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Deciding
Where To Live In Retirement
Preparing
financially and emotionally for retirement and choosing where to
live can be a complicated process.
What
do you want your retirement to look like? Do you dream of retiring
in a condo on the fifth green or do you envision a maintenance-free
loft in the city? Do you want to continue your education? Where
can you afford to live and what should you save for your health
and long-term care? You may want to start the decision-making process
by simplifying your priorities. Some of the most important attributes
of a good retirement location include traditional items such as
a reasonable cost of living, lower-than-average taxes and access
to top-notch medical care. But keep an open mind to other considerations
that are of growing interest to seniors, such as vibrant college-centered
communities filled with cultural and educational activities and
smaller towns that can help stretch retirement dollars further than
the more crowded, larger communities.
Back
to school
Many
retirees are choosing to live out their golden years as vigorously
as they did when they were in college. Spurred, perhaps, by growing
research suggesting that mental activity is a "fountain of
youth," college-affiliated retirement communities have sprung
up in at least 50 towns nationwide, linking retirees with notable
schools such as Notre Dame, Cornell University and Penn State, to
name a few.
The
retirement communities and campus projects vary widely. Some are
condominium developments, frequently built with community centers
on site. Others are continuing care retirement communities, combining
apartments with assisted living and nursing home facilities, designed
for people's changing needs from early to later retirement.
Walk
the streets of most college towns these days and you can see that
the demographic landscape has dramatically changed. Seniors now
mix with coeds, attending classes and sporting and cultural offerings.
According to CNN Money, many universities have further responded
by creating academic courses and special pricing specifically for
seniors. While a decade ago, only a few dozen colleges offered such
programs, today programs for seniors are in place in more than 300
institutions nationwide.
According
to Consumer Reports, other factors that also contribute to the growing
interest in retirement in a college town include inexpensive food
and entertainment, teaching hospitals and lower crime rates. Another
important consideration is the opportunity to build intergenerational
and diverse relationships and mentoring that benefit all generations.
Critics,
however, say that college-linked retirement communities are too
costly for the average person. Supporters say that prices will fall
as they become even more common. Monthly fees can be as high as
$3,500, including meals, housecleaning and long-term medical care
at The Village at Penn State, for example.
Other
options
According
to Consumer Reports, retiring in resort or military towns may not
be as desirable as college towns because they tend to be crowded,
high-traffic areas with higher taxes and consumer prices. They do
not offer the educational and cultural opportunities many seniors
are seeking.
There
is also a growing national demand for retirement housing for younger
retirees, given that the first baby boomers are now reaching 60
and will soon be retiring. With a desire for amenities such as social
clubs and gyms, but without the need for daily medical services,
age-restricted developments are expanding nationwide that are not
affiliated with nursing homes or assisted living facilities. According
to the National Association of Home Builders, about 60 percent of
such developments for those age 55 and older are now outside the
Sun Belt, with the growth in northerly states driven in part by
many buyers' wishes to stay closer to family and the communities
where they spent their working lives.
Tips
for getting started
Before
you jump headfirst into buying a retirement home or making a commitment
to a retirement community, consider renting your retirement home
for one year before buying. Once you live there, you may find that
you like it more as a vacation spot than as a home. Secondly, find
a place that the family is going to want to visit, with a convenient
airport and attractions for the grandkids. You do not want to isolate
yourself from your loved ones while in retirement. Also, be sure
to know the rules of the retirement community before you settle
in. There are often regulations regarding decorating your home's
exterior and garden, for example. Finally, don't buy too far in
advance. Over five or 10 years, a community can drastically change
while you are waiting to retire. In addition, your interests and
health may change and you may need something completely different
by the time you actually are ready to move in.
Health
care costs and financial planning
While
health care costs shouldn't be the deciding factor of where to relocate,
it is something retirees need to consider. Retirees spend an average
of 20 percent more for nursing home care in urban areas than in
rural and suburban areas, according to CBS Marketwatch. In some
states, the costs of urban vs. non-urban care differ by as much
as 40 percent. Furthermore, one-third of Americans turning 65 in
2010 will need long-term care at some point for three months or
longer, and almost one-fourth of that group will need it for one
year or longer, according to the same source.
Whether
you dream of retirement in a vibrant college town, plan to downsize
in your old neighborhood or expect to move to a retirement home
or an assisted living facility, there are many financial considerations
including your budget, investment strategies and protection planning.
Be sure to work with a qualified financial adviser who can help
you create or update your personalized financial plan and help you
integrate your short- and long-term retirement goals.
Patrick
Lange is a personal financial adviser with Ameriprise Financial
and can be reached at (863) 993-0700.
