Race To Retirement
Should I stay or should I go? That has long been one of the
big questions retirees and pre-retirees grapple with as they
think about where to live.
Most are creatures of habit. A report issued last year by the
Center for Housing Policy noted that nine out of 10 older
Americans want to stay in their homes indefinitely.
Richard Johnson, director of
policy research at the Urban Institute, analyzed census data from
2000 to 2010 and essentially found the same stay-at-home trend
through the decade. Fewer than 2% of Americans 55 to 64 who
described themselves as retired moved across state lines.
Going Nowhere Slowly
As retirees age into their 70s and 80s, the likelihood they'll
move a long distance becomes even less likely, studies show.
Income plays a role.
"We know that higher-income people are more likely to
relocate," Johnson said.
When retirees do opt to move, their migration patterns have
become more diverse.
While Florida has long been the most popular destination for
retirees, it's attracting a smaller slice of the pie as retirees
fan out to other warm spots with low living costs.
In 1990, one in four retirees 55 to 65 moved to Florida from
another state. By 2010, the Sunshine State's draw was down to one
in seven, Johnson says.
Taking some of Florida's share: the Carolinas, Phoenix, Las
Vegas, Atlanta and Dallas, he says.
"Most people realize that retirement isn't just one thing
people do," said Bert Sperling, president of
He sees it as three periods:
The go-go years.
Still energetic and healthy in their 60s and into their 70s,
retirees might want to "go trekking in Nepal or live in Paris for
a while," Sperling said.
He added: "You might not even have a home that is that
important to you. It could be a base from which you can have
The slow-go years.
Starting in their mid-70s, retirees might prefer being closer to
family and good health care.
The no-go years.
This is when retirees stay put.
The Sunbelt isn't the only magnet for those who want to move.
Younger retirees craving a vibrant urban life are heading to big
cities such as New York and Chicago, Johnson says. "We did not
see this as much before," he added.
Sperling thinks he knows why: "Cities these days are much more
of an adult playground than they were 20 years ago."
Among the lures: concerts, art museums, theater, good
restaurants and mass transit.
But urban life on a fixed income can drain budgets, especially
for housing. Sperling suggests heading to a location within an
hour's drive, where costs can be a third to half as much. "I've
heard people say it's the only way they can afford (city life),"
And if they've lived in a major city for years, they're still
close enough to family or friends and routines built up over the
The way Brad Hunter, chief economist with housing researcher
Metrostudy, sees it, you can pocket a small fortune in a housing
move that involves a sale.
His favorite example: By selling a mortgage-free home in New
York or New Jersey for $800,000, even if it's down from its peak
value, owners could pocket $500,000 by buying a new home in
Florida for $300,000 cash.
"In Florida, the overall cost of living is lower and you can
buy a lot of house for your money compared to New York," Hunter
said. Low taxes and other cost-of-living factors matter to
retirees "even if they have a lot of money. Californians
sometimes say they will retire to Nevada because property taxes
are lower there."
In the past 12 months, prices have started rising from their
bottom in Florida and other hard-hit Sunbelt markets. That's
prompting retirees still on the fence to "buy now as the market
starts to rise," Hunter says.
Moving out of the U.S. altogether to places such as Central
and South America could save retirees more.
"You can actually double the buying power of your fixed income
by moving offshore," said Dan Prescher, special projects editor
Seminars by InternationalLiving on retiring to popular
low-cost destinations such as Ecuador, Panama and Costa Rica have
been drawing growing numbers of attendees.
"For an event in Quito (the capital of Ecuador) last month we
had close to 500 people," Prescher said.
Moving abroad isn't for everyone. "You have to have a little
sense of adventure," he said. "Some people don't have a big
tolerance for novelty. And some people don't want to be that far
from their families."