A Smooth Move into Retirement
People ages 55 to 65 are often just beginning to consider where they might spend their later years. Should they stick close to home or try out an entirely different spot?
Relocating for retirement is no longer as simple as buying an air-conditioned condominium in Florida or Arizona. The number of choices for older adults has multiplied, and, as baby boomers approach retirement, they're demanding even more options while they determine where they will settle in their golden years. What should migratory retirees look for when they relocate? What trends should they be aware of?
BusinessWeek reporter Ben Steverman recently spoke with David Savageau, the author of Retirement Places Rated: What You Need to Know to Plan the Retirement You Deserve. The seventh edition of the book, which came out in September, judges 200 retirement areas in 40 states on criteria including climate, the economy, available services, ambience, cost of living, housing, and personal safety. Edited excerpts from their conversation follow.
Are there things people tend to forget about when searching for a place to retire?
One of them is health care. When they first retire, people are generally in very good health and are not giving a lot of thought to becoming ill. So they might settle in a place on the Outer Banks of North Carolina [with limited health-care facilities nearby]. Also, many people retire to resort towns. However, they don't really think about the off-season, when the resort can be like a boarded-up factory town. They should beware of seasonal resorts.
The job market is important, too. For example, some retirement destinations are also military towns where, if you're looking for an interesting job, the wages are pretty low. They get plenty of applications for jobs from military wives.
Are there criteria people tend to overemphasize?
A lot of retirees are obsessive about taxes. People head for Texas, Nevada, Florida, and Washington State, which have no personal income tax. But you have to be realistic about taxes: Once you turn 65, there is a lot of favorable treatment of retirement income in a lot of states. So you might broaden your search.
Would you advise people to try out a retirement place before buying?
That's good advice. People who make successful moves are often people who have had prior experience in their destination. They call that "rehearsing"—on vacations, maybe by acquiring a second home or splitting a time-share.
How do you avoid making a big mistake when choosing a place to retire?
People making mistakes is not uncommon. They live there for a couple years and then come back to their hometown. The mistakes often have to do with not knowing enough about their destination. Don't play Columbus. Don't go to a place no one has ever discovered previously as a retirement destination. You want to be in a place that has been settled by previous retirees.
What about culture clash? How important is it to fit in?
You don't want to be a fish out of water. It's very important. You have people from the blue states coming down and not being terribly happy in a red state. Unless they're in a college town, which tends to be habitable by people from the big cities.
You present a lot of data in your book, but is there any one thing that people can maybe ignore or de-emphasize?
Crime is not as important as it was a generation ago. People used to try to move from a dangerous area to a safe area. But crime rates have gone down and people realize that if there's a victim of crime it's not the elderly anymore, it's younger people. A prudent selection of neighborhood would take care of [worries about crime] as much as anything.
Are you seeing new trends in what people are looking for in a retirement spot?
The pattern of migration in retirement used to be exclusively southern, to resorts in the Sun Belt. Now it's all over the map.
There's more focus on ambience, on finding "authentic places." It's not just sand, palm trees, and early bird specials. It's more things like taking a college course, working as tour guide of a house museum, maybe rehabbing a Victorian house, or taking part of the year off and exploring other parts of the world. And golf is something that used to be a big part of retirement. That's less so now. It's not your father or mother's retirement.