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5 Considerations for Migratory Retirees

5 considerations for migratory retirees
Photo Credit Shazwan

Last week, after Kansas City received a dusting of snow, my 20-minute drive to work became an hour-long journey. I found myself dreaming of places where winter is defined by long-sleeve shirts rather than expedition-weight parkas.

I’m still a few decades away from retirement, but it’s never too soon to create retirement goals and use my 401(k) investment plan to reach them. Part of my retirement plan is to become a ‘snowbird’ and journey south for the winter. Since I know what I want to do, it’s easier to create a strategy to reach my goals.

Whether you’re already a snowbird, within a few years of starting your migratory lifestyle or just dreaming and strategizing, here are some things to consider as you do your financial planning:

 

Buy or Rent – Probably the biggest decision a snowbird has to make is whether to buy or rent. The real estate bubble hit snowbird destinations hard – think Florida, Arizona, Nevada and parts of California. Depressed prices create buying opportunities if, and only if, you can comfortably afford to purchase a second home.

If you rent, look for a furnished place so you won’t feel like you’re moving into a storage unit each year when you prepare to journey northward for the summer.

Property Upkeep – If you’re gone several months at a time, have someone look after your home(s). Take steps to avoid burglary and prevent your home from appearing vacant:

  • Have newspapers and mail forwarded to your new address, or ask friends/family to pick them up regularly.
  • Contract with someone to mow the lawn, water plans and shovel snow.
  • Offer your driveway and/or garage to neighbors looking for an extra parking space.
  • If you’re able to find a trustworthy house sitter, this can be a mutually beneficial arrangement.

Update Your Address – Inform banks and credit card companies when you leave in order to avoid service interruptions. If a bank sees lots of out-of-state charges with no explanation, your accounts could be temporarily frozen.

Also, avoid missed payments and miscommunications by taking advantage of the Internet:

  • Sign up to receive bills and bank statements via email rather than paper mail.
  • Use online banking to manage address changes and pay bills from anywhere.
  • Establish auto-debits for bills that will cost the same amount each month.

Bills – Your utility bills will be lower in your home-based property. But continue to budget for these items because it’s inadvisable to completely eliminate utility services for six months of the year (think burst pipes in the winter and mold in the summer). Also, check with your cable and Internet provider(s) to figure out whether you can suspend service during the months you’re gone without incurring major penalties.

Insurance – Inquire about the details of your health insurance policy to be sure you understand how it works when you’re out of your primary network. Some providers may have multi-state plans while others charge higher co-pays, deductibles and out-of-network fees.

If you leave a car behind when you head to your vacation home, you may be able to suspend or lower some of your coverage levels and save on expenses. Alternately, taking a car with you could mean changing the state of your coverage.

While the initial logistics may be stressful, I’ve never spoken to a snowbird who regrets the decision to leave cold winters behind. If you have experience being a snowbird, we’d love to hear your stories and advice. Please leave your comments below.

Joe McCulloch

Senior Investment Adviser

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Smart401k is a web-based investment adviser providing unbiased advice to help employees invest in their employer-sponsored retirement plans.  Smart401k provides service to almost 11,000 clients who collectively have more than $1.5 billion in assets. Individuals receive personalized investment recommendations based on the funds in their plan and support of professional investment advisers available to answer all investment questions. Based in Overland Park, KS, Smart401k can be found at www.smart401k.com.