How to decide where to live in retirement?

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Talk about a weighty and also very personal question! All the way back in my very first post, I mentioned that my family relocated just a few short weeks after I left the workplace. How did we decide where to live? This is certainly an important question for all retirees, whether early or at a more traditional retirement age. For some, this answer was decided long ago – whether to stay in their current home, turn a once-vacation property into a primary residence, or some other predetermined path. But for others, it’s a decision made much closer to when they achieve FIRE – and that was the case for my family. We made our final decision on where to live just six months before the big move! How? Read on…

Financial elements are essential to consider – and easier in some respects

A key aspect of deciding when you can retire is determining how much you need to save, which comes from establishing your retirement budget. That budget must of course include the cost for housing, whether that means a new or existing mortgage, current or estimated monthly rent, or at minimum the cost for upkeep, utilities, and all those other things that come along even if you already own your retirement home. For the last eight years prior to my retirement, we lived in the San Francisco Bay Area – among the highest cost of living regions in the world. The budget on which we wanted to live in retirement wouldn’t support us staying there (and we didn’t want to anyhow). So our decision on where to live in retirement was absolutely influenced by our target monthly housing cost. As we were planning to buy a home this meant a mortgage. Spoiler alert: the house we ended up purchasing was less than 1/3 the price that a comparable home would cost in the Bay Area!

Another essential aspect to consider is taxation – particularly in the United States where this aspect varies a lot. There are myriad YouTube videos and articles written about the “Top 10 Places to Retire”, as you may have found. From a financial perspective, these pieces tend to focus on things such as whether a state has income tax and/or sales tax, the relative cost of property taxes, and how they treat taxation of retirement income such as Social Security. There is no question these are key topics to consider. In our case, we elected to stay in California for now, despite the high state income and sales taxes – more on that later. That said, the latter differs based on municipality, and we are now living in a town that has a lower sales tax rate than what we had farther north.

How to pay for healthcare is essential to consider as well, and is a topic I’ve covered previously. If you plan to keep the health insurance you have presently in retirement, ensuring you will maintain access to doctors, clinics, and other elements of healthcare is essential. The availability of these resources, as well as the cost of to access them, often differs markedly based on geographic area, so this warrants investigation. In addition, the cost of your monthly healthcare premiums – even within the same health plan and insurance provider, also can differ substantially. In our case, our monthly premiums are >$300 cheaper in the town we moved to just a few hours south of our previous location – for the very same plan & coverage! If you will shop for a plan on the ACA exchange, the options differ quite a bit depending on which state you are looking at. As healthcare absolutely impacts your retirement budget, these costs must be investigated early so they can be factored in.

These are just a few of the financial factors to consider. Other costs will vary based on area as well, and should be investigated. In our case, our utilities and our auto insurance got cheaper when we moved, which was certainly positive for our retirement budget!

Beyond money – the truly important things

In many respects, finances are the “easy” part of the equation. They are tangible, readily defined, and easily investigated. We definitely spent far more time thinking about all of the other reasons we would want to live in one area vs. another. Leaving the workplace is a big move. Relocating your family is yet another big move (literally, sometimes!). Therefore, there are myriad factors worth considering before making a decision. After all, post-retirement – whether FIRE or traditional, you will no longer spend the majority of your waking hours at work. Where do you want to live? This isn’t just weekends and holidays, but every day! We started from a position of no limitations; staying in the US was likely but not certain. How could we decide when the options were so many?

A bit more than a year before I was to leave the workplace, we started to get serious about planning our future move. It was time to move from daydreams to action! After a period of research and a variety of discussions, we took an international move off the table for the foreseeable future. Our daughter was going to be entering high school and as a family we decided that she would graduate from a US school. We determined that our passion for international living would for the time being, be met by vacation travel (little did we know COVID-19 was around the corner). Besides, we knew we could revisit that decision later. OK so how to choose where to live in the US?

