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Investing Specialists

Age in Place or Relocate During Retirement?

The decision isn’t just financial; family situation, geography, and health considerations also play big roles.

Morningstar.com's Discuss forums are dominated by discussions that are mainly financial: how much to invest in bonds, for example, or how to calibrate a sustainable spending rate during retirement.

But many decisions that can have a big financial impact aren’t strictly financial: how much support to provide for financially struggling family members, for example, or whether to purchase long-term care insurance.

This week we asked readers to delve into another important lifestyle question with financial implications: whether they plan to "age in place," as the saying goes, or whether they plan to relocate for all or part of their retirement years due to safety, familial, or financial reasons, among others.

Ultimately the decision is a highly personal one, but the discussion was rich in insights. Some respondents said that staying put in the home they occupied during their working years was their plan all along; they had always lived modestly so felt no need to downsize. Other posters said they planned to relocate--or had already done so--to another residence that was better suited to the aging process. Still other posters said this issue is top of mind for them right now and they’re downright conflicted: While they love their current homes, they know that they aren't ideally suited for an older retiree. Respondents also discussed how their views about the right place to live had evolved throughout their retirement years.

To read the complete thread or share your own views on this important topic, please click here. Here's a summary of what respondents had to say.

'There's a Lot of Value in Staying Where I Am'
For Dragonpat, never supersizing the family home means she feels little need to downsize in retirement. "My home (where I raised my two children) is a ranch/rambler, all on one level… I guess that's key: don't upsize and then you won't have to downsize later."

LarryG and spouse have stayed put in the same place, even though it doesn't necessarily fit the image of an in-retirement dwelling. "We plan to remain in our house which we purchased in 1971. [We are b]oth well into our 80s and are able to handle the three stories."

Other posters acknowledged that their longtime homes are impractical--costly and labor-intensive to maintain--but they're staying put because they love them. "[Our] house is way too big for two retired persons," homebrewer wrote, "but the yard is beautiful and the pond is fun to swim in and skate on."

Proxysteve's post makes clear that couples need to make peace on this issue; one may be more practical while the other feels an emotional tug to stay put. "I would prefer a new, smaller place in five to 10 years. I might even prefer a new, smaller town once our grandkids are older (in about 15 years). However, my wife does not agree. She is emotionally attached to our house. In this case my wife is always right. We will do whatever she wants."

For stockvapors, having a busy social and community life is more important than scenery. "[M]y friends, clubs and activities are more important to me than a view of the ocean. My house is age-friendly and not too big so I can stay here for a long time. And if I get to longing for an ocean or mountain view, I'll rent a condo and take a long vacation to get it out of my system."

Other posters noted that staying put in their current homes makes good financial sense. Acamus wrote, "The apartment I rent has rent control. The city rent board limits annual rent increases, generally to less than inflation. I had the good fortune of becoming a tenant in '08 and locked in a low rent. There's a lot of value in staying where I am."

'Much Better Situated for the Challenges and Joys of Our Retirement Years'
Yet other posters said they planned to relocate, or had already done so, to a more suitable in-retirement home.

Recent retiree Juris2 and spouse have compiled the following shopping list for the future family home: "[We are] considering how to optimize (a) cost of living, (b) aesthetics of the location, (c) convenience (proximity to shopping), (d) accessibility, i.e., a one-story abode, and (e) closer to where our kids live."

Indeed, relocators frequently cited proximity to family, especially children and grandchildren, as a top motivator. Dtconroe wrote: “When I retired, my wife and I came to the conclusion that our two-story home was too large, too energy-inefficient, and too far from our family and closest friends. We relocated within two years of my retirement to the city where my daughter, youngest grandchildren, and closest friends lived. We bought a more energy-efficient one-story home, have many more interactions with our family and friends, and are much better situated for the challenges and joys of our retirement years."

Bubbygator and spouse are considering another relocation for their later retirement years, but they've never regretted the decision to live near kids and grandkids for the first part of their retirement. "We made this decision 16 years ago: moved to be near our children. That has worked out marvelously; we’ve been an intimate part of our grandchildren's lives."

Yet Juris2’s comment reflects the fact that adult children frequently live near urban centers for better job opportunities; those locales can be pricey for retirees. "It's too expensive to live near the kids," this poster said, "but we'll move to a place they're more likely to visit or that has easy transport to where they live."

Meanwhile, texasboy points out that adult children may not stay in the same place. "Thoughts of moving near children/grandchildren wane with realization they may need to move elsewhere after we do," he noted.

'We Have the Flexibility to Make a Move'
For doctorWu, high property taxes are a key reason to consider relocation. "I moved to a very nice town with excellent schools 26 years ago. The problem is my kids left those schools 15 years ago, and we're still here paying the property taxes to support those schools. The school's cut is about $700/month. On the plus side, some younger couple will want to buy our house…"

Access to high-quality health care was a key motivator behind leftcoaster and spouse’s move into a retirement community. "While younger than many in a retirement community, we both had health scares in the last couple of years. With no children and excellent retirement communities nearby, it was an easy choice. We had high expectations, but they have been exceeded. No worries about termites, roof leaks, yard maintenance, tree trimming, appliance replacement, etc. Simply close the door and go traveling. Great fellow residents, great food, and great medical care if needed. No regrets!"

Seaside1 and spouse are staying in the same geographic locale, but building a more age-appropriate home. "Our current home is a two-story and not practical for an aging couple. While we are remaining in the same state (Florida) that we have resided in for 30 years, we are in the process of building a slightly smaller, single-story retirement house in an area in which we previously resided."

Logistical and safety issues have also prompted Counterpoint and spouse to start the transition to a different home. "We would love to stay in our house until the end, but we know that we can't. Even though we are both only in our mid-50s, my wife's impaired mobility has forced us to think about this much sooner than we probably otherwise would have, and since we are no longer working, we have the flexibility to make a move."

Jomil believes that the change in perspective that accompanies a move can be valuable. "It motivates me to avoid accumulating stuff, meet new people, and change the view from my windows. Every time I move, I learn things about architecture, construction, and neighborhoods."

'It Is Hard to Predict What Your Needs Might Be'
For other respondents, the decision about whether to relocate for retirement is ongoing.

EnvEng wrote, "[I] am torn about moving. The home is OK but the neighborhood has changed a lot and not to my liking… For me, it's an emotional hurdle. I just have to commit to doing it."

BMWLover and spouse have moved to a "downsizing condo," but harsh winters there mean they may relocate again before it's all over. "[F]or now, we may age in the same community but there is the distinct possibility that we will not."

MountainMan astutely observed that it can be difficult to predict what retirement holds, so it's also difficult to predict what the "right" living situation would be. "We have seen people move away who probably did not think they ever would, because one spouse passed away, one or both had a decline in health, or they wanted to be closer to their kids. The best-laid plans…"

Finally, SmilinginSC's post (one of the must-reads in this thread), points out that many retirees' needs and wants will continue to evolve throughout retirement. "[I]n spite of the best-laid plans, it is hard to predict what your needs might be as you age. I think early retirement and middle retirement and late retirement may all provide different lifestyle opportunities if we are open to change and willing to take on the challenge. As for us, we're still sitting on the fence. Our kids worry we will wait too long. I worry we will regret leaving too soon."