Spring may be upon us, but with many Americans still cooped up in their homes due to coronavirus-related stay-at-home orders, it can feel like an exceptionally long and brutal winter. And for some retirees, it may just give them the push they need to make next year the year they officially become snowbirds — people who flee the cold by wintering in warmer climates.
There are definitely some perks to the dual-residence lifestyle — no more shoveling or icy roads to contend with, to name a few — but joining the snowbird camp is a big decision that requires a good bit of planning. If you’re at the starting line, let this quick and simple guide be your jumping-off point.
Tips for a successful migration
1. Decide on the best location for your lifestyle (and wallet).
The main draw of being a snowbird is getting a free pass from harsh winter weather. For some, this translates to spending six months of the year in their second home. In fact, 64% of retirees said they expected to move at least once during their retirement, according to a 2014 Merrill Lynch study.
It goes without saying that you’ll want to settle on a city that feels like a good fit for your lifestyle, but your budget is equally important. Vacationing somewhere with a higher cost of living, like coastal communities, means your money won’t go as far as it might in your hometown.
Another thing to think about when researching locations is how your tax obligation and financial commitments may change. This is especially true if you’re buying a second home in another state, since you’ll have to pay property taxes. You might also be on the hook for income taxes, depending on the state. If, for example, you spend more than nine months of the year in California, you’ll be considered a resident. On top of that, you’ll need to think about car insurance, because you may need to expand your policy so it covers you driving in another state.
2. Do a trial run before committing.
Going all in on the snowbird lifestyle is a big commitment. Consider testing the waters before making a final decision. Instead of purchasing a second home from the get-go, for example, research rental properties and give your new destination a trial run for your first winter to see if it lives up to your expectations. Living there for a few months may reveal that it’s not the right place for you after all. Go into it with eyes wide open knowing that you can cut and run at any time.
This points to perhaps the biggest decision snowbirds have to make — whether to rent or buy. Your unique financial situation will be your guiding light here. Will you be burdened with multiple mortgage payments? And can your monthly cash flow accommodate it all? Renting may work out to be a more affordable option, and you won’t be responsible for maintenance or property upkeep. At the end of the day, the decision to rent or buy is a personal one.
3. Connect with a financial planner to run the numbers.
Speaking of money, consulting a competent financial advisor ahead of your move isn’t a bad idea. What will your income sources be in retirement? The average retiree spends close to $46,000 per year, according to the U.S. Bureau of Labor Statistics. Making the most out of your nest egg requires a strategy, especially since distributions from accounts like 401(k)s and traditional IRAs will trigger tax bills. And once you turn 72, you’ll be required to begin making withdrawals.
It’s also wise to revisit your estate plan whenever you experience a big life change. Moving to another state for part of the year counts, especially if you plan on buying your second home. Taking the time to update your will and beneficiaries will prevent your assets from getting tied up in probate should the unthinkable happen.
4. Make a plan for your vehicles.
As we mentioned above, you may need to adjust your current car insurance policy so it covers you driving in another state. However, some states, like Georgia, also require you to register your vehicle if you spend more than 30 days there, even if you’re a nonresident. And if you keep a car at your second home, you’ll have to buy insurance for it, which could look very different depending on where you live.
One other detail to consider is what you’ll do with any vehicles you’re leaving in your home state during the winter. In addition to keeping it safe in a garage, it’s also important to take steps to protect the engine and battery — both of which could suffer if you don’t start the car for months at a time. Be sure to change the oil before you go, and consider removing the battery and storing it in a cool, dry place.
5. Get established with local doctors.
Before you start packing your bags, do some research to make sure you won’t have any health care hiccups in your new location. In addition to connecting with a new primary care physician and any necessary specialists, you’ll want to check that your insurance is compatible with your new state. If you’re enrolled in Medicare Part A or Part B, this shouldn’t be a problem, but private insurance may be different when you leave your primary state of residence.
Does your plan allow you to visit a doctor anywhere? And what about filling your prescriptions? To be on the safe side, stock up on all your medications before setting off.
6. Button up your other house before leaving town.
Preparing your up-north home for your departure can be a big undertaking. Consider putting the following items on your to-do list:
- Shut off your water
- Service your HVAC system and turn down the thermostat
- Suspend subscription services
- Forward your mail
- Make a plan for lawn care/snow removal
- Switch off your water heater
- Put a security system in place so you can monitor your home from afar
- Make plans for any pets you’re leaving behind
Some snowbirds opt for a housesitter to keep watch during the winter months, which may be worth considering if you aren’t keen on the idea of leaving your home unattended for such a long stretch. Those hoping to bring in some additional income can also look into subletting their homes. Just keep in mind that unless you hire a property manager, you’ll have to make yourself available for any maintenance issues that may come up.
If your personal vision of retirement includes becoming a snowbird, doing your research on the front end could save you money and potential headaches down the road. Think ahead, make a plan and stay open to wherever the journey takes you.