Where To Live? Retirees Mull More Than Florida Option

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Special Report: 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 retirement 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 BestPlaces.net .

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 adventures."

• 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)," he said.

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 years.

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.

Southward

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 at InternationalLiving.com .

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."



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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