In my ongoing quest to figure out where I’ll eventually live in retirement, I recently came up with another brilliant idea: Philly.
The city has tons going for it—terrific restaurants and museums, top colleges (including the University of Pennsylvania), good hospitals, and, for retirees, low taxes (for more on Philadelphia and other great places to retire. Plus, housing is cheaper than in the Washington, D.C., area, where I currently live.
But the main reason I’d rather be in Philadelphia? One of my daughters lives there (I hear the sound of her gulping across the miles), and my other two children live in Brooklyn, a quick train ride away. Being closer to my kids, not to mention the tiny package of perfection that is my granddaughter, would be a luxury. It could also be a necessity as I grow older.
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The majority of retirees don’t have to move to get more face time with adult children: More than 50% of older households live within 10 miles of at least one child, according to the Health and Retirement Study, sponsored by the National Institute on Aging. But for those who live farther away, the arguments for and against moving closer to them can be equally persuasive.
Pros and cons. In the best-case scenario, you get to enjoy time with your adult child, forge bonds with the grandchildren and help the family out by occasionally babysitting. Down the road, your adult child returns the favor by caring for you as you age. Your new home, in this ideal version, offers not only proximity to loved ones but also a climate you like, lots of cultural amenities, a lower cost of living and myriad opportunities for making friends.
The worst-case scenario? You miss the friendships and networks you’ve established over the years, hate the weather, and discover that the cost of living in the new place is eating away at your nest egg. The grandkids are too busy to spend time with you, or you’re expected to be a full-time babysitter. You and your adult child remember that you never really got along.And even if none of that happens, your child and her family could decamp to another area. “I’ve seen parents move to be closer to young grandchildren only to have their adult children relocate for work. Then the parents are in an unknown city with no family,” says Cheryl Sherrard, a certified financial planner (CFP) in Charlotte, N.C. Sure, you could move to the new city along with them—but that entails more costs and more disruption.
To improve your odds of making the right choice, first identify your motivation for moving, says Lynn Dunston, a CFP in Denver. For instance, if getting help from your daughter with errands or with personal care—now or later—is a factor, find out whether she is willing and able to take on that role. “Put it all on the table,” says Dunston.
Maybe one of your goals is to downsize your expenses. Be sure to vet the cost of living in your new area, as well as the tax environment for retirees, see Kiplinger's State-by-State Guide to Taxes on Retirees. Even in a tax-friendly state, if the cost of living is higher than where you are now, you might end up drawing down more than you had planned from your pretax account while triggering more taxes, says Andrew Gipner, a CFP in Huntsville, Ala.
Once you’ve done the preliminary research, consider renting near your adult child for a few months. “That gives you the flavor of the place without taking the financial risk of buying a house only to find you don’t like the area,” says Chris Hardy, a CFP in Suwanee, Ga. And you’ll see how everyone reacts to all that togetherness.
Pulling up roots to be near the children and grandchildren is a huge decision. Don’t let a brilliant idea dazzle you into getting it wrong.
It is with a heavy heart that we report that the author of this story, Jane Bennett Clark, died in March 2017 of injuries suffered in a tragic accident. Jane was one of the finest reporters and writers ever to work for
Kiplinger’s Personal Finance magazine. This is one of two stories she wrote for the May 2017 issue that had just gone to press at the time of her very untimely death.
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