How to pick the best place to retire: 4 questions to ask yourself
Do all those magazine lists of “retirement-friendly cities” make your head spin? The amenities, the weather, the taxes, and even the number of bookstores all get taken into account. Of course, amenities matter, as do taxes (and bookstores). But when considering where to retire, it might be wise to tap into more personal priorities—even before running the financial numbers.
Here are four guiding questions that can help as you (and your spouse or partner) decide on the best place to retire. These aren’t meant to replace important financial and logistical considerations, but to supplement them.
Key Points
- Think about the people you want to live near, and why.
- Share retirement dreams with your spouse.
- Reconsider relocating. Not everyone needs to make a big move.
1. Who matters to you?
As you age, the people you feel closest to—and can count on—are vital to your long-term well-being. So as you decide where to retire, consider who you want nearby.
You might think of your siblings, adult children (maybe grandchildren), dear friends, or your spiritual or religious community. In addition to weighing the emotional sustenance of these relationships, consider them in light of other needs that will likely emerge as you age:
- Who might be supportive and available if you or your spouse have health or mobility issues?
- Whom would you trust to help you financially if you needed help, or if basic money management became a problem?
- Who are the people who make you feel most alive, who make you laugh, who—figuratively or literally—help ease life’s burdens?
The “right” answer will become clearer as you begin having conversations with the people in your life now. Although some people are perfectly happy retiring to Costa Rica or Portugal and leaving friends and family thousands of miles away, others would be lonely so far from their loved ones. It’s up to you to balance location and people if you plan to move.
Be honest with yourself. For example, many retirees spend their retirement years providing free day care and babysitting services for the grandkids. And that’s OK, as long as you’re doing it because you want to. Remember: Retirement is about you.
2. What do you (both) plan to do?
You’re really looking forward to starting a local business. Your spouse can’t wait to travel. You want to take care of the grandkids. Your beloved hopes to see them for the holidays. You love hiking in the mountains. Your partner loves the beach. As many couples discover, what one person imagines for retirement can be starkly different from what their spouse is thinking.
Before you can decide on the best place to retire, it’s important to get each person’s retirement “to-do” list on the table. Write down your must-haves (or hope-to-haves) separately and swap lists. Then, talk about it. Frequently.
A 2021 study by The Harris Poll found that although 76% of couples have discussed general retirement issues, they haven’t gotten into the specifics. It may take some time to arrive at a shared vision for where you want to live in retirement, as well as how you’ll be occupied.
And if you’re not on the same page? Be prepared to compromise.
3. Where do you want to relocate? Maybe right here
As you think about the best place to retire, don’t overlook the appeal of staying right where you are. Many people don’t relocate, according to a study of homeownership patterns by the Center for Retirement Research, with some 53% of homeowners in their 50s remaining in their homes until they die.
If you’ve paid down or paid off your mortgage; if your tax bracket is comfortable; if you’re connected to your community; and if you have all the amenities you need for the foreseeable future, do you really need to move? Or could you stay in the same area and downsize?
There could be real financial value in staying put. The same study points out that some retirees have built up enough home equity that it could provide a cushion in retirement. (The counterargument, of course, is that you may gain even more of a cushion if you move or downsize.) It’s important to give yourself the freedom to make the best choice, even if the answer is in your own backyard.
4. When would you move?
There are shelves full of books in every library about how to decide when you can afford to retire. It’s a complex calculation. But you also want to connect the dots between major financial decisions and their impact on where you might want to live. Some milestones to map out include:
- When will you start taking Social Security? The longer you wait, the more your monthly benefit will be. But can you afford to wait, and how might that financial choice change where you live? You might decide to wait longer before moving if you know you’ll get a bigger Social Security check at some point.
- When will you start taking required minimum distributions (RMDs) on your retirement accounts? This can alter your income and tax picture. Will it also affect your choice of a retirement community or deciding where and when to move?
- If you’re planning to sell your home and relocate, the timing has financial factors that directly play into your location decision.
There are no right answers here. Instead, you’re looking to gain insight into what is right for you.
The bottom line
Deciding on the best place to retire is a major decision that involves many factors from all aspects of your life. It’s no wonder there are countless lists that focus on practical issues like the number of medical facilities, overall safety, state and local tax rates, proximity to a college, and so on.
Those practicalities are important to consider, but it’s also key to explore the personal priorities that ultimately shape something a little harder to quantify: being happy wherever you are.