Should You Relocate or Stay Put in Retirement? Financial Pros and Cons
You may be living in your most valuable asset — your family home — and contemplating whether or not to use it to help fund your retirement. In addition to emotional considerations, the financial aspects of the decision to relocate or stay put can be significant. This article explores the financial pros and cons to help you decide which “move” is best for you: relocate or stay put in retirement.
The Case for Staying Put
Moving is an expensive undertaking — both in time and money. You will spend a considerable amount of both of these precious resources looking for a new home, preparing your existing home to list (which may include renovations), hiring movers, actually moving, paying closing costs, land transfer taxes and agents’ commissions, and renovating your new home if necessary or desired. If you stay put, these costs can all be allocated to your retirement spending.
If you can afford to stay where you are in your retirement years, the advantages of staying put may lie mainly in emotional considerations. Staying put can be a wonderful option for your emotional wellbeing, especially if you will be staying close to friends and family, which will help ward off the loneliness and isolation that often comes with retirement. Additionally, you get to keep what is familiar and comfortable in a home filled with memories you do not wish to leave behind.
On the other hand, the disadvantages of staying put can also be financially significant. Think of the property taxes, maintenance costs, and utility costs of a larger and/or older home. Chores such as house cleaning, gardening and snow shoveling may become difficult and require paid help. As well, renovations to your home may be necessary to make it livable and comfortable for you in your retirement years. All of these costs may be significantly higher for an older home than a smaller, newer home.
The Case for Relocating
Your home is an asset with value, perhaps a substantial portion of your net worth, and has likely appreciated in value since you bought it. Selling your home frees up this value, most effectively if done at the right time relative to the housing market in your area. This will give you more money to spend in your retirement years or to invest for growth and retirement income, perhaps through an income-generating investment portfolio.
Moving also gives you the opportunity to choose a home better suited to your needs during your retirement years, both in terms of the amenities offered by the property and by its proximity to medical services, social venues, family and friends.
The disadvantages of moving, as previously stated, are that it can be time-consuming and expensive — and can include fees, commissions and taxes that will eat into the proceeds of sale.
The Bottom Line
Ultimately, the decision to relocate or stay put will be a combination of both financial and emotional considerations — what is best for your emotional well-being and what is best for you to protect, preserve and build wealth in the long-term.
Preserve and Build Wealth with Bloom
Whether it is your desire to have a stable, independent stream of income for retirement or to fund philanthropic ambitions, and more, Bloom Investment Counsel, Inc. can help.
Founded in 1985, Bloom Investment Counsel, Inc. has experience in managing in excess of $2.5B in assets over the years. Our clients include wealthy individuals, family offices, foundations, corporations, institutions and trusts who have entrusted us with their wealth to not only protect and preserve their net worth, but also provide income that can be used for retirement, philanthropic ambitions, and more, without the need to withdraw from capital. Learn more about our investment approach or let’s talk about how we can help meet your unique investment needs and objectives.
Bloom Investment Counsel, Inc. is a well-established Toronto-based independent, privately-owned boutique investment management firm providing customized, actively managed, Canadian and U.S. dividend-paying portfolios for wealthy individuals, family offices, foundations, corporations, institutions and trusts.
Founded in 1985, Bloom has experience in managing in excess of $2.5B in assets over the years. We believe that generating independent cash flow is central to the success of our clients’ portfolios because it provides capital for the present day, if needed, while continuing to preserve and build wealth for the future.
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This content is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this content should consult with his or her financial partner or advisor.