Moving, By The Numbers

How many places will you call home in retirement?

That’s the intriguing title of an article I just read by Joseph Coughlin, PhD, director of the MIT AgeLab. Coughlin came up with five, a number that really jumped out at me.

Here’s how he breaks it down:

Move #1:

Downsizing from the home where you raised a family to a smaller place that’s cheaper to heat, cool, furnish, clean, maintain, etc.

Move #2:

Relocating to a new region to follow children and/or grandchildren. I’d add relocating to a different climate, regardless of where the extended family lives. I know plenty of Northerners who are happy to retire in Florida or Arizona, and an increasing number of folks from the Deep South who are moving to North Caroline or Virginia, where the climate is more temperate.

Move #3:

Moving into a home that’s set up to accommodate physical limitations. If multistory, these houses have a ground-floor master suite; they also may be fitted with fixtures and appliances designed for arthritic hands and shower enclosures that can accommodate a walker or wheelchair.

Move #4:

Switching to a multigenerational home (perhaps with an adult child). I’d add getting a housemate to share expenses and look out for each other if living with a family member isn’t an option.

Move #5:

Senior housing, whether assisted living or a full-on nursing home.

That’s a lot of moving.

What I take away from this piece isn’t that you’ll necessarily move five times in retirement, but that you should know how easily this can happen if you don’t plan ahead. Certainly it makes sense to think about floor plans and faucets and steps if you downsize, whether you’re moving far from home or not.

Then again, I’m hearing from people who actually are upsizing, exchanging a pricy house in a city or expensive suburb and buying a house full of space and luxury features (and maybe land) in a cheaper location. The average price of a 2-bedroom condo in San Francisco is well over a million dollars; that can buy a 4-bedroom mansion in some gated golf communities on the Gulf Coast and still leave you with $500,000 in cash.

That’s a nice boost to your nest egg.

Remember, though, that you’ll have to get good tax advice to understand the capital gains and other tax implications of selling high and buying lower (and maybe bigger).

The point is to think carefully about your options before you do something wrenching, like selling a house you’ve lived in for 25 years and moving to a new community where you know few people.

Where you live is not just about money; it’s also about factoring all the adjustments you’ll have to make in a new place in a new community.

Read the full article here.