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Priorities & Preferences: How to Choose a Great Retirement Destination

Paying for housing is a major component of retirement expenses, and it can determine whether you decide to move or to age in place. If you move, whether you own or rent could come down to how much flexibility you want.

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Temple, Texas, doesn’t have a lot of name recognition, but it had enough otherwise to convince Army Col. Jeff Harris to retire to this city of 70,190.

“It’s sort of a small-town feel, but it’s got a lot of great things going for it,” says Harris, who retired in 2014 after 30 years of service. He was attracted by venues that promote art exhibits, ballroom dancing, concerts and theater. High-quality medical care, including a regional medical center and a veterans’ hospital, also was part of what he considered.

Of course, just because those factors make Temple a great retirement destination for Harris, those factors don’t make it necessarily right for you. During their working years, most people move into an area because of their employer, says Bill Demaree of financial-advisory company Demaree Retirement Services. “When they get into retirement, they move into an area that’s more conducive to what they want their life to be.”

Experts agree that when you determine your retirement destination, it’s most important to consider the cost of living and housing. The tax rate and crime rate also help to paint a picture of how retirement destinations stack up, experts say. However, retirees’ needs differ when it comes to health care, and preferences vary on climate, cultural attractions, availability of transportation and work opportunities.

Although the definition of a great retirement destination varies, calculating the factors that go into affording that choice is a challenge that all retirees face.

STAYING HOME. Census Bureau pegs housing as 29 percent of the expenses that make up your cost of living, which is the largest percentage of its cost of living index. (Census Bureau’s index includes groceries, health care, transportation, utilities, and miscellaneous goods and services.) Given that, you might decide that the best retirement destination is the one where you are.

In two studies that research and advisory company ProMatura Group conducted in 2013, at least 25 percent of soon-to-be retirees said they considered moving. The remainder, whether out of financial necessity or personal preference, believed that they would age in place—retire in their current home or find another residence within their current community. This correlates with the findings of a December 2011 report by AARP, which found that 80 percent of people who were 65 or older believed that their current residence was where they would live the rest of their life.

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Not even the draw of better weather elsewhere is enough to prompt a move, according to ProMatura. “A lot of people are accustomed to their weather, and they’re happy with it,” says Margaret Wylde, who is the company’s president and chief executive. For example, snow is a regular part of everyday winter life for people who live in the Midwest, and the typically lower cost of living there compared with, say, being on a coast, is a trade-off, Demaree says. “They can get more bang for their buck.”

“People get overwhelmed by choice,” says Jan Cullinane, who is the author of “The Single Woman’s Guide to Retirement.” “They can move anywhere, but the easiest choice is to do nothing.” Although staying put is much easier than moving is, it still might require you to spend money to make your home more accommodating as you age, Cullinane says. For example, you might have to relocate or renovate rooms, such as moving laundry equipment upstairs from the basement, if mobility issues arise and you can’t navigate stairs easily.

The cost of such a remodeling varies from a few hundred dollars if, say, you simply add handrails or nonslip flooring to a bathroom, to tens of thousands of dollars if you move a bathroom, a bedroom or a laundry room.

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