Why Moving Near the Grandchildren Might Be Your Biggest Retirement Mistake
Moving down the street from the grandkids may be the ultimate retirement flex. But before you call the movers, here's why this major life pivot can backfire.
For many people, retiring means traveling, pursuing hobbies, spending time with family, and, in a lot of cases, moving to be closer to the grandkids.
Over 50% of older households live within 10 miles of at least one adult child (and 11% had a child living with them), according to an often-cited National Institute on Aging survey from 2017. A 2022 Pew Research study showed that adults 65 and older are the age group most likely to say having family nearby is very important to them.
While the numbers may have changed in recent years, one thing is for sure: many retirees overhaul their lifestyles to spend more time with the younger generations.
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While that may seem idyllic, sometimes moving closer to your children and grandchildren isn’t all it’s cracked up to be.
“I’m in the camp that 75% of the time it’s a good idea and 25% of the time there are definitely reasons not to do it,” says Evan Beach, founder and president of Exit 59 Advisory.
“When we work with retirees, we have a lot of downsizing conversations," Beach said, "and the considerations in order (when determining a move close to grandkids) are health, relationships and costs.”
The health care trap: Sacrificing your doctors
Take health for starters. Sure, moving near the grandkids means you can spend more time with them, but if your health suffers, it may limit family time.
If your children and grandchildren live miles away from doctors and hospitals, it can put a strain on your health and quality of life. That’s particularly true if you or your spouse has a chronic illness or a disease in which you need to be close to certain hospitals and/or specialists.
And let’s not forget the relationships you may have with your existing health care providers. Are you willing to give that up if you move?
Climate and lifestyle shock
There are lots of reasons people put down roots in specific towns and cities. Some move for a job, while others choose to stay in the place where they went to college. Some people move for the geography, whether it be proximity to beaches, mountains or wildlife. For retirees, what works for their adult children may not work for them.
“If I lived in Breckenridge or Vail instead of Denver, that would be a totally different conversation,” says Matt Waters, an advisor at Prime Capital Financial. Waters' parents stayed in Kansas, where he grew up, and his mother-in-law lives down the road. “It's a hard life living 10,000 feet in the mountains.”
Proximity to an airport is another consideration. If you have more than one child or like to travel, moving to a location where the airport is hours away may not work.
The same goes for the weather. A place that gets a lot of snow may not be ideal for retirees, nor will a location with multiple months of 100+ degree temperatures.
Let’s not forget the cost of living and taxes. “Is there an income tax in the state, and how high or low is it? What are the property taxes? Does it have a tax on IRA distributions and Social Security? Those are all things to think about,” says Beach.
Leaving your community behind
Moving to be closer to the grandkids has its trade-offs, and one that can’t be discounted is the community you are giving up. Whether it's friends you grab coffee with once a week, a book club at your local library or an exercise class you attend regularly, when you move to a new location, you have to start all over.
“My mom has a quilting group; she goes with people from the local university (where she was a professor), and has friends,” says Waters. To move closer to the grandkids means she would have to give that up.
In addition, for most families, the grandkids are busy with school, sports and extracurricular activities. You may think you are going to spend a lot of time with the grandkids after school and on the weekends, but that may not pan out. You could end up alone without the community you are accustomed to.
“They are going to be busy. They have stuff all week and typically weekends,” says Beach, who says retirees have to prepare to not spend time with the grandkids for several days out of the week.
Resentment and the free babysitter risk
The phrase "distance makes the heart grow fonder" couldn’t be truer in some relationships. You may love your adult children and the grandchildren, but spending more time with them can put a strain on the relationship, especially if you tend to bicker.
That’s particularly true if your adult children view you as a free babysitter, or you view your adult children as your caregivers, and neither party wants the role. A lack of clear communication about everyone’s roles and boundaries can breed resentment, making the family dynamic messy.
“It’s not all about having dinner and fun together,” says Michael Liersch, head of Wells Fargo Advice and Planning.
There's also the possibility that while you may think living nearby is the greatest idea in the world, your adult child and/or their spouse may not be too keen on it. After all, typically the child you live closest to ultimately becomes the primary caregiver, which requires time and, in many instances, money.
The last thing you want to do is force yourself into a situation where you are not 100% welcome. “If everyone is on the same page and wants it, then you can pass go,” says Beach.
If you have multiple children and decide to move close to one and not the other, that could create tension and jealousy. In that case, staying put or choosing a location central to everyone may be a better option. “Moving close to one kid over the other two could be problematic,” says Waters.
The hidden financial drain of the 'Grandparent tax'
Even if you can afford to move and have a sizable nest egg for retirement, relocating closer to the grandkids can get expensive, beyond just a change to your housing and cost of living.
Depending on the family dynamic, you may be the one footing the bill when you go out to eat, see a movie, or attend events with your grandchildren. You may also be inclined to bring them little gifts when you come over, which can quickly add up if you aren’t careful.
“If there is an expectation that when you get together, the grandparents always pay, that can create a financial strain on the grandparents and is something you really need to consider,” says Liersch. “It can really add up very quickly and create a situation where the retiree is getting overextended.”
Is it right for you?
Despite all the potential pitfalls, living near your grandchildren can be rewarding. But before you leap, financial pros say to consider what can go wrong, talk to your adult children about the potential move and set expectations and boundaries.
If stopping by unannounced will cause undue stress to you or your children, tell them. If you can’t afford to pick up the bill every time you get together, let them know in the beginning. The more you communicate, the better off you will all be.
“It's a blend of analytics and emotions,” when considering a move closer to the grandkids, says Liersch. “If you raised your kids in one location and have been there for the last 50 years, do you want to up and move at 70? Do you want to find a new grocery store and a new circle of friends? What's that going to feel like?”
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