listing marketplace Apartment List. Rents continued to rise last year, albeit more slowly, going up 3.8 percent from January through December 2022.
“I know we have some adjustments on Social Security, and some pensions may have some cost-of-living adjustments, but it may not necessarily keep up with the actual increase in cost of living, especially if people are renting,” says Marianela Collado, CEO of Tobias Financial Advisors in Plantation, Florida. “We mostly try to dissuade people from being in a rental situation in retirement, because you’re at the whim of the landlord.”
Collado also cautions retirees mulling a move to look beyond a lower monthly rent or mortgage bill and focus on issues such as income and property taxes and homeowner’s insurance rates in their prospective new state.
“You could be making a move to downsize but actually find yourself with higher costs, especially related to property taxes,” she says. “People really need to think through all around what the impact is.”
