Like it or not, as retirement day approaches you’ll need to make decisions about where you will live. There are many options open to you. While you don’t have to make any decisions right now, it’ll pay dividends to examine some of the alternatives now, before you’re into retirement. Use the Relocation Questions and Considerations worksheet to weigh your options and the “Action Planning: Accommodations” section of the Lifestyle Action Plan to record the actions you’re going to take.
Your financial position when you retire will be extremely important. The better the financial position you’re in, the more options you will have. If you’re moving out of Canada, you’ll also have to plan for the effect your move may have on medical coverage, Old Age Security (OAS) benefits and the tax treatment of your retirement income.
While your financial status is important, so too, is the location. Do you want to live in another country for all or part of the time? Do you want to live in another city or province? Do you want to remain in your current city? Selecting the location can be a function of the retirement activities that you want to pursue. For example, you can't ski in Florida and you can’t play golf in Collingwood or Fort McMurray from November to April.
Location might also be a function of your personal relationships. You might consider moving closer to your children, grandchildren, close friends or relatives. Another option is moving to a retirement community offering the lifestyle and activities that are of interest to you.
Your accommodation choices in your early retirement years may change as you get older, for health or other reasons. Be flexible. Don’t cross off living on acreage or a houseboat today, because you don’t think it’ll be possible when you reach age 75.
You probably still have a reasonable amount of time to decide where to live. Use your vacation time to explore and find out about areas that could be of interest. Visit these places in the off-season too. Talk to real estate firms; find out about average rainfall, humidity, average temperature in each season, whether the area is subject to hurricanes or earthquakes, what the crime rate is and the general cost of living and taxes.
The time to do your initial exploring is now. There may be a number of places where you think you might like to live, but when you find out more about them, you may cross them off your list. You won't have to worry about them again.
If you have a spouse/partner make sure you are respectful of each other's wants and needs when you’re looking at locations.
Once you decide on a location, ask your real estate agent to keep you informed of housing prices based on the kind of accommodation you’ll be seeking. Look at all possibilities, such as renting an apartment, purchasing a condominium, living in a retirement village, a mobile home, a semi-detached, a townhouse, a cottage or bungalow or rental properties such as duplexes. Having a good idea of the price range will help considerably as you start your final budgeting for retirement.
If you decide to remain in your present home, you’ll be faced with far fewer changes than if you move. If there are any major repairs such as replacing a roof, it might be useful to have the repairs completed while you’re still employed and getting a paycheque.
If you plan to stay in your home and it’s a little larger than you really need, consider the following. Have you taken into account that property taxes, electricity and heating expenses are subject to rising costs? Increases in costs apply to any accommodation but the larger the property, the greater the costs.
If you’d like to stay in your home but are a bit tight financially, consider a boarder if you have the facilities. Obviously, you’ll want to be very cautious and careful in screening and checking the references of anyone that you bring to live in your home. However, if you attract an interesting and compatible person, a new dimension may be added to your life.
Make sure your cash flow is flexible to meet all of the major contingencies that are involved, such as packing and moving costs, major appliances that you may have to purchase, replacement or repair of your car and other unforeseen expenditures.
Consider paying off any mortgages before you retire. Lending institutions have a variety of options that may fit in with your plans. Your financial security will be greater if you go into retirement free of debt. If you carry a mortgage into retirement, ensure you’ve factored the payments into your budget. For those planning to live in rental accommodations, be aware of the impact inflation will have on your rental payments over time. Look into subsidized housing to see if you might qualify at any time throughout your retirement.