Yearning for warmer winters? Think about what it'd mean to leave your nest – temporarily – and establish a new one.
A different breed than the common American Retiree, Snowbirds head south for months at a time, often in pairs, chasing an endless summer in places like California, Texas, Arizona and Florida or further afield in Mexico, the Caribbean islands and South America.
About 17% of American Retirees wait until they turn 65 to relocate to a different state or region. Many seek warmth and adventure, while still maintaining ties with all that’s familiar in their hometowns. These seasonal visitors, known as Snowbirds, come in droves, boosting populations in warmer states by 10% to 12% in January and February. Most start off as migratory, but almost a quarter eventually became permanent residents of their winter homes.
If you’re hoping to join these travelers on their southern journey, you’ll want to put a lot of thought into what it really means to leave your nest – temporarily – and establish a new one.
One study showed that by age 61, most people feel free enough to live wherever they want, without constraints from work, school or family responsibilities. It’s not surprising that many empty nesters take the opportunity to move to a new habitat, at least part time. But how do you narrow down the choices to find your dream locale?
We can start with the weather. Retirees report they’re happiest with the climates in the Mountain, South Atlantic and Pacific regions of the country. Not surprisingly, those not-yet-retired also want to move to those areas. Why not test a few places out before deciding? Take extended vacations to cities in regions that seem to match your preferred lifestyle. These trial visits can give you a true feel for the place.
Learn, too, about the tax rules in your prospective new home. Many of the states eyed by soon-to-be retirees offer no state income or estate taxes and favorable tax treatment on retirement income. Florida, Arizona, Nevada and Texas often top lists of tax-friendly places to retire, but each has its own rules and requirements for establishing residency or domiciles, in order to benefit.
Of course, as with all things tax-related, it can get complicated, particularly if you own property in multiple states. Visit taxfoundation.org, then talk to a knowledgeable accountant and estate attorney to get an idea of what you’re in for.
A Place to Perch
Once you find a location, it’s time to find a home. Start the search before you retire to give yourself enough time to ensure your chosen habitat is a good fit both personally and financially. There’s no need to rush into a commitment to a place that will sit empty for months at a time, so take your time and consider renting for one or two years before making a decision. You’ll be able to explore the area and closely examine for-sale opportunities, while relegating many of the maintenance responsibilities to someone else.
Consider, too, whether you want to upsize or downsize. There are benefits and drawbacks to both. If you do want to buy, try to do so a few years before you stop working. Getting a mortgage is much easier when you still have employment income coming in. Plus, you’ll need to decide if you really want to commit yourself to a mortgage at a time when you may not have steady income beyond your Social Security and required minimum distributions.
Feathering Your Nest
If Snowbirds have plumage, it comes from your choice of warm-weather clothing, accessories and home décor. But those aren’t the only costs.
There’s maintenance and homeowners or condo fees, utilities, travel costs, property taxes, insurance, out-of-network healthcare; you may even need to buy another car or rent one. And you’ll have to factor in travel expenses like gas and hotels on your route south, as well as flights to and from home.
Crunch the numbers with your accountant and financial advisor before you even think about flying south for the winter. If you need to, think about seasonal employment opportunities, too. Just be sure to maintain the appropriate requirements to work in your chosen state.
Before Taking Flight
At minimum, you’ll want to ask someone to watch your home, maintain the grounds and set appropriate temperature controls while you’re away. Here are a few other things to check off before heading south.
- Winterize your home (e.g., store outside equipment; remove food and trash)
- Consult your professional advisors to ensure your powers of attorney and estate planning documents, including your will, are valid in your new state
- Consider a home protection service
- Forward your mail
- Create a secure digital or physical file with important tax, health, estate planning and insurance documents
- Order necessary medicines
- Make arrangements for your snowdogs and snowcats (i.e., your pets)
- Turn off any unnecessary services (e.g., cable, subscriptions)
- Take a video of all belongings in case of damage or theft
- Ensure continuing healthcare coverage
- Set up automatic bill pay
- Register your vehicle in the other state
Birds of a Feather
Establishing a new life elsewhere doesn’t mean losing sight of your old one. With Skype, FaceTime and Facebook video, you can hear and see your loved ones anytime. Of course, you can always call or write to them, too. The same can be said of your professional advisors. They’re just a phone call away should you need to touch base on something.
While it’s important to keep in touch with your family and friends, it’s also crucial to make new connections wherever you may roam. To widen your circle in your new “home away from home,” take advantage of community events like cookouts, socials, dances and book clubs. Check out rec centers, libraries, places of worship and community associations. You’ll feel like a local soon enough.