My wife, Lorri, and I decided we would each make a prioritized list of things that defined our ideal retirement town. We each spent time separately coming up with a list of 10-15 factors that mattered to us. We asked our teenage daughter for input as well. For example, living in an area with easy access to hiking and biking, the quality of schools, and various aspects of climate are examples of factors we listed. Then we came together to consolidate and force-rank our list. Since I approach most problems with an engineering mindset, a spreadsheet was central to this process! We then used those factors to evaluate a list of potential areas we’d been considering. This would help us decide what remained on the list, what was off the list, and where we needed more data to make a determination. Here’s a snapshot:

You’ll note that I added some of the financial factors to the table as well. We also used quantitative or qualitative scoring to place each factor into one of three grades: red/yellow/green. This gave us a really good foundation to prioritize our further research. But we weren’t done yet!

Making the decision: there’s no substitute for visiting in person

Next, we started digging in deeper on the areas that ranked highest. That involved a lot of reading and also researching otherwise online. We deprioritized some cities based on our findings, and removed others from consideration. For the former, we decided we might visit them later, but they weren’t on the top of the list. We also started leaning towards staying in California despite some of the financial downsides, due to ready access to the great CA state university system and climate advantages (very important to Lorri!). Next we planned our first visits, including ones to several different parts of California.

If there’s one thing I learned pretty quickly, it is that there can be a big difference between virtual vs. in-person research. I know that seems painfully obvious, but I was surprised several times by how quickly we cooled on a town once we spent a day or two there vs. our initial interest level. It’s also a very different thing to think about vacationing somewhere vs. living there full-time and year-round. Again, that sounds terribly obvious but it really is a mindset shift which I believe you have to undertake.

Lorri was really great about helping us stay focused on the key questions and ensuring we got what we needed to out of our visits. As a simple example, she recommended we walk to downtown from neighborhoods that seemed interesting, as this is something we’d be doing often post-move. It was also important to go beyond the more tourist-type stops and check out the local scene – the stores, schools, entertainment, and other resources. I’m someone that has moved 11 or 12 times since graduate school, and I’ve never spent so much time really thinking through what it would be like to live somewhere new. I had always been working full-time before, and admittedly hadn’t always been terribly thorough in considering these aspects.

So how did we land on the Central Coast? Sure, the great wine was a positive influence but it was a good deal more than that! Honestly, it just felt right. Yes, it ticked the most boxes on the spreadsheet (it is #7 on the screenshot above). But it was a good deal more than that. I had a strong feeling after our first visit, and this sentiment only grew stronger after a few more trips. I believe we kept our minds very open to the other options on our list – and I think this is essential. But I also believe that all three of us in the family felt this was the right spot for us pretty early on in the process. Following the methods we had laid out just made us that much more confident in our selection, particularly in the context of the other areas under consideration. There are always trade-offs, of course. But we are very happy with the decision we made!

But it’s also not necessarily a permanent decision!

Despite having a pretty solid process that we feel was the right level of due diligence, I don’t want to suggest some absolute permanence in the decision we made. We are always open to the possibility of change! For us, we felt it essential to make a decision on somewhere we think we might want to live for the rest of our lives. More than six months later, we are feeling great that we did a good job of that. But it’s still early of course. That said, we also have a built-in hedge here given the very active tourism in this area. By that I mean we could easily rent our new home down the road, should we decide to live elsewhere either part- or full-time. We still have a very real international living itch to scratch and vacations may not be sufficient!

That said, this is an important decision and one to take very seriously. However, it is effort well spent and that time taken will pay off many-fold once you realize how happy you are in your new town. This is not an area where you want to have buyer’s remorse! While COVID-19 restrictions means we cannot do all that we wish to explore our new area, we are very thankful that we prioritized being within a 30-min. walk to downtown – and also having ample access to hiking and outdoor activities!

I wish you luck in your own search, whether near-term or farther down the road!

A brief diversion – some have recommended that I start a Twitter account for this blog, which I’ve now done. If you’re so inclined you can now follow me on Twitter: That also means I can now do fun stuff here in the blog like refer you to my last post:

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