Where to retire is a fascinating topic. I love to read the stories of places people retire to and the different ways they do it. There are all those top ten places to retire headlines in newspapers and magazines.
It is sad that we spend most of our adult lives living somewhere we really do not like in the hopes of living somewhere better when we retire. Why do we think about great places to retire and not great places to live now?
It really makes no sense to spend all our working lives where we don’t want to be.
I have rarely felt at home wherever I have lived. There may have been brief periods where I liked living where I was at and I do try to make the best of wherever I am.
It’s just this never-ending feeling that I do not belong where I am and I want something different, something better.
That is one reason I do not like owning a house and being tied to that house. I prefer to rent so leaving is not so difficult and so financially crippling.
Plus, I have owned 3 houses and along with hating the massive cost of ownership, and the never-ending work, I lost my _ss on all three. A much less expensive way to own a house is to have a mobile home retirement.
So, when you are thinking about the top places to retire it would be better to plan to rent in the place you are going. Then if it doesn’t work out, you can easily move. You can change where to retire multiple times if you don’t own a home.
If you have a home to sell and you think you will make money, it would be better to pay your taxes on the gain and put the rest of the money in the bank. That is what I would do. But I know this is not what you are told to or kind of forced to do. You are forced to buy a different house with the gains you made on the first house so you do not have to pay taxes on the gains. The traditional where-to-retire planning forces you to buy another house.
But if you follow along doing that, you may end up living somewhere just as unsatisfying as where you have been living this whole time.
Money in the bank is better than equity in a home. Even if the equity number is much larger than the bank number. It is easier to find where to retire when you have cash in the bank and are not tied up in a house. The mortgage on that home traps you.
For those of you like me who no longer own a home, we are free from that problem. There is no way to think we are not freer. I have a one-year lease, but I could break it if I wanted. I could just leave. My only loss would be the security deposit and a ding on my credit.
When you walk away from your mortgage, you lose all the money you put into the house, the down payment, and all your upgrades.
When thinking about where to retire there is no need to think you have to buy a house. You can think about this a whole new way.
You can rent or live in a vehicle or an RV or some combination of that. You can live in hotels or trailers or tents or wherever.
You can always live cheaper when you do not own a house. When you own, there is almost no way to go cheaper. The only solution to making a house more affordable is to make more money. There are so many different ways to live and places to retire, that just buying a house does not make that much sense if you want to spend less and live more.
I have been studying this for years and the only people who seem happy with their house or houses are the people whose payments toward that house are a very minor portion of their normal income. That is why rich people tend to be more relaxed about their house. The money they put toward their house is only a very small portion of their income.
You can get the same effect as long as your payment toward that house is very small compared to your income.
Most people have this all mixed up. They pay 20 to 30% or more of their income toward housing. This is way too much. There is no way to have a good life, free to buy what you want and do what you want paying that much every month.
Your housing cost should be more like 10% of your income or so. You will say that this doesn’t give you much house. Yes, that is the point. You have less house and more life.
Let’s do the math.
Say you make $60,000 per year. That means you make $5,000 per month. The most you would then pay for housing would be 10% times $5,000 or $500 per month. As I said, you will not get much in the way of a big, traditional house with $500 per month. But you will have a lot more of your money for other, more rewarding expenditures.
This simple math will really help your where-to-retire ideas.
Maybe you need to adjust the 10% up somewhat. I have. It is not carved in stone. But this simple math really tells the story of why we get in over our heads. We are spending way too much on housing. You will not be free to decide where to retire if you insist on paying way too much for your housing.
Housing is your biggest cost. Even more than taxes. If you can find a way to reduce your housing costs, you don’t have to worry so much about other things. Those other things are minor. You can always stop buying something. It is much easier to stop going out to eat, stop driving so much, and find other ways to cut costs. The banks are not interested in you asking them to pay a lot less. Once you own a house, you cannot stop paying for it, unless you let the bank have it back. The best place to retire is not a big, expensive house.
I know we are punished on taxes for not owning a house. But we gain in freedom by not owning a home.
The world is so huge and there are so many places to see and so many places to live. It is mind-boggling to think that any one or even 10 places would be the best place where to retire.
There do seem to be some common themes that a lot of people agree makes sense to look for.
Where to Retire – Big Things to Look For:
A Climate that You Love.
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I live in Wisconsin. I hate the climate. I cannot recommend you live here all year. The winters are brutal. The summers are short. It is nearly impossible to plan any type of summer outdoor event because of the mosquitoes, humidity, and the chance of rain. Wisconsin is not where to retire unless you have some compelling reason to be here such as you want to be near family. It is a bad-weather retirement location.
