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Published: May 17, 2017 6 min read
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They say that real estate is about location, location, location, but there's another element that's key when you're moving in retirement: timing. Whether your dream is downsizing from the suburban family home to a condo in a nearby city or buying a home in a distant golf community, it really matters when you take the plunge.

Buy too many years before you leave work, and you could saddle yourself with unