I really don’t like to write long-winded posts about anything, even if I sometimes do just that. But, sometimes there are subjects that do require that kind of detail. Like, for example, the subject of picking where to live. Maybe you never actually had to pick a place to live, but these days it has become a much more common thing to have to do, and that’s especially true in retirement.
I’m sure that there are plenty of good and obvious reasons why you live where you live. In retirement, many need to live in a less expensive place or a place closer to family. For others, it may be that they always wanted to live in a mountain area or a beach environment. Those are all good reasons to consider and get advice about.
But since you spend a lot more of your life living and working in places long before you retire (in most cases), today I’d like to talk about both situations: where you live while you are working and what you should consider about choosing where to live when you stop.
How Did You Decide to Live Where You Live – Right Now?
Chances are you gave the place where you live in right now only a little bit of thought. By that I mean, if you are born in an area and your family lived there (and has possibly for generations), then you probably do, too. Not much of a decision, is it? But making a decision to uproot yourself from your hometown and then packing up and moving away is a difficult decision for most people. That might be your decision to experience for the very first time when you decide to go away to college, but in many cases you still may return “home” afterwards and then stay put. You may decide to return home or maybe not.
I have thought about this for years and drawn on my own experiences to help form my unscientific list here for you. So, here’s what I have found to be…
The Key Factors to Consider When Choosing Where to Live
1. Employment Opportunities
This has to be priority number one, doesn’t it? No job and then what? It would help to actually have a job offer when you move, but it isn’t always the way it happens. Do you want to be an investment banker? You’ll need to live in a big city, like New York or Boston. Are you a teacher? Your options will expand considerably since education is sought after in just about any city or town.
Research the job market and start by analyzing quality employment opportunities within your own industry (or area you want to pursue) to determine where the highest concentration of jobs is located. Income levels for jobs can vary greatly from state to state. Salary.com lets you compare pay rates for various careers all across the country.
No matter what, when you first start out or when you actually retire, living comfortably within your means should be your first concern. Affordability includes more than just housing expenses. It also means the prices you pay for consumable goods like groceries which can really vary from town to town. There is also the price of gasoline, utility services including electric and water, and taxes, which are also different, too. Typically, if you were to move from a place like the New York City metro area to a place like North Carolina, your expenses would drop like a rock overnight. Rental costs would be cut nearly in half and you’d spend way less money on groceries, gas, and utility bills (of course in many cases you will see a drop in income if you were to leave a big metro environment).
3. Sales and State Income Taxes
We all have our opinions about taxes and they definitely hurt. Sales taxes are regressive and apply no matter what you earn, especially when you are living on a fixed income like a retiree. You may think that every state treats taxes the same way, but think again. There are actually five states that have no sales taxes and seven that have no state income taxes too* (particularly appealing to retirees).
*Alaska, Delaware, Montana, New Hampshire, and Oregon don’t collect sales tax for retail sales and some services. In addition, Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming don’t collect individual income taxes. Tennessee has no income tax on salaries and wages but there is a flat statewide rate for all income from interest and dividends. New Hampshire has no income tax on wages and salaries, but there is a 5% tax on interest and dividends.
Citizens of New Jersey (where I live) pay the most taxes, while Alaska’s residents pay the least taxes. In addition, 40 states provide property tax credits or homestead exemptions that can provide homeowners with some additional tax relief. Consider local sales tax, income tax, and tax credits and exemptions when you’re looking for the perfect place to live.
4. Real Estate Values
If you are at the stage in life where owning your own place is a priority (buying a home is the single largest investment you will probably ever make), you need to seriously consider this factor. With real estate in a constant state of flux, it’s important to research current home prices, the length of time homes are for sale, the resale values of homes, and probable long-term value estimates.
Your home’s value can play a huge part in your total net worth and help you have a huge start on building your wealth and retirement assets. Websites like Zillow.com and Trulia.com can help you gain a grasp of the local real estate market.
5. Crime Rates and Statistics
No one wants to live in a high-crime area, but that doesn’t mean that everyone can live in a place where crime never happens. By researching the crime rates and statistics for various areas, you can learn more about the safety of a town or neighborhood.
Once you decide on a place where you want to live, stop by the local police station to discuss your new neighborhood. The police will be happy to help with advice about the area. You can also check out crime statistics about surrounding neighborhoods.
6. Proximity to Family and Friends
This is often a huge factor. Do you have a large extended family? Do you spend the holidays with your family and friends? These are important factors to consider when choosing where to live. If extended family and friends are important to you, choose a place either within driving distance or within a reasonable distance by plane. Otherwise, you’ll constantly feel torn, and likely spend all of your vacation time and energy shuttling back and forth to visit friends and family (this is a factor that plays big when you consider your retirement).
Do you like to ski? Maybe southern Arizona isn’t the place that you should call home. Not a fan of humidity? You may want to avoid settling in Florida any time soon. The climate plays a large role in our lives as it impacts our hobbies, behavior, and sometimes, our jobs. Living in the climate in which you are most comfortable contributes to your mental and physical health, so choose wisely!
8. Education System
A good education is essential in setting up children to better handle the rest of their lives, so the importance of good schools cannot be overstated. Unfortunately, only the more affluent areas tend to have better schools (primarily because of the support from a bigger tax base), so you may not be able to afford to live where the best schools are located. There are nonprofit websites like GreatSchools.org which are a great resource for parents looking for the ideal schools and locations for their children.
If you crave constant cultural stimulation, you definitely want to choose a place that has a lot of cultural offerings. These experiences can really enhance your life. Many people want to live near their favorite sports team, or a vibrant music scene, or the theater. If you have a favorite hobby or recreational activity, make sure that you can continue to pursue these interests in your new home. If you enjoy being around a specific religious or ethnic community with the same beliefs and interests, this may be a factor in where you choose to live.
10. Commute Time and Public Transportation
The explosive growth of the suburbs surrounding metropolitan areas have made commuting times in many areas unbearable. A recently released report from Sweden indicates that long-distance commuters actually have an increased risk of divorce. The length of time it takes to get to work can be a determining factor in the decision to move to a new locale.
If you have a family, commuting can also drastically reduce the amount of time you spend at home. With gas prices rising and commute times becoming longer, utilizing public transportation options like light rail, train, or bus can be an inexpensive, time-saving way for you and your family to get around and cut the cost of commuting to work. It can also help your kids get around when you’re not home to drive them. A good public transportation system is a major plus when choosing a place to live.
11. Food Options
If you’re a foodie, you may want to try to find a place to live near the ocean or near a metropolitan city center. Grocery store fare, while plentiful, doesn’t replace the quality of fresh food from the ocean or fresh produce from the farmers’ market. If eating locally and sustainably is important to you, consider whether you can pursue this lifestyle in your new home.
12. Healthcare Facilities
Healthcare facilities are important at any stage in life, but they are especially relevant if you have children or if you are nearing retirement age. Easy access to good healthcare can increase your quality of life exponentially, so be on the lookout for towns and cities with good hospitals and medical schools. Often, there will be a correlation between cities and the quality of the healthcare.
13. Proximity to an Airport
If you travel a lot, you may need to live within close proximity of an airport. If not, the travel time and traffic to and from it can be as long or longer than the flight you are planning to take!
The reality of choosing a new place to live encompasses an incredibly large series of factors. While the above factors should be considered when choosing the ideal place to live, there are many more factors which will all play a role in your decision-making process. Luckily, there are several websites available to provide additional assistance when conducting your research: City-Data.com and WalkScore.com are designed to help you determine how locations fit into your wants and needs when “location shopping”.
Where are you living now and how did you decide to settle there? What are the factors that are most important to you? Have you any regrets about where you live now? What about when you retire? What are you planning to do about this when you reach that point in your life?