Guidance

RESOURCES TO HELP SHAPE YOUR FINANCIAL FUTURE

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Lorraine Walker, CFP®
First Vice President
Wayne Hummer Investments

Monday mornings may find us daydreaming of the time when we can begin our well-deserved retirement at that beach house or perhaps in that cozy cabin in the mountains. As you refocus on reality, keep in mind that the life events that get you to those places, retirement and relocation, must be carefully planned and can be among the most stressful events a person will face.

Selling or Staying
Deciding whether to sell the family home is a very difficult decision. A lifetime of memories and accumulated belongings must be sorted through. Many retirees hold onto their family home in the belief that their children and grandchildren will visit regularly. For most, this is probably not a strong enough reason to pay property taxes and utilities on a large home. Financially, moving to a smaller home or condo in a location without all the amenities a young family might need (like excellent schools) could also free-up extra cash to bolster your retirement savings. However, it is generally prudent not to expect a very big windfall from relocating. Often, the proceeds from selling a property are used toward upgrades in finishes and fixtures. The real savings come from the elimination of the day-to-day upkeep of a larger home such as landscaping and repairs.

Timing
Making a move early in retirement is often preferable. The longer you put off a big inconvenient event like moving, the less likely it is to happen. When a spouse dies unexpectedly, it becomes even less likely to happen and even more of an inconvenience on family members. If downsizing or relocation is part of your retirement plan, get it done while you are fit and able; do not waste valuable time you should be using to enjoy this phase of your life.

Where To Go?
Warm weather and retiree-friendly tax policies in states like Florida and Arizona are always popular among retirees looking to relocate. California, though beautiful and warm, is generally considered unfavorable because of high tax rates. Though taxes and weather may be at the top of your list of considerations when relocating, do not overlook the cost of living, crime rates, and access to quality health care. When taking all of these factors into consideration, some surprising states like South Dakota, Tennessee, and Louisiana rank near the top.

Wherever you would prefer to spend your retirement years, a Financial Advisor can help guide you through this ‘next phase’ in your life.