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Fidelity Analysis Of "Should You Move In Retirement"
Old 11-15-2011, 09:11 AM   #1
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Fidelity Analysis Of "Should You Move In Retirement"

https://news.fidelity.com/news/artic...for-retirement

"Deciding to move in retirement requires weighing several factors.

Most of us have fantasized about moving to "paradise" when we retire: the beach or the hillside that we love or the vacation spot that never disappoints. But moving in retirement is no small decision, and the best way to start the process, even if the answers seem obvious, is to ask yourself, "What would I gain (and lose) by moving?"
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Old 11-15-2011, 11:30 AM   #2
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Thanks for the link. I thought the advice is pretty good.
Quote:

Weigh the reasons
Many people want to live in a friendly and receptive place in retirement, such as a small town or walkable neighborhood, where they can meet new people and make connections.
  • What's to love.
  • Assess the trade-offs.
  • Establish your network.
Take the temperature
Consider whether your personality will fit in with a possible retirement destination. The energy level of the place and the proximity of your neighbors could impact how content you are in your new home.
  • Being local
  • Ready to join
  • Personal style
Dollars and sense
Sometimes retirement finances dictate a move because your current home is just too expensive for a long retirement. Odds are, your retirement will last longer than you expect.
  • Downsizing your life
  • Other options
  • Do the math
What not to do
Don't assume your choices are limited. With some homework and an open mind, you may be able to find a way to stay in your community or you may find exactly what you want somewhere else.
  • Don't be unrealistic
  • Don't forget to breathe
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Old 11-15-2011, 11:56 AM   #3
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If one has no experience moving, relocating or traveling before--and takes a great leap after--pulling the plug, there is great danger.

The only people I know who have done it at all have been experienced world travelers before and look at it as something they are trying, not necessarily committing to.

I have read of many who have jumped without sober consideration beforehand and regretted it. The older you start, the more you should prepare.

Even moving to a different state can be devastating for some. (No criticism intended. Some can do it and some cannot. Know thyself.)
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Old 11-15-2011, 12:03 PM   #4
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I also thought the advice was good. It starts at a more basic level than most retirement/RE oriented pieces, which assume that you are going to move and just concentrate on where you might move to.

"Fit" is very important, and IMO is not to be taken for granted. Most of us know who we are by retirement time. Yet sometimes I wonder when I see how all over the map some of the questions about lifestyle in retirement can be.

When we are 18 it is still possible to make a mistake about fit. Look how many unhappy college students transfer schools when they find out that drunken orgies are not what they really had in mind, or that everyone is too intellectual, or that the place is racially or ethnically cliqued up in ways that don't seem satisfactory.

When we are 48, or 58, or 68 likely we are even less open to whatever.

Ha
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Old 11-15-2011, 01:09 PM   #5
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The article has plenty of good suggestions of things to think about, but I think I’d put it in a different context. Instead of saying “moving in retirement is no small decision” and treating the whole thing as if you're making a lifelong commitment, I’d emphasize the fact that moving is an entirely reversible decision. You don’t have to make a large monetary commitment to the new area, you don’t even have to move all of your belongings. Put stuff in storage, rent out an apartment on a month to month basis in the new location, and see how you like it. If it doesn’t work out, it’s not really that big of a deal. Move back, or better yet, try out an entirely new place for a while.

Once we’re no longer tied to a job, I don’t think we should feel tied to a place if we think something else out there is better.
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Old 11-15-2011, 01:39 PM   #6
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Having moved (5000 miles) in retirement, I can pretty much relate to the article. A more "fleshed out" version would be helpful to those seriously contemplating such a move. I would guess "check lists" are available if anyone wants to do a little research.

We did do most of what is suggested in the article. Still, there are things one isn't prepared for. When you do the math, for instance, better throw in a contingency of as much as 1/3 just to be safe. Mentioned elsewhere, I have completed nearly a year of expense monitoring (yeah, I know, many of you do it all the time). I have been surprised at the extent of extra expenses due to our move. A big factor in our case is that, even after 4 years, we have maintained an "escape clause". A case could be made that, you really haven't moved if you could reestablish your "old life" with relative ease. You've just been on a very long vacation. We've burned only some minor bridges. Most of our bridges are still in place (and cost money!). That was our plan, and I suppose the main thing we got wrong is just how much that can cost. Still, if one could spend retirement "on vacation", enjoy it AND be able to afford it, what's the problem? We built in that 1/3 contingency and it looks like maybe a good move on our part. We ARE slowly dismantling some of the bridges (no fire involved, heh, heh).

As always, YMMV.
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Old 11-15-2011, 01:39 PM   #7
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funny this topic would come up. I spent last week in Aruba and gotta confess, I fell in love! Now, I don't know if I'd want to actually retire there 24/7, but I could see extended stays there.

I wonder if it would be worth it to get a house or condo there in a resort-type area, and have a rental agency rent it out for me? When I was there, we stayed at a timeshare that someone let us use. Even the timeshare price seemed fairly reasonable, but I think I'd want more of a sense of ownership.
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Old 11-16-2011, 01:18 AM   #8
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Originally Posted by Andre1969 View Post
funny this topic would come up. I spent last week in Aruba and gotta confess, I fell in love! Now, I don't know if I'd want to actually retire there 24/7, but I could see extended stays there.

I wonder if it would be worth it to get a house or condo there in a resort-type area, and have a rental agency rent it out for me? When I was there, we stayed at a timeshare that someone let us use. Even the timeshare price seemed fairly reasonable, but I think I'd want more of a sense of ownership.
Obviously, your situation might involve some numbers that could look compelling....but in probably most situations, I would almost never consider actually taking the plunge and owning outright.

The TOTAL costs of ownership (insurance, taxes, commissions to buy/sell, upkeep, dues, assessments, repair...the list goes on and on) would be quite a mountain to overcome with inconsistent rental income over the long haul, and leave you tied to a relatively large, probably relatively illiquid asset. For probably a similar cash flow potential, put the money into a good basket of dividend paying stocks and use the dividends to travel to Aruba. Probably better long-term growth of both principal and income with the diversified dividend stocks - and you don't have to keep traveling to the same place if you don't want to.
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Old 11-16-2011, 05:00 AM   #9
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Nice article that sums up the basics.

Although, it did not provide the most common advice to mitigate some of the risks listed.... rent and try it first (for a year or so) before committing to a purchase!

One objection might be: "I am not sure we can afford it, we need to sell our home to downsize".

But, can they really afford not testing it first? Or maybe that type of situation is really an indicator that the person cannot afford to retire or their expectations do not meet their real financial ability.
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Old 11-16-2011, 06:43 AM   #10
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Quote:
Originally Posted by MooreBonds View Post
Obviously, your situation might involve some numbers that could look compelling....but in probably most situations, I would almost never consider actually taking the plunge and owning outright.

The TOTAL costs of ownership (insurance, taxes, commissions to buy/sell, upkeep, dues, assessments, repair...the list goes on and on) would be quite a mountain to overcome with inconsistent rental income over the long haul, and leave you tied to a relatively large, probably relatively illiquid asset. For probably a similar cash flow potential, put the money into a good basket of dividend paying stocks and use the dividends to travel to Aruba. Probably better long-term growth of both principal and income with the diversified dividend stocks - and you don't have to keep traveling to the same place if you don't want to.
Every time I get the itch to buy a vacation home/rental, the logic you expressed always wins out.
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