Published Tuesday, October 23, 2012 at: 7:00 AM EDT
Do you know where you will live after you retire? You might decide to stay in your current home, move to a smaller place, or relocate to be closer to your children. You could opt for a warmer climate—or for someplace colder. You may settle in another state, or even another country. There are so many possibilities it can seem confusing to sort through them all.
Your first consideration, of course, is what will be best for you. What you can afford, whether you’re in good health, what your spouse wants—all of those have to be factored into your decision. If your mortgage is paid off, staying put could be the most economical option. Of course, downsizing could put spending money in your pocket or pad your retirement account. Maybe you need to provide financial help to your children, grandchildren, or even your parents. Other considerations include state income taxes and proximity to family members.
Whatever your situation, retirement is a momentous occasion, and the more you think about how you want it to play out—and the earlier you start planning—the more likely you’ll have a satisfying life after work.
Not many years ago, retirement didn’t last very long, and most people just lived out their days quietly. But times have changed. According to the U.S. Centers for Disease Control and Prevention, the average 65-year-old in 2009 could expect to live another 19 years—and that’s more than one and a half years longer than in 2000. Active retirements have become the rule, not the exception, and many people continue to work at least part time.
Spurred by these trends, retirement communities have sprung up all across the country, even in cold-weather states. You can find retirement communities in the mountains, on the prairie, on lakes—just about anywhere, from sea to shining sea. They may be built for a few dozen residents, or many thousand. At The Villages near Ocala, Florida, more than 51,000 retirees live and scoot around in golf carts.
A retirement community can consist of just one kind of housing—condominiums or single-family homes, for instance—or you may be able to choose from among many different options. And these days, such places frequently call themselves active adult communities, dropping the word retirement to emphasize the physically active nature of today’s senior lifestyles.
And life at a retirement community—by any name—can be very active indeed, with recreational choices that may include golf courses, tennis courts, bocce courts, Olympic-size swimming pools, spas, and boats and canoes. There could be walking trails, bike trails, community newspapers, stage shows (with seniors doing the acting), seminars on health and other topics, billiard tables, ceramics classes, photography clubs, computer clubs, and state clubs. You may get a place to store your boat or your recreational vehicle, and just about every retirement community has a clubhouse, complete with card rooms, craft rooms, bingo halls, dance halls, libraries, TV rooms, and, of course, an office staff ready to assist you. And because most communities have a minimum age requirement of 55 or so, you’ll be living with people mostly from your own generation—and you won’t be disturbed by a lot of noisy children running around. (You can visit your grandchildren for that!)
State clubs are amazingly popular in retirement communities. It seems that many people prefer mixing socially with others from their home states rather than with people from other parts of the country. Another surprising thing about state clubs is that those with the most members often don’t represent the most populous Northern states. In Florida, the retirement-haven state, Michigan seems to lead all other states in retirement club membership.
All retirement communities have homeowner associations—and homeowner association fees that can range in cost from low to moderate to very expensive, depending on the types and numbers of amenities and services offered. Before choosing a place, be sure to consider not just the initial cost of buying a house or a condo but also all of the fees and other recurring expenses. You might rent a place first to try it out.
Yet while you may be reluctant to pay a hefty monthly homeowner association fee, it’s likely to cover a host of convenient services ranging from basic cable TV and garbage collection to lawn maintenance, pest control, exterior painting and other maintenance, and roof repair. And if you’ve ever cut grass on a hot, muggy, Florida summer day, you might agree that lawn maintenance alone makes retirement community living worth the price!
This article was written by a professional financial journalist for Advisor Products and is not intended as legal or investment advice.