I can see why older people move to southern states for an easier climate to deal with. Sometimes I think these northern states should just be abandoned. The cost of running them is just enormous. You cannot turn off the heat like you can turn off the air conditioner. You will die. The roads get wrecked every winter from the freeze-thaw cycle.
Other countries seem to have much better climates too. Mexico is great. Southern Europe has a mild climate. Many Asian countries have that all-year summer that is so easy to live in.
Good Health Care.
This would include the cost, the availability of doctors, and even more importantly, can you get there. If you live in a very rural area there are few doctors. If you live in a location that is remote, it may be hard to get there also.
My parents live in a rural area about 12 miles from the nearest hospital. They only just started needing to go this past few months. Going to the emergency room in the middle of the night a few times. They made it fine and got the help they needed.
The problem with where they are now is that they live near a river with a history of flooding. About 4 years ago the entire area flooded and they could not get to the city without driving through water. We laughed about it then but can you imagine the terror involved in trying to drive to the hospital in the middle of the night through a flooded road with a person who needs urgent medical care? You are going to die in that situation.
It is critical that you know where you need to go, the roads and alternate ways to get there, and even alternate hospitals.
I just was talking about this with my dad. He is 73 and is now having a bad heart and lots of doctoring and medications. He was not that interested in what I was talking about. I was talking about him learning and knowing where to go and going over that with my mom. This kind of information is critical to your survival but only if you will think about it.
Low Taxes.
Some states and countries have hardly any taxes at all. Some are highly taxed. Taxes are aggravating, but along with thinking about the taxes you need to figure in other things. California is very highly taxed, yet it is the most populated state. There must be other factors that cause people to live there in spite of the taxes. The weather is ideal and the scenery is fantastic. It is a cool place to be. I loved my visits to California. But it might only be a place to visit if you did not spend your life working there.
Crime rate.
The older you get, the more afraid you will become. It seems to go with getting older. So living somewhere with a minimal crime is essential. Besides, if you live in an area where you are afraid of crime, move. Most of the world does not tolerate crime. It is only the large cities, with massive problems where crime is rampant. This gets back to the idea of renting instead of buying. You can just easily move away from crime. Factor in the crime rate when you are deciding where to retire.
Interesting lifestyle.
This would encompass as many of the things you want to do as possible. It may be scenery. It may be the climate. It may be wide streets that are easy to drive a golf cart on or narrow streets filled with shops. It may be all the activities you never had time to do. It may be close to an airport or a freeway. It may be all kinds of things.I think since all these things are so variable, it would be foolish to buy just one retirement home when you could spend some time trying other areas out.
Where to Retire – A Different Model
Perhaps a better model of where to retire is to have a home base that is either a very inexpensive home you own or rent where you call your home. This would be the place you come back to from your travels. Some place that you call home and you keep your stuff. This could be a rented place in the area you lived most of your life where your family and friends are and that you know well. This home would need to be easily affordable and need minimal upkeep.
From there you could travel either by plane or vehicle or camper living in different areas long enough to get a good feeling that you know the area. That is what I am leaning toward. That is my ideal where-to-retire model.
I follow a blogger who lives full-time in his van and trailer. He writes extensively about his travels and lifestyle here – Cheap RV Living.
Right now I rent a nice, 3 bedroom place in the Village where my daughter wants to attend high school. She is just starting so my plan is to spend 4 years here. My son is out of high school but I want a bedroom for him too so he has a home base with me until he is established.
So far my son comes and goes, spending about 30 to 40 % of his nights with me.
So I may use this place or someplace similar to my home base. I may want to move to a less expensive place at that time.
I also can envision my future home base in retirement near my parents. There is inexpensive living near them and the area they relocated to in their retirement is quite nice. But in addition to that, I want to travel widely. I want to spend my winters in a warm climate. I want to see a lot more of the world. So my plan is to have a modest, easily affordable place near my parents to call my home base and then travel from there.
Wisconsin is great in the fall. Parts of the summer are great. About half the year the climate is great. Many people in Wisconsin have an inexpensive place here and live in a warm climate in the winter. It can be the best of both worlds.
I see no reason this where-to-retire model would not work for most people as long as you control your costs. You keep a modest place where you are fairly comfortable living. You keep this place so you always have someplace to go and your children can be if they fall on hard times. Then you move about the world in a relaxed, leisurely pace, soaking it up and enjoying it.