Thinking About Moving Near the Grandkids? Ask Yourself These 3 Questions First
Moving near the grandkids sounds like a retirement dream, but it can quickly become complicated. Ask these three crucial questions before you pack your bags.
Setting down roots near the grandkids is a popular choice for many new retirees. After all, you finally have the free time, so why not spend it with family?
If you're among the 66% of baby boomers who plan to pass on generational wealth during their lifetime, living nearby guarantees you'll see your gifts make an impact firsthand.
Sounds like what retirement dreams are made of. But not so fast — it can quickly become far more complicated than expected if you aren't careful. After all, your grandchildren won't stay young forever. Plus, there are financial costs you may not have considered. And let's not forget the emotional side of stepping away from your established life for a completely new one.
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"It's one of the largest financial decisions that retirees never actually model into their plans," says Patrick Shope, a certified wealth strategist and founder of Shope + Associates. "They will spend months looking at their budgets, but they drop everything when asked to move near their grandbabies. That decision comes very quickly, but it affects their taxes, their health care, and their spending for the next thirty years."
Moving near the grandkids in retirement may be the perfect decision for you, or the flawed, complicated, not-so-ideal decision. Before deciding if you want to move for your grandkids, ask yourself these three key questions.
Don't retire near the grandkids until you answer these three questions
1. Why am I moving, and is everyone on the same page?
Unless your children are begging for your help, make sure you can answer this question first: Why do I want to move there?
"I want to spend time with my family," or "I want to help out," isn't sufficient. Your reasons need to be specific, and they can't only be about your family. Sure, they can be the draw, but if you hate everything else about the location, you'll end up miserable when you aren't with your loved ones. Find other attributes that make relocating feel like home. Maybe it's the weather, the proximity to cultural events and the arts, or nature. Whatever it is, there has to be something about the move that appeals to you beyond the grandkids.
After that, make sure your adult children are on the same page. You don't want to uproot your entire life to spend time with your grandkids, only to find that your adult children and grandkids are too busy to spend much time with you. Nor do you want to become a full-time, free nanny, with no time to pursue your retirement dreams.
"Retirees may think this is going to be a Norman Rockwell picture where everyone sits down for weekly dinners, but the children may be thinking 'I need childcare,'" says Joe Buhrmann, advisory financial planning consultant at eMoney Advisor. "Have an honest conversation about how often you will see each other, what role grandpa and grandma will play, and what support looks like on both sides."
2. Can I afford to maintain my lifestyle and to undo the move if things change?
Spending time with the grandkids is great, but it can also get expensive. How expensive? According to a recent AARP survey, grandparents spend $2,654 per year per grandchild. And that's just an average. If you are living near your grandkids, expect that bill to increase.
That's not the only cost of relocating to be near the grandkids. Depending on which state you move to, you could pay more in taxes, insurance, or cost of living, all of which puts pressure on your retirement budget. That's why the second question to ask yourself is: Can I afford my lifestyle and a move back if I had to?
After all, you could be ready for your final place of residence, but that may not be true of your adult children. If you moved to live near them and then they decided to relocate, you may find yourself wanting to go back to your original home.
"So many people price what the cost is to move out to this new location to be near the grandchild, but they never price out what the cost is to move back," says Shope. Should you have to move back, not only would you be reentering the market at a higher price point than when you originally bought a home, but you would have lost tax breaks from moving.
3. Will this location still work if I need caring for?
When you move to be near your grandkids, you might start eager to play cheerleader, chauffeur, and caregiver. But as you age, getting around becomes harder, making it important that you choose a location that continues to support your independence. That’s why you must ask yourself: Will this location still work if the tables turn and I am the one who needs care?
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"Most people make this move while they are healthy, and the value they bring is physical: carpools, babysitting, being at the pool. Twenty years later the direction of help reverses, and the same house has to serve a very different set of needs," says Eric Ludwig, director of the American College of Financial Services Center for Retirement Income.
While you want to be near the grandkids, Ludwig says to consider how far the location is from major hospital systems, and whether it has the specialists you may need. If you have to travel for care, will you still be willing and able to at 83?
Consider a hybrid approach
If you can't answer all of these questions definitively, then you may want to consider a hybrid approach. Instead of moving full-time to a new location, move part-time, or on a seasonal or trial basis, to the new location and see how it goes. Some retirees have a second home near the grandkids, while others opt for extended stays in hotels or Airbnbs.
Ludwig's parents, for one example, are residents of Florida and spend their summers with him and his family in Wisconsin. While they live a mile away, there are stretches in the summer where they go a week or two without seeing each other, but that is what's expected. "It’s close to my Dad’s golf buddies and their doctor appointments, so it works well all around," says Ludwig.
Editor's note: This article is part of an ongoing series looking at three questions to ask yourself before making a major financial or lifestyle decision. The other stories in the series are:
Retirement readiness
3 Questions That Determine If You're Actually Ready to Retire Early
3 Questions to Ask Before Unretiring
Lump Sum vs Monthly Pension: 3 Questions To Ask Before Making a Permanent Mistake
Where to retire
Moving to Florida or Texas for Retirement? 3 Questions to Ask First.
3 Questions That Reveal If You're Actually Ready to Age in Place
Retirement savings and spending
3 Questions to Ask Before Deciding if a Roth Conversion Is Right for You
3 Questions That Help You Find Your Perfect Social Security Claiming Age
Go Ahead and Splurge, But Ask Yourself These 3 Questions First
Before You Give Money To Your Kids, Ask Yourself These 3 Questions
3 Questions to Ensure Your Retirement Nest Egg Is Inflation-Proof
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