Should You Relocate in Retirement?

Have you had a career that took you across the country or maybe even around the world? Did moving from place to place create a sense of excitement and adventure or was it more a source of anxiety and uncertainty?

For some federal employees, a retirement move conjures feelings of enthusiasm and anticipation. For others, retirement is a time to stay home and be close to long-time friends, families and activities. Which option is for you? Realtor.com estimates that 85 percent of retirees stay put in retirement for various reasons, including a history of social connections.

Others, though, follow the urge to move someplace new. Moneyrates.com, a personal finance website, publishes an annual study of the best states for retirement, based on an analysis of five factors:

• Healthy environment
• Personal security
• Local economy
• Weather conditions
• Popularity with older residents

“Obviously, personal preferences should play a major role in choosing a place to live in retirement,” says Richard Barrington, senior financial analyst at MoneyRates.com. “Still, by presenting an analysis based on cold hard numbers, we hope the MoneyRates study gets people to think about what practical factors they should take into consideration when choosing a place to retire, and possibly gets some people to think about places that might not otherwise have occurred to them.”

Some of the best states are no surprise, such as Florida (No. 4) and Arizona (No. 3), which many employees look at when considering a retirement move. The main attraction for both states is the weather, but in both cases, the drawback is the crime rate. According to this study, the No. 1 state for retirement is Iowa, which ranked above average in all five categories, although not in the top 10 for any of them. Hawaii was ranked No. 2, although the cost of living could prevent many from moving there. Maine rounded out the top five.

MoneyRates.com also ranked the bottom 10 states for retirement using the same criteria. Alaska ranked as the least desirable retirement destination due to extreme weather and a poor economy. Numbers two through five on the worst states list were Nevada, Louisiana, Washington and Illinois.

So where do most federal retirees end up? According to a July report in the magazine of the National Active and Retired Federal Employees Association based on Office of Personnel Management Data, California ranked No. 1 among federal retirees with 215,115 total annuitants on the rolls. Florida came in second with 179,853 retirees, followed by Texas (175,967), Maryland (163,906), Virginia (145,117) and Pennsylvania (109,655). Only 21,411 federal retirees live in Iowa. North Dakota, Wyoming and Vermont have the smallest number of federal retirees.

Besides weather and the local economy, other reasons for making a retirement move, according to U.S. News and World Report, include downsizing to a smaller home, moving to a less expensive locality, living closer to family and friends, the need for a home and a location that will accommodate the limitations of illnesses of aging, and an interest in pursuing a new lifestyle that isn’t available in your current location.

In the end, the decision about where to retire depends largely on your state of mind as you contemplate your post-working life. For further exploration of that issue, see my column from last October, Are You Mentally Prepared For Retirement?

Photo: Flickr user Giuseppe Milo