Are you thinking about relocating when you retire? If you are, you’re not alone. Millions of over-50s are planning to move away from their current home as a direct result of the pandemic. It can be an exciting way to kickstart retirement, yet there are things you need to think carefully about first.
According to Legal & General, 3 million people aged over 50, the equivalent of 12%, now plan to relocate in retirement after a year of lockdowns. Covid-19 restrictions have led to many people thinking about their priorities and plans for the future. You may be planning a very different retirement from the one you had hoped for before the pandemic.
The research found there are a variety of reasons why those nearing retirement are considering moving. The top reason was to have a better quality of life, followed by moving closer to family and friends, or to live abroad. Before jumping into planning your relocation, these three questions can help you understand what impact it could have on your retirement.
1. Will it change your income or living expenses?
It’s no secret that the cost of living varies from place to place, even if you plan to remain in the UK. Taking some time to review whether relocating will impact your expenses is important. From the large costs, like buying a house, to the smaller ones, such as travelling to visit loved ones or entertainment, it can help you create an accurate picture of your outgoings.
If you plan to move abroad, you also need to consider if relocating will affect your income. You can still claim the State Pension if you live abroad, but you may not benefit from annual increases. The annual increases may seem small, but over a retirement they can add up and protect your spending power when inflation increases the cost of living. Some countries have an agreement with the UK that means your State Pension will increase, but this isn’t always the case.
2. What impact will it have on your lifestyle?
You may plan to relocate to achieve a better quality of life and the retirement lifestyle you want. Whether this is the main reason or not, setting out how you want to spend your time in retirement is important.
Relocating may mean moving away from your family and friends. Will this have an impact on your social life? When planning retirement, it’s often the big-ticket items people focus on, like an exciting holiday, but the smaller, everyday things are just as important for providing satisfaction later in life. Being close to facilities or amenities that you can take advantage of can boost your wellbeing and happiness. By thinking about what you want your day-to-day life to look like, you can find the right place to retire for you.
3. Will you have family and friends close by to offer support if you need it?
If you’ll be moving away from family and friends, it’s important to think about the support network you’ll have in your new home.
If you hope to move away, travelling back to see them frequently may be part of your plan, but will that still be possible in 20 years? It can be difficult to think about needing additional support in your later years, but it’s an important consideration. If you need some extra help in the future, would you have someone close by that can lend you the support you need?
Your outgoings can change drastically if you need to pay for some form of care or support, even if it’s just someone to do day-to-day tasks you can no longer manage. While this may not be needed, it’s something you should consider.
The key to getting the most out of retirement is to have a plan, whether you hope to relocate or not. Setting out your goals, and how your finances will allow you to achieve them, can be difficult. If you’d like to discuss your retirement with a financial planner, please get in touch.
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
Richard Fyfe is a Chartered Financial Planner and a Director of Fyfe Financial.