Planning to relocate to retire? 6 things to think about first

Relocating when you retire - or begin de-accumulating your superannuation and investments - can have a huge material impact on your long term financial plans. Here are 6 key things to think about before you make the move.

By Alex Brooks

While we spend our busy lives working and accumulating superannuation, we often foster ideals of our ‘dream home’ - a fantasy destination that exists more in our minds than in reality.

When it’s time to retire - or begin de-accumulating our superannuation - many people who rent or still have a mortgage realise that moving to a cheaper home must be part of the plan.

Indeed, our governments encourage it with the tasty downsizer bonus hat allows people approaching retirement to whack $300,000 per person into superannuation without tax, boosting tax-free income from superannuation over your lifetime.

Australians have been seachanging and treechanging for decades - it’s part of our psyche to pack up and declutter our large suburban family home and move to the ‘good life’ by the beach or bush.

Others may fantasise about moving overseas, where their limited retirement income dollars stretch further.

We may dream that we can free up enough capital to spend our days fishing, golfing, swimming and living the high life.

The reality may not be so sparkly. Moving far from family, friends and the purpose that keeps us connected and motivated can be wrenching.

Choosing where to live once you reach preservation or retirement age - usually between 60 and 67 in Australia - can involve a lot of soul searching and number crunching.

If you’re thinking about moving home in midlife, keep these 6 retirement location considerations in mind before you pick up and go.

1. Holidays aren’t real life

You might love visiting Noosa or taking restful country breaks for your holidays, but living there full time can be very different. The choked traffic and high cost of living in tourist towns might not make moving to your favourite holiday spot realistic. The flow of travellers to these areas, too, may disrupt the restfulness of daily life. If you can, give your ideal moving destination a trial run by renting a house for a few weeks and testing life as a local.

2. Your health and wellbeing is tied to where you live

One of the strongest predictors of our life expectancy is your postcode. Australia has a health tracker by area map that allows you to look at the different health issues in certain locations.

This is because the infrastructure and services around our homes - things like access to parks, healthcare services, public transport, education, and employment -  impact our ability to access and achieve good health.

If you move to an area that has a lower life expectancy, there’s a risk you take on the health challenges and life expectancy of that area, too.

Easy access to reputable healthcare is crucial to a happy and healthy retirement. A remote location might not have reasonably close or high-quality care.

Read more on ABC and stories from around regional Australia about health care.

Most of know there is an aged care crisis in Australia, with too few beds for a burgeoning older population, but there’s also a shortage of younger people working in healthcare.

The Australian Government is slowly publishing data about this (which can be complicated to understand) but you can now check for workforce shortages in areas or locations you’re interested in moving to by looking at the health workforce locator.

You can also check the aged care service list, last updated in 2022, for complete addresses and listings of aged care facilities in areas or locations you are interested in moving to.

Generally speaking, wealthier areas in capital cities - which are the most expensive to rent or buy a house - are usually also the healthiest. Highly populated areas also have larger numbers of residential aged care places.

Read more about aged care around Australia.

See the map of locations of aged care around Australia in the map below:

3. Infrastructure and services count as much as the lifestyle

Do you want access to public transportation? Do you mind having to drive to buy groceries and eat dinner at a restaurant, or would you prefer a bustling village where everything you could ever need is within walking distance?

Australia is a sprawling country. The vast majority of the population lives in capital cities so moving away to a seachange or treechange location can mean the roads aren’t as smooth, the public transport not as good and the part-time work opportunities are more limited.

You can check where governments are investing in more infrastructure like roads, Check Infrastructure Australia’s priority list to look at the locations around Australia that receive investments in large infrastructure projects.

Different locations charge different taxes and fees

Each state or territory in Australia will also charge different amounts for basics like car registration, insurance, council rates and so on. Queensland and Tasmania give their residents free rides in an emergency ambulance but in other states and territories will charge you hundreds - sometimes thousands - of dollars for an ambulance ride, which means you need to pay for private health or ambulance insurance.

There are also different rules and regulations around things like your drivers licence - for example, in Victoria, there are no requirements to have a yearly test as you age but in New South Wales you need a yearly assessment from the age of 75.

Besides renting or purchasing a home to live in, retired people may want to consider living in:

Retirement villages: properties specially designed for the needs of people over the age of 55.

Community or land-lease villages: properties with standalone units - much like cabins or a freestanding house - where you lease the land but buy the unit.

The contracts and legislation governing these property options also vary from state to state. Many people choose to move from their own home into one of these housing options later in retirement, as it often frees up more capital and has less maintenance requirements.

It’s important to look closely at any contract, and understand the terms, conditions and legal protections in place for you should you choose this type of property. In more remote areas with less demand for retirement villages and land-lease villages, the contracts may have less room for negotiation.

4. What’s the real cost of being away from family, friends and what’s familiar?

If you have to put greater distances between you and your loved ones, what’s the emotional and financial cost going to be?

Remember to factor the back-and-forth travel costs for you, your family and your friends into your decision. Visits with loved ones might become less frequent and more expensive.

If your mobility or health needs change, can you travel easily to where your loved ones are?

If you’re lucky enough to grow old, then you should factor in that your needs for care may gradually or suddenly increase.

This usually means you may have to arrange for what’s called ‘home-care services’. These services are designed to keep you living in your home, with support, for as long as you can. If you’re hoping that your family will help care for you as you age, you may need to stay close to them.

5. New geography brings new challenges - especially in the era of climate change

A new place means new weather, climate and maybe even natural disasters.

When you’re considering relocating for retirement, think about what you want and what you can handle. The balmy weather of Far North Queensland is great in the dry season, but isn’t always pleasant in the cyclone season.

What’s more, it can cost an arm and a leg to get home insurance in some locations exposed to more storm events. Take a look at North Queensland Insurance.

The Climate Council has a risk map to check ‘climate-vulnerable’ areas and locations. There’s also an Australian Government Flood Risk Portal.

6. Buying, selling and moving costs hurt your bottom line

Selling your current home and relocating to one that costs less can make financial sense.  But when you factor in the costs of things like:

• Real estate expenses (you need to pay an agent to sell your home for you)
• Stamp duty taxes
• Removalist costs

The bottom line is that making the wrong move - and paying stamp duty each time - can cost tens of thousands of dollars. Moving to the wrong location will significantly impact your long term savings if you need to pack up and sell again within a short period of time.

Check the stamp duty costs in each Australian state and territory:

• Australian Capital Territory stamp duty calculator‍
• New South Wales stamp duty calculator ‍
• Northern Territory stamp duty calculator ‍
• Queensland stamp duty calculator‍
• South Australia stamp duty calculator‍
• Tasmania stamp duty calculator‍
• Victoria stamp duty calculator
• Western Australia stamp duty calculator

Rather than purchasing a home or signing a lease, think about a test period in the new location.

Any move or relocation takes a huge investment of time, money and energy.

Make sure to spend at least a month or 2 to sample living there. Spend as you normally would on groceries, transport and entertainment to see if your budget works. Check out the health services available, too.

_{Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.}