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5 Reasons to Relocate in Retirement

And the 10 states retirees are moving to the most

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Journalist and author Martin J. Smith spent decades living and working in cities or nearby suburbs. But when it came time a few years ago for him to retire from full-time employment as a magazine editor in Southern California, he and his wife, Judy, a retired municipal manager, opted for something different.

The couple relocated to Granby, Colorado, a town of about 2,200 in the Rocky Mountains northwest of Denver. Granby is known as a destination for skiing, hiking and fishing, but Smith says it’s also a place where a retiree can shed the stress of congested urban life and reconnect with nature. Where the day’s biggest complication might be a pregnant moose cow deciding to bed down in your pasture.

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For Smith, 66, Granby’s neighborliness and slower pace have equally strong appeal. 

“It’s easy to feel in a big city that you really don’t matter, and you’re just struggling along,” he explains. “But in a small town, you do matter. Your actions affect people directly all the time, and their actions affect you.” He’s made numerous friends through volunteer work with the local historical association and Habitat for Humanity and says he’s enjoying the transition so much that he’s considering writing a book about his experience. 

Smith’s story is not unique. Across the country, many older Americans are seeking a change of scene as they leave working life, or most of it, behind.

In a 2022 survey of U.S. adults with at least $10,000 in investable assets, commissioned by insurance and financial services firm Nationwide, 40 percent of those who hadn’t yet retired said they planned to move to a different city or region when they do.

And one in five United Van Lines customers name retirement as their reason for moving, according to the company’s 2022 National Movers Study. In nine states — Arizona, Delaware, Florida, Maine, New Mexico, South Carolina, South Dakota, West Virginia and Wyoming — at least a third of new arrivals last year were retirees.

“A majority of my clients who are retired or considering retirement are looking to relocate,” says Christie M. Russell, a Dallas-based financial adviser with Northwestern Mutual. 

Top states for retiree moves

These 10 states had the highest net migration of people 60 and older — the number moving into the state minus the number moving out — in 2021, according to the latest “Where Retirees Are Moving” report from consumer finance website SmartAsset.

1. Florida (net 60-plus migration: 78,174)

2. Arizona (25,090)

3. South Carolina (19,004)

4. North Carolina (18,996)

5. Tennessee (14,767)

6. Idaho (8,566)

7. Nevada (6,814)

8. Arkansas (5,774)

9. Maine (5,718)

10. Texas (5,542)

Source: SmartAsset (from U.S. Census Bureau data)

Russell and other advisers say a variety of factors influence retirees’ decisions to relocate, from seeking the sun to being closer to loved ones. Personal finances play a role, too: In the Nationwide survey, 43 percent of those who plan to move in retirement cite reducing their cost of living as one of their top three reasons, and 34 percent included going to a lower-tax state. 

Often, “it comes down to money, family and weather, either one or a combination,” says Barbara O’Neill, a retired Rutgers University professor and author of Flipping a Switch: Your Guide to Happiness and Financial Security in Later Life

Here are five of the most common reasons retirees decide to make a major move. 

1. Lower housing costs

According to a February 2023 study by Vanguard, 60 percent of retirees who move sell a home in a high-priced market and move to a cheaper locale. In the process, they typically pocket around $100,000 in home equity, which they can use to augment Social Security and retirement savings or pensions.

Russell says it’s a good deal, even if the house you’re selling is paid off. 

“While a lot of my clients do not carry a mortgage anymore, the high costs of property taxes, utilities and upkeep are factors for relocation,” she says. “The vast majority of people looking to retire have most of their net worth tied into two places, the equity in their home and their qualified [retirement] plans. A relocation is a great opportunity to liquidate equity in a sale of a home in order to prepare for the financial goals that retirement presents.” 

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Of course, relocating costs money, especially if you’re buying a new home. But most people recoup outlays like moving expenses and closing costs in a year or two, says Matthew Essmann, a managing partner at Cornerstone Financial Services in Troy, Michigan. 

