Avoiding Common Errors When Relocating for Retirement

Moving to a new state is a massive logistical and financial undertaking. Even when you select one of the most affordable retirement places, poor planning can wipe out your anticipated savings. Watch out for these common missteps:

• Buying a house blindly: Never buy a home in a new city without spending substantial time there first. Rent an apartment or a short-term rental for at least six months. This allows you to experience the true local climate, understand the traffic patterns, and determine if you actually like the neighborhood culture before tying up hundreds of thousands of dollars in illiquid real estate.
• Ignoring the Medicare Advantage network limits: If you are enrolled in a Medicare Advantage (Part C) plan, your coverage is highly regional. Moving to a new state usually means your current plan will not cover you, and you will need to enroll in a new plan during a Special Enrollment Period. Before moving, verify that your preferred new location has strong Medicare Advantage options with wide provider networks.
• Forgetting to calculate travel costs to family: Moving halfway across the country might save you $5,000 a year in taxes, but if you end up spending $6,000 a year on last-minute flights to visit your grandchildren, you have lost money. Factor in the cost and convenience of the nearest regional airport.
• Underestimating HOA and community fees: Many affordable homes in the Sunbelt are located in planned, age-restricted communities. While the home price might be low, the monthly Homeowners Association (HOA) fees can be exorbitant and are subject to annual increases. Always review the HOA’s financial health and historical fee increases before purchasing.