Common Mistakes to Avoid When Relocating

Retirees frequently move in pursuit of lower taxes and warmer weather, but poor planning can turn a dream relocation into a costly nightmare. Keep these common missteps in mind:

• Assuming “No Income Tax” Means “Cheap”: States without an income tax must generate revenue elsewhere. Texas and Florida, for instance, frequently compensate for the lack of state income tax with significantly higher property taxes and sales taxes. Always run a comprehensive mock budget that includes property insurance, which has skyrocketed in many coastal and southern states.
• Ignoring Healthcare Quality and Access: That remote cabin in the mountains might offer incredibly cheap property taxes, but what happens when you need a specialist? High-benefit, high-cost states often host the nation’s premier research hospitals and extensive specialist networks. Moving to a rural area with a lower cost of living might save you money, but it could severely compromise the quality of care available as you age.
• Claiming Early to Fund the Move: Relocating is expensive. A major mistake is filing for Social Security at age 62 simply to generate the cash flow needed to buy a new house or cover moving expenses. This permanently locks in a lower benefit for the rest of your life. It is almost always better to downsize or use savings for the move and allow your Social Security benefits to continue growing.
• Failing to Establish Clear Domicile: If you move from a high-tax state to a low-tax state, your former state’s revenue department may audit you to prove you actually left. Failing to change your driver’s license, voter registration, and primary doctors immediately upon moving can leave you liable for taxes in your old state.