When you have your retirement figured out, you can choose where to live without worrying about money. The whole world suddenly becomes a potential place to retire to. But when you have little savings, this can be a nightmare.
And unfortunately, most seniors fall into this category. According to a recent study by the Center for Social and Demographic Research on Aging in collaboration with the University of Massachusetts Boston, many American seniors don't have enough funds to get by.
If your parent is amongst them, they could be worried about where to live in retirement. And while it's natural to want to help, how can you do it when you're struggling financially?
In this blog post, we highlight six tips to do that.
Help Them Estimate Their Retirement Expenses
Even if your parents know they don't have enough savings to retire, it's still wise to estimate how much they will need. And that alone can be an overwhelming task for many seniors.
Finding out how much they need for retirement will help them plan and budget accordingly. To help you get started, follow these four steps:
- Approximate their annual expenses
- Figure out guaranteed sources of income like Social Security
- Calculate the difference between guaranteed income and their expenses to determine how much money they need.
Discuss Relocation When They Retire
Many people prefer to relocate when they retire. Maybe they were tied down to a specific town by their jobs, or they were simply staying for the kids.
And when kids leave the nest and retirement comes, they may want to relocate. Find out if this is what your parents want. You can suggest it if it doesn't come up.
Relocating might help them find an affordable town to retire in. If they buy this idea, then help them find the best place to relocate to. And here is how:
Look At Suitable Modes Of Transportation
Transportation can be a huge expense for seniors when they want to retire. To help them reduce this cost, find an area where they can walk to most places. This can help them save thousands of dollars annually in gas and car maintenance.
Apart from preventing them from spending their little savings on cars, picking a walkable town is also a great idea since seniors may lose their ability to drive as they age.
But if walkability is not achievable, look for public transportation. It may be cheaper than owning a car.
Don't Forget The Quality Of Life
What do your parents love to do? How are they planning to spend their time in retirement?
These are questions that must be answered when helping them find an affordable place to stay. If they enjoy an urban lifestyle, you may want to help them find places where they can easily walk to shopping stores and community events.
And if they are looking for a quiet and peaceful environment, a rural area or a small town may be better for them. However, make sure they have access to other seniors, so they can build a new circle of friends.
Consider The Tax Environment
States with high taxes tend to take funds from retirees. As such, it pays to look at the tax obligations of every state before recommending it to your parents.
And while at it, watch out for states that may appear to be tax-friendly than others. You'll want to get the full picture.
For example, some states with high-income taxes may not tax Social Security. That means your parents will get the full amount.
Recommend A Trial Run
After you settle on one location, advise your parents to spend several weeks there before relocating fully. Let them explore the community, interact with locals, and get more insights to understand the area.
The last thing you want is for your parents to spend a lot of money settling in only to realize it isn't right for them. So take your time.
As you can see, choosing where to retire has a huge impact on your parents' quality of life and finances. If you suspect they're having trouble deciding, use these tips to help them out. Do you have more tips, ideas, or recommendations? Please share them with us.