With the number of stories you read about people retiring in Ecuador or France – and the list of best cities to retire – you might think that moving to retirement is the most popular thing to do. In fact, while it seems to be something that many of us fantasize about, almost no one goes through with it.
Only 5% of seniors migrated in 2014, according to U.S. Census data. Among seniors who moved in 2014, the Brookings Institution found that less than 1% switched states, with Florida, Arizona, South Carolina, Texas and North Carolina being the most popular.
A 2015 Bankrate survey found that 60% of Americans said they wanted to retire elsewhere, but the survey included respondents of all ages. The group most likely to say they wanted to move in retirement was the 18- to 29-year-old cohort. Only 20% of 65-year-olds have expressed a desire to exercise.
So let's get real: You probably won't be moving to another state or city, let alone a country, when you retire. But there are good reasons to be happy with staying put.
If you've lived in the same place for a long time, you have social networks that would be difficult to leave and could take years to rebuild after a big move. Whether it's your book club, hiking meeting, Bible study or game night, those familiar faces you've come to know and share interests with aren't something you can pack up and take with you.
Aside from friendships, there's the checker you know at the grocery store, the neighbor you talk to when you get your mail, and the receptionist who worked at your dentist for so long you watch her kids grow up. Even small interactions with people we are not close to but recognize as friendly faces can make a big difference in people's well-being. It also prevents them from feeling isolated, a common problem among retirees.
Healthcare becomes more important as you age, which means having a relationship, ideally a long-term one , with a trusted healthcare provider becomes increasingly important. The idea of starting from scratch, finding new doctors and getting to know them can be really unappealing, especially for those with serious or chronic conditions who are happy with their current providers.
Having doctors you trust also means that If you need a referral, you can get one from a reputable source and don't have to blindly choose from a list of Medicare providers. Unless the quality of health care where you live is subpar. Stay in the right place to get the best care as you get older.
Moving to a place With a lower cost of living, such as a state where housing costs are lower or income taxes are non-existent, appeals to many seniors who don't have the nest eggs they need to live comfortably and meet all their retirement needs. But taking a big step may not be the best way to generate that financial security. Staying in the same house or downsizing in the same general area might be a better alternative.
Living in the same house, especially if your mortgage is paid off, could be great financial security. Without a monthly payment, you only have to worry about property taxes, homeowners insurance and maintenance. If you've lived there long enough to pay the mortgage, you probably have a good sense of your home's current and future maintenance costs and how stable your property taxes are, which means you can plan accordingly.
However, these homeownership costs may still be too much for some retirees to bear. In this case, there are two options: Downsizing or securing a reverse mortgage. Downsizing will involve moving costs and possibly other financial changes, such as different property tax rates or homeowners association fees, which you need to weigh carefully to make sure they don't outweigh the cost savings of moving. (Learn more in Avoiding the downsides of downsizing in retirement.)
A reverse mortgage also comes with significant fees and is not the best way to get the maximum value from your property. Still, these loans allow you to age in place and provide extra cash if you're not interested in leaving your home to your heirs.
The Bottom Line
For If you plan a realistic retirement, assume that you will end up exactly where you are now or not. Although it might not give you the same bragging rights as if you were taking a big step towards retirement, it's not really about being comfortable and enjoying yourself? For most of us, this seems to be the case, and we get these things most easily when we stay close to home. (For more information, see Retirement: USA vs. Abroad.)