As a financial professional, helping your clients with retirement planning is about more than just helping them with financial stability and making sound investments. It can also involve guiding them with other decisions that impact their financial well-being — like finding the perfect place to call home after they retire.
Choosing the right location can significantly impact your clients' quality of life, overall happiness and ability to create lasting memories during this new phase of living. As you guide your clients through this decision-making process, your role is crucial in helping them think ahead and carefully evaluate potential retirement destinations.
What clients should consider when choosing where to retire
From housing costs and climate to proximity to healthcare facilities, there are multiple criteria for your clients to consider before choosing where to retire. Here are seven factors your clients should keep in mind when determining their ideal retirement destination.
1. Retiring locally versus relocating
One of the first decisions retirees need to make is whether to stay in their current location or move elsewhere. Discuss with them the pros and cons of both options, including the financial implications of each decision. A crucial consideration for many people is being close to loved ones: Make sure they take into account how far they'll be from family and friends, whether they're comfortable forming a new community, and how familiar they are with the new area.
2. Cost of living
The cost of living varies significantly across states and cities, making it essential to analyze how your clients' retirement income aligns with each location. Housing prices, property taxes, and overall living expenses should be factored into their budget to determine the feasibility of relocation.
3. Tax considerations
Taxes can substantially impact retirees' finances, making it essential to explore the tax policies of potential retirement destinations. States with no income tax or that offer tax breaks for retirees may be more appealing to some clients.
4. Climate and activities
As retirement provides the perfect opportunity to pursue activities and hobbies that were put on hold during a busy career, clients should consider whether the climate and recreational opportunities available in their chosen locations are a good fit with their preferences and lifestyle. Some may prefer temperate climates, year-round warmth, or seasonal changes that align with their desired lifestyle and favorite recreational pursuits.
5. Safety and security
Safety is often a top priority for retirees. Evaluating crime rates and overall safety measures in prospective locations can ensure the activities they love are accessible and provide peace of mind during retirement.
6. Transportation and walkability
Retirees may seek a location that provides ease of mobility and access to public transportation or walkable neighborhoods. This promotes an active and independent lifestyle as well as accessibility to social opportunities, cultural activities and local attractions such as museums, theaters, parks, and other recreational facilities. Having these options can significantly enhance the retirement experience.
7. Proximity to health facilities and services
As individuals age, access to quality healthcare becomes more critical. It's important to determine the availability of medical and senior care facilities nearby and the number of physicians per capita in your clients' desired retirement location.
Five places clients may consider for retirement
Consider suggesting these potential locations that are known for being tax-friendly while also catering to retirees' diverse needs and preferences.
Alabama
A popular choice for retirees, Alabama offers diverse recreational opportunities, including pristine beaches and charming small towns. It's also one of the most tax-friendly states — Social Security benefits and pension funds aren't subject to state taxes, and neither are estates, inheritances or property taxes for disabled homeowners or homeowners over 65 (county property taxes may still need to be paid).
Arizona
A dry climate, plenty of sunshine and mild winters combined with breathtaking scenery make Arizona a generally appealing choice for retirees seeking an active lifestyle. The state's tax-friendly policies for retirees and an abundance of senior-friendly services add further allure for snowbirds.
Arkansas
Both the cost of living and the price tag for a home are well below the national average in Arkansas. A wealth of senior-friendly amenities such as hot springs and golf courses beckon, while Social Security benefits are left untaxed, making life in this state exceptionally easy on the pocketbook.
Pennsylvania
Pennsylvania ranks high among U.S. states for quality healthcare options and physicians per capita. In addition to offering an affordable cost of living and leaving retirement income untaxed, Pennsylvania is known for an abundance of recreational activities, numerous state and national parks and interesting historical landmarks.
Panama
If your clients want to live abroad, Panama could be an attractive retirement destination. In addition to its tropical climate, stunning landscapes and affordable cost of living, it offers tax incentives and a friendly expat community.
By guiding your clients through a comprehensive analysis of the factors above, you can empower retirees to make informed decisions about their future living arrangements. Remember, a solid retirement plan takes into account not only financial stability but also the pursuit of happiness and fulfillment in this new chapter of life.
Learn more about how retirement is changing for your clients and how you can help.
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