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The start of a new year often brings fresh reflections, especially for retirees or those nearing retirement. Many begin to question whether relocating—across state lines or even to a different country—could better align their desired retirement lifestyle.

For some, a move may be driven by financial considerations—seeking a lower cost of living, reduced tax burden, or a better real estate market. Others may want to be closer to family, live in a warmer climate, or enjoy a community with more retiree-friendly amenities. But while a retirement relocation can open the door to new opportunities, it’s important to evaluate the potential trade-offs. Careful planning can help you avoid financial missteps and ensure that your new destination not only supports the lifestyle you envision, but your overall needs in retirement. In this article, we’ll explore key factors to consider before relocating, including:

Cost of living and home prices compared to your current residence
State and local tax rates—or international tax considerations
Tax rules for California residents that may still apply even after you leave the Golden State
Healthcare access and proximity to family and essential services
Crime rates, community growth, and long-term economic outlook

Critical Factors to Consider Before Relocating

A successful move requires more than just choosing your preferred destination. Here are key considerations to help you make an informed decision:

1.) Home Prices & Cost of Living Comparisons
The price of housing and daily expenses can vary significantly between states, cities, or even neighborhoods. Before moving, compare:

Median home prices vs. your current property’s value.
Property tax rates and whether they will increase or decrease post-move.
Everyday expenses, including groceries, utilities, transportation, and insurance.
HOA fees or community costs (especially in retirement-focused developments).

Example: A retiree moving from California to Arizona may find home prices more affordable but should also factor in higher summer utility costs and local property tax rates.

2.) State & Local Tax Implications
Your tax burden could change significantly based on where you move. Some states—like Florida, Texas, and Nevada—do not tax individual income, while others impose high state income taxes or estate taxes. Key areas to research include:

State income tax rates (Will you pay taxes on retirement income, pensions, or Social Security?)
Sales tax and property tax rates (Some states offset low income taxes with higher property taxes).
Estate and inheritance tax laws (Do they impact your long-term wealth transfer plans?).
Local tax structures (Some towns or counties impose additional taxes).

Example: A retiree moving from California (top income tax rate of 14.4%) to Florida (no state income tax) could see significant tax savings, but Florida’s higher insurance costs and hurricane risks should also be factored in.

3.) California-Specific Tax Rules for Retirees Moving Out of State
Even if you move out of California, you may still owe state taxes in certain situations.

Residency Audits & Tax Ties – The Franchise Tax Board (FTB) closely examines former residents who still maintain financial, business, or property ties to California. For a deeper dive into how residency audits work and how to properly sever tax ties, read our previous article “Leaving California for a Career Move? You Might Still Be on the Hook for State Taxes”, which covers California residency audits.
Deferred Income Taxation – If you have California-based pensions, stock options, or deferred compensation, they may still be subject to California taxation.
Real Estate Taxes & Withholding – Selling a home in California? You may need to pay real estate withholding tax (3.33% of the sale price) and capital gains tax.

Strategy: Work with a tax professional to ensure you take the necessary steps for a clean break from California’s tax system to avoid unexpected residency audits.

4.) California Property Tax Transfers & Like-Kind Exchanges
If you’re staying in California but relocating within the state, take advantage of tax-saving opportunities:

Proposition 19 – Allows homeowners 55+ to transfer their property tax base to a new home anywhere in California.
1031 Exchanges – If selling a rental or investment property, you may defer capital gains taxes by reinvesting in another like-kind property.

Example: A retiree downsizing in California can transfer their lower property tax rate to a new home, avoiding a major property tax increase.

5.) Healthcare Access & Proximity to Essential Services
As you age, proximity to quality healthcare becomes a crucial factor in where you live. When evaluating locations, consider:

Availability of top-rated hospitals and specialists for ongoing care.
Medicare Advantage or Supplemental Insurance coverage (Not all states have the same plans).
Access to home healthcare or assisted living options if needed later in retirement.
Proximity to family or caregivers who can provide support.

Example: Moving to a rural area may offer lower home prices but could mean longer travel times for medical care. This can be particularly risky if you face a sudden medical emergency.

6.) Local Economy, Community Growth & Safety
Before settling in a new location, research the area’s long-term economic outlook and community stability:

Crime rates – How does the area's safety compare to your current community?
Town/City Finances – Has the town ever filed for bankruptcy or faced major budget deficits?
Future Development & Infrastructure – Are new businesses, hospitals, or transit options planned?
Population Trends – Has the area seen growth or decline over the past 5-10 years?

Example: If you are choosing to move to a small town, check if it is experiencing an economic decline, which could affect property values, services, and amenities.

7.) Travel Costs & Accessibility to Friends & Family
Moving in retirement can be exciting, but will your new home make it easier—or harder—to stay connected with loved ones? Travel costs and accessibility may become more challenging over time. Here are some key factors to keep in mind:

Distance to major airports or transit hubs.
Flight availability and average costs for frequent visits.
Whether travel costs offset potential savings from moving.

Example: Retirees who move internationally may face visa restrictions, tax complexities, and higher travel costs when visiting loved ones.

Next, Spend Time in Your New Location Before Committing

Before making a permanent move, it’s essential to experience your new location firsthand to ensure it meets your expectations year-round. Visit during different seasons and consider renting for a few months to truly experience the community, cost of living, and daily routines. This also gives you time to assess access to healthcare, transportation, and essential services—ensuring your new location supports your long-term retirement goals.

Thinking about relocating?

We’ve put together a step-by-step workbook to help you navigate the planning process and ensure your transition is as seamless as possible. Get the workbook >

When you’re ready to start planning, our Certified Financial Planning (CFP®) professionals can help you evaluate the financial and tax impact of your move—so you can transition with confidence. Call Aspire Planning Associates at (925) 938-2023 today to start planning your next chapter.