After a couple of visits, Mike decided against it. The Hoveys are avid golfers and enjoy the theater and eating out.
“There are no really nice restaurants around there, there’s no night life around there,” Terry says. “Golf is limited around there, there’s limited social life. I don’t want to live in this kind of wide-open space where there aren’t people and things we like to do.”
The Hoveys also considered retiring to Europe, North Carolina, South Carolina and Washington state.
They ultimately decided to remain in North Texas because of the area’s cultural amenities, closeness to friends and the ease of travel afforded by Dallas/Fort Worth International Airport.
“This is really a great fit for us,” Terry says.
Before picking a place to retire, ask yourself these other questions:
— Are services nearby?
If you’re contemplating moving to an area, make sure the neighborhood has the services you need, such as doctors, pharmacies, banks and grocery stores.
“I think we have great health care,” Terry says of North Texas. “We have better choices on health care.”
— What’s the climate like?
Do you desire a change of seasons? Can you tolerate months of snow and cold? Or are you burned out from the heat?
“He loves all the seasons,” Terry says of her husband. “We don’t have all the seasons in Texas, but he also didn’t want many, many months of cold and snow and stuff like that. We like golf. We like to be outside.”
— Can you afford it?
This obviously is a biggie. When looking at a retirement location, consider the average price of a home, the area’s cost of living and the tax burden on retirees.
“When determining whether you have enough money to maintain your desired standard of living in retirement, the first question is ‘What does that cost?’” Murphy says. “The second question is ‘Do you have enough sources of income to meet that cost without running out of money?’”
Then, he says, if you’re looking at making a move, “the third question becomes ‘Will my expenses in this new place be greater or less than my existing expenses?’”
He advises those approaching retirement to record every dollar spent for a minimum of three months spread throughout the year. Then look to see which expenses will change or end in retirement.
“The bottom line is, moving in retirement can significantly reduce retirement expenses, making your retirement dollars last longer, but only if moving also results in decreased expenses,” Murphy says.
“Of course, moving for nonfinancial reasons such as to be near grandchildren or because you like golf or beaches or mountains can give you great pleasure in retirement. Just make certain you understand the financial impact of doing so prior to selling your existing home.”
— What about taxes?
Keep in mind that things may not always be what they seem. For example, Texas doesn’t have a state income tax, but it has one of the highest property taxes in the nation. What’s more, the state sales tax is 6.25 percent, but local rates can add another 2 percentage points.
“If you decide to move, things can get complicated very quickly,” Murphy says. “Generally, in North Texas, you will pay about 7 percent of the fair market value of your home per year for property taxes, insurance, utilities, repairs, maintenance and upkeep — less if your home is new and more if it is old.”
Moving to a different state may result in lower property taxes but higher state income taxes, he says.
“Utility costs might be higher or lower,” Murphy says. “Calculating all of the costs associated with a new home can be difficult without talking with one or two people who live in the same area and asking them some fairly detailed questions.”
That goes along with Terry Hovey’s advice to sample a location before actually moving there for retirement.
“Before they actually commit, lock up your house and go live somewhere for two months and see if that’s really going to be for you before you sell your house, and now you’re really in trouble,” she says.
“When people are deciding that they’re going to retire, they need to get honest with themselves about what’s important to them and how much money they’re going to have.”
©2014 The Dallas Morning News
Distributed by MCT Information Services
