Retirement planning involves much more than simply crunching numbers with projected investment performance. It’s more than figuring out a way to build wealth as quickly as you can.
One of the key questions that you need to ask yourself when planning for retirement is: “Where will I live after I retire?” While this sounds cut-and-dry, it can end up being quite complicated. Some people will continue to live where they are during their working years, especially if it is something like an inherited farmhouse. Many others, however, will end up somewhere else, either because of health problems, for convenience, or because they want to downsize.
If you are married, of course it is vital to have this discussion with your spouse well before retirement creeps up on you. When you are married, retirement planning should always be based on mutually enthusiastic agreement.
Whether you are married are not, some of the questions to consider when thinking about where you will spend your post-retirement years are:
- Do you want to be near family?
- Do you want to change scenery, e.g. from the city to the country or from the country to a suburb?
- Do you want to downsize on house, or do you suspect you will be receiving a lot of visits from family and friends and therefore want to keep a larger house?
- How much travel do you plan to do? If you plan to be off in an R.V. most of the time, your “landing pad” should be small, inexpensive and easy to maintain.
- If your retirement planning includes leaving your career at the typical age of retirement, do you want to live in a retirement community?
- If you are living in a more expensive area, will you be able to continue to afford the property tax and related expenses on your projected retirement income?
To get your mind going in the right direction, here are a couple of real-life examples.
A friend of mine who plans for her and her husband to be retiring at the typical age of around sixty – ten years from now – currently lives on a small ranch in north Texas. As quiet and beautiful as the area is, they are contemplating selling it off once they retire and purchasing an R.V. Their plan? To park the R.V. on their grown children’s respective properties, in turn, so that they can be near their grandchildren without disrupting their kids’ family and household routines.
Then there is my husband and I. Our retirement planning is completely non-conventional, bringing us to early financial independence. In a couple of years, we plan to get out of the suburbs of Dallas and homestead in the country.
My husband doesn’t want to be more than a few hours from his brother and relatives in Louisiana. But we both agree we don’t want to “retire” to the flat country that surrounds the suburbs where we currently live. So we are looking at rural property in a neighboring state that is much cheaper than in rural Texas, but also much more scenic.
As you work on your retirement planning, be sure to ask yourself where you want to be living once you are out of the work force.