Maybe you have a good base of friends where you live now, but your children have moved away. As they continue to grow families of their own, a thought may cross your mind. Should we move closer to our children (and grandchildren)? If so, what are some financial considerations to keep in mind?
Consideration #1: Cost of Living
Do a cost-comparison between where you live now and the province, territory or city in which you’re considering moving to. What are real estate prices like? You’ll want to determine how monthly expenses like insurance and groceries will vary as well.
Check out local restaurants, public transportation costs and any other common expenses that will impact your budget.
Consideration #2: Housing
One of the biggest considerations you’ll need to make is what your living situation will look like. Will your child move you into an in-law suite? Or do you need to weigh the pros and cons of renting versus buying a home? When you’re looking for housing, you’ll also want to consider functionality. Will you be hosting celebrations and holiday dinners in your home, or do you primarily plan on spending time over at your child’s place? If so, then you may find it best to downsize to a condo or apartment.
If you want to be able to have grandchildren sleepover, host dinners and entertain friends and family, you’ll want to look for a piece of property that can accommodate your needs.
How do you plan on funding this new home purchase? Will you pay in cash or take a mortgage in retirement? Would it be OK to draw from your retirement assets to fund the new home?
Consideration #3: Resources & Discounts for Retirees
Some areas offer resources for senior citizens and retirees, such as community centers, programs and volunteer opportunities. If staying active in your community and connecting with other retirees is a priority, you’ll want to check ahead of time to see what opportunities are available to you.
Additionally, you may find that the area you’re moving to offers added perks for seniors, such as discounts on public transportation.
Consideration #4: State and Local Taxes
If you’re considering staying in your province, checking into what your state and local taxes will look like may not be a top priority. But wherever you’re considering heading to, check into what you can expect your taxes to look like. In addition, you’ll want to look into other tax obligations including sales, property and estate taxes. Depending on where you move to, taxes can vary greatly across the board.
Some states tax retirement benefits differently. This can have substantial impact on your net income and is something that should be understood before you commit to moving.
Your Next Steps
If you’re struggling to determine whether or not you should move closer to a child, or if your budget will allow for it, you’ll want to speak with us before you make the commitment. Together, we can determine the best decisions for living comfortably in retirement. We have planning software that takes into account state taxes and can demonstrate the impact downsizing or taking another mortgage could have on your retirement savings.
The first step in working with us is to schedule an introductory phone consultation. You can do so by clicking on the link below.
Click here to schedule your phone consultation
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.