Sunday, November 20, 2005

They are at the starting line

You are going to start seeing alot more articles like this one...
How to find a place to retire
Thursday November 17, 6:00 am ET
Holden Lewis

Millions of people retire every year, and they have to live somewhere. The question for many is: Where?
Retirees have a lot of options. They can stay in the current home, move to a more-suitable dwelling nearby, move far away or even live a nomadic life. There is no such thing as a perfect place to live in retirement, but there's a method to finding a good match. Here are four pieces of advice.

1. Realize that your needs might change
Just as people switch careers during their working lives, they often go through more than one phase of retirement, says Andrew Schiller, founder of NeighborhoodScout, a search engine that helps people figure out where to relocate. He says a 62-year-old and an 85-year-old have different sets of needs, "and because of that, this isn't just a decision that people make once -- and each time, their criteria are a little different."

For a lot of white-collar people, entering retirement is like slipping into a cold swimming pool: They do it in increments, getting accustomed to the change, rather than plunging in headfirst. These retirees gradually scale back their work hours, easing into full retirement.

"They know they can stay in touch with their computer and cell phone, and work anywhere they want," says Tom Kelly, co-author of "Cashing In on a Second Home in Mexico: How To Buy, Rent and Profit From Property South of the Border."

2. List your values, likes and dislikes
Even if you plan to stay in the same place after you retire, it's a good idea to draw up a list of what you want in a community. The list might give you a newfound appreciation of your town, or it might convince you to start looking around.

Numerous books offer rankings of cities based on categories such as climate, crime rate and availability of medical care. They can give you ideas, but you should come up with your own list of criteria, advises Warren Bland, author of "Retire in Style: 60 Outstanding Places Across the USA and Canada."

In his book, Bland scores cities on 12 factors. To be sure, "proximity to a Talbots store" isn't one of those dozen criteria. But his wife, Sarah, couldn't bear to live in a town without one of the specialty women's clothing stores. "People can start out with the 12 criteria that I have, for example, and make their own ratings when they visit," Bland says.

Bland, a geographer at California State Univeristy, Northridge, spent one to four days in each of 90 cities while researching the book and its forerunner, which described 50 affordable places to retire. One of his highest-rated cities is Portland, Ore., and the Blands might retire there, when they move from Los Angeles, for good. But they don't prefer Portland just because it scores high. It's more complicated than that. They like it because of "the combination of factors like absence of bad things and the presence of good things that make it special."

The Blands like, among other things, Portland's public transit system and the hilly landscape. Others might not care about public transportation and prefer flat land to hills. That's why you have to come up with your own criteria and rankings.

Schiller says, "You might want to consider other things like the tax bite, safety from crime, how fast-paced or slow the area is and if it matches or maps onto your value set. All those are important aspects to be included beyond just affordability, beach and sunshine."

He calls the list a "recipe" of things that are important to you. He recommends keeping it to around 15 to 20 items. "Then go through the struggle with your significant other by putting them in order, so if you have something that's No. 1 there can't be another No. 1."

3. Find out what your target places are like
Once you have a list of things you want in a community, do some research in books and online, and consult your memory of past vacations to come up with a prospective list of cities.

Remember to include the town where you live now. "Evaluate how closely you're tied with your local area," Schiller says: You have friends and maybe family nearby, and you know your doctor and belong to local organizations. About three-quarters of retirees consider relocating, and about three-quarters end up within 50 miles of where they were living before retirement.

Don't automatically move to your favorite vacation destination. If you like Florida or Arizona in winter, you might hate it in summer. You might enjoy the autumn leaves in the Berkshires, but find it brutally cold in winter.

If you can swing it financially, try to live for at least a few weeks each in the places you're considering. Bland recommends spending a lot of time there at the worst time of the year -- when it's most crowded with tourists or students or when the weather is least comfortable. He and his wife spent winters in a row in Portland, when the weather is at its cloudiest. They liked it anyway.

The cost of living is lower in Portland, too -- at least, for the Blands. After all, they live in Los Angeles, with some of the highest home values in the country. A lot of retirees have owned homes for a long time in high-price areas, and they can take advantage of what Bland calls "equity take" -- selling a house for a lot of money, buying a home elsewhere for much less, and saving the rest to fund retirement.

Schiller warns people not to focus too much on the cost of living. There are other factors that are easy to overlook, such as the residents' level of education. Subscribers to NeighborhoodScout (cost varies from $19.95 for a week to $99.95 for a year) can map the education levels of an area's residents, find out where the best public schools are and so on.

Remember that you probably will end up selling the house someday, so even though you don't have children, you might want to buy in a good school district, so the home's value holds up.

4. Beware churn
Many retirees move, then discover that they chose the wrong place. So they move back to where they came from. Schiller calls this "churn," and notes that it wastes a lot of money -- moving charges, real estate commissions and so on. Churn is stressful, too.

In Phoenix, Schiller says, for every five people who move to the city, three move out. Florida has a lot of churn, too, he says, as Northeasterners move to the Sunshine State and discover that it's sunnier, hotter and more humid in the summer than they dreamed possible.

You could embrace another kind of churn. Many retirees split their time between two homes, and others live the nomadic life in a recreational vehicle or aboard a boat. They even do that while working part time, Kelly says: "The options for these folks are just all over the board given their interests and the ability to telecommute."

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