2. A tax cut

Another way to save money is to move somewhere where you won’t have to pay as much in taxes on your retirement income

For example, there’s no state income tax in Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming, which means no tax on retirement income such as pensions, Social Security, and IRA and 401(k) withdrawals. (New Hampshire does tax dividends and interest, upon which many retirees rely.)

While they do tax income generally, Illinois, Mississippi and Pennsylvania exempt retirement income. Other states offer specific tax breaks for older residents. Coloradans ages 65 and over, for example, can deduct up to $24,000 in federally taxable pension or annuity income from their state income taxes, and South Carolina exempts up to $15,000 in taxable income for that age group. Some retirement destinations may have lower property taxes as well, although rates can vary widely within states.

All that can add up to significant savings, particularly for affluent retirees, according to O’Neill. “If you’ve got a higher income in later life, you want to pay less taxes, so you may decide to move for that reason,” she says.

3. Getting close to family

According to a June 2022 report from the Transamerica Center for Retirement Studies, 53 percent of workers view spending more time with family and friends is a major retirement goal.

For many, that means moving to where their loved ones are. In the Nationwide survey, more than one in five investors planning to relocate in retirement listed being closer to family among their top three reasons.

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“Most of my clients have family spread around the country, and with new time and freedom [they] are excited about getting more involved in everyday life events their careers pulled them from before retirement,” Russell says.  

Being able to help out with the grandkids is a particularly compelling motivation. A recent study by University of Wisconsin researchers found that newly retired grandparents are twice as likely to move to be close to a grandchild as those who are not yet retired.

4. Better weather

If you’ve been shoveling snow for decades, it’s tempting to opt for a warm, sunny retirement home with milder winters. Not surprisingly, a new analysis of U.S. Census data by personal finance website SmartAsset found that five Sun Belt states — in order, Florida, Arizona, South Carolina, North Carolina and Tennessee — had the biggest influx of people 60 and older. 

But Richard Haiduck, who interviewed relocated retirees for his 2020 book Shifting Gears: 50 Baby Boomers Share Their Meaningful Journeys in Retirement, cautions that sunshine shouldn’t be the only factor in a move.

“Vacation spots fell off the list once people realized that they might be far from family, might be in a tourist location rather than a hometown and might not have access to those activities of greatest interest,” he says. “So, the appeal of a climate became just one of the final criteria.”

5. A lifestyle reboot

Starting fresh in a new locale can help you reevaluate your life and make changes, or simply jettison parts of your existence that you don’t really need and keep what makes you happy. 

In Smith’s case, he can still write books and magazine essays, without the expense of an office-suitable wardrobe. And instead of battling traffic, he’s able to spend summer mornings sipping coffee and watching the resident geese on his pond shepherd their goslings to keep them safe from the neighborhood fox.

There’s also the opportunity to experience life in a small town where a friendly manner is more important than expressing views on social media — stuff that, in his new life, just doesn’t matter. “We’re immersed in everyday life here, seeing people at the grocery store, or helping build their houses,” he says. “And it’s far less stressful.”

Get to know where you want to go

If you’re contemplating a retirement move, advisers say it’s important to do your homework before pulling up stakes. Evaluate your potential destination, and not just for the factors listed above. Check on things like local availability of health care, O’Neill says, and think about what you might miss from your present location. 

If possible, give your potential new retirement location a trial run, Essmann recommends. 

“The best advice I give my clients, if financially feasible, is to purchase a smaller place where they think they want to be and just go back and forth between seasons to see how much they like living there,” he says. Other advisers suggest renting first. 

And keep in mind that moves don’t have to be permanent. If you tire of your new locale, you can go “home” again. 

Just ask Theresa Immordino. When she retired as a real-estate agent in 2013, she left Takoma Park, Maryland, for Hollywood, Florida. But after several years, she grew disenchanted with the hot climate and terrified of the risk that cane toads, a toxic invasive species, might pose to her Jack Russell terriers. 

Immordino eventually sold her Florida house and moved back north to a historic district in Hyattsville, Maryland, a short drive from her old neighborhood. “I was living in fear every day until I could get it together and sell my house and get back,” she says. “And I loved Maryland, so there was no reason for me to go anyplace else.”

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