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Baby Boomers on the Move: What to Consider If You Are Planning to Relocate

You've worked incredibly hard and are finally getting close to retirement. Like many other baby boomers, with your kids out of the house and a surplus of empty space and time, you may have thought about moving. If you are considering relocation, you'll want to read this list of tips.

Is downsizing right for you?
Downsizing may seem like a pretty clear-cut decision, but before taking action consider:

  • Can you take care of your current home? Even if the answer is no, moving is not the only solution. Others include renovations to make your house more accessible, hiring help to do housework, or having a family member move in with you.
  • Can you get income out of your current home? If the only reason you are selling your home is to generate income for retirement, you may want to consider:
    • A home equity loan or line of credit
    • A reverse mortgage
    • Renting an unused room

  • Please note: Because reverse mortgages can be costly, they should be used as a last resort, and proceeds from reverse mortgages should never be used for investing in securities.
Money matters—searching for a lower cost of living
In the past, retirees often relocated to enjoy a warmer climate; recently, however, the cost of living and health care expenses have become their most common reasons for moving. To help with your financial situation, consider:
  • Paying off debt. Trading in your current house for a more affordable one may put extra cash in your pocket. Use the cash to pay down debt or build up savings.
  • Tax-free gains. Married couples can exclude up to $500,000 in capital gains from the sale of their primary home ($250,000 for single sellers). In order to do so, you must have owned and used the home for at least two out of the last five years and may not have excluded a gain from the sale of another home within the past two years.
  • Cost of living. Research income, sales, property, estate, and inheritance taxes. Don't be fooled by a low number in one category—typically, another tax will be higher to compensate. Property taxes are usually the most costly, so pay special attention to them. Please note: Tax credits and homestead exemptions may be available. Talk to your tax advisor before making any decisions.
  • Health care costs. Obtain prices and terms for medical facilities and insurers by checking www.healthcare.gov and www.medicare.gov.
  • Less space means less stuff means lower expenses. When moving to a smaller home, you can't take all of your belongings. You may be able to earn cash selling items you leave behind. A smaller home also cuts future spending—you'll have less space to fill.
  • Time is money. Moving to a smaller residence means less time spent cleaning!
  • Utilities. A smaller house means less money spent on heating, cooling, and electricity.
Looking to stay active and involved
College towns are a popular choice for retirees. If you are hoping to stay active, consider:
  • Recreation. Does the community offer arts, cultural, and outdoor activities?
  • Proximity to services. Is it easy to get to the nearest major city, airport, or hospital? Is public transportation adequate?
  • Job opportunities. If you plan to work during retirement, see this list of job websites: www.retirementliving.com/jobs-for-seniors.
  • A condominium. This option offers a community of other retirees, organized activities, and home maintenance. But beware of monthly fees that cover maintenance.
Moving is never simple, but it can help you simplify your life. Talk to your financial advisor about any questions you have, so you can better prepare for this exciting transition.


© 2012 Commonwealth Financial Network