7 Things To Look For in a Retirement Destination If You Want Your Savings To Last
According to U.S. News & World Report’s Best Places To Retire in the U.S. in 2022-2023, Lancaster, Pennsylvania, is the No. 1 retirement destination. The ranking is based on factors like current housing affordability, tax rates and healthcare. However, there’s much more you need to consider in a retirement destination if you want your hard-earned nest egg to last the rest of your life.
You also need to look at factors like the financial effect of long-term housing trends, whether there’s a thriving economy, and what quality of life you can expect. Educating yourself on all of these elements can not only help you find a place that will allow you to stretch your retirement funds the furthest — but also will be a destination where you will enjoy living. Here are eight things to look for in a retirement destination if you want your savings to last the rest of your life.
Tax-Exempt Havens
“Choosing a retirement location with advantageous tax policies can have a significant impact on the longevity of one’s savings,” said Michael Hammelburger, CEO of The Bottom Line Group.
“These havens could include areas with low or no income taxes, as well as areas with lax property tax regulations. Exploring jurisdictions that offer tax breaks on retirement income, Social Security benefits and investment gains can help retirees make the most of their money. Investigating locations with innovative tax incentives tailored specifically for seniors could make a significant difference in long-term financial sustainability.”
Cost-Sharing in the Community
“Seeking retirement locations where like-minded individuals participate in cost-sharing arrangements can also help to extend the life of retirement savings,” said Hammelburger.
“Cooperative living arrangements, shared housing initiatives and co-housing communities allow resources to be pooled, reducing individual financial burdens. This approach creates a supportive environment by encouraging retirees to work together to navigate living expenses, healthcare costs and other financial challenges. Adopting this model of community-driven frugality provides a unique and proactive strategy for preserving retirement funds over a lifetime.”
Cost of Living Variability
“It’s not just about finding a place with a low cost of living; it’s about understanding the cost of living variability,” said John Grace, president and founder at Investor’s Advantage Corporation.
“Some destinations might seem affordable initially, but if they’re prone to rapid inflation or escalating housing costs, your savings could quickly erode. Look for places with a stable economy and moderate long-term cost projections.”
Healthcare Infrastructure and Costs
“Healthcare expenses can be one of the biggest retirement budget challenges,” said Grace. “Beyond access to quality healthcare, consider locations with a well-regulated healthcare system and affordable medical services. Research how health insurance costs vary and whether the chosen destination has adequate medical facilities.”
Economic Resilience
Grace said that because retirement can span several decades, economic conditions will likely fluctuate during that time. “Opt for a destination with economic resilience, diversified industries and a strong job market,” he said. “A thriving local economy can contribute to a stable environment for your retirement savings.”
You might also want to look for a place that offers plenty of desirable part-time job opportunities for retirees, in case you decide you want to earn some extra income.
Long-Term Housing Trends
“An often overlooked aspect is the long-term housing trends in your chosen destination,” said Grace. “Are property values increasing steadily? Are there housing options that align with your budget and preferences? Consider potential options for downsizing or adjusting your housing situation over time.”
Quality of Life Factors
“Don’t overlook quality of life factors such as climate, leisure activities, proximity to family and friends, safety and overall community vibe,” said Michelle Delker, founder of The William Stanley CFO Group.
“If you enjoy your surroundings and the lifestyle it affords you, you are likely to have lower auxiliary expenses for travel or seeking out distant activities. Thus, the best retirement location shouldn’t just make your money last, but also enhance the enjoyment of your retirement years.”
Additional Retirement Destination Advice
“To make a well-informed decision, consider seeking advice from financial advisors who specialize in retirement planning and are knowledgeable about the cost-of-living in different areas,” said Delker.
“It’s also advisable to test out a location for a significant time period before making a commitment. Try a short-term rental first, or consider a part-time relocation initially. This will help you determine if your preferred destination suits both your financial plan and lifestyle in the long term.”
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