The 2020 pandemic brought immense change to all of our daily lives. Schools shut with little notice, and all but the most essential services and offices had to turn into virtual workspaces practically overnight. Zoom calls became our main mode of communication, while our kitchen tables became home offices.
Faced with this new reality, most of us hunkered down in our homes with little to no contact with anyone outside of our core households while waiting for the pandemic to end. Others saw it as an opportunity to move closer to family or into a lower-cost-of-living area that gave them more space for less money, becoming digital nomads overnight.
If you’ve thought about giving the digital nomad lifestyle a try, here are some factors you may want to consider:
Benefits of the Digital Nomad Lifestyle
You have the flexibility of living just about anywhere—allowing you to choose a location that offers you the best quality of life. For some, that means living closer to family, moving to lower-cost areas, or choosing to experience new cultures and communities around the country or around the world.
Moving to your ideal location can give you a head start on your retirement. Depending on your chosen destination, some cities are offering financial incentives for remote workers. For example, cities and towns in Oklahoma and Arkansas are offering up to $10,000 to lure new remote-working residents— Arkansas will even throw in a new mountain bike! (Make sure to check the fine print of these programs, as requirements vary)
Your expenses will likely be lower since you no longer have to worry about commuting, keeping separate wardrobes for work and life, or restaurant lunch costs.
You’ll have more time for family and other pursuits since you’ll be spending less time commuting back and forth to the office.
Watch Out for These Pitfalls
Many companies are beginning to signal that they want their employees back in the office at least part of the time. If you want to keep your job, make sure your employer is on board with the idea of a move.
Without the social connections that on-site workers usually form, you could be less (or more) top-of-mind when major staffing decisions are being made.
If your employer allows you to remain remote, they may want to renegotiate your compensation package.
You could face unexpected state and local taxes depending on where you decide to relocate. Make sure you consult with your tax professional. You could end up paying income taxes to more than one state.
Whether you take to the road and the virtual office lifestyle or settle down in the big city, there will surely be compensation, tax, and real estate implications. Aspire Planning Associates is committed to helping you reach your financial goals, wherever your work takes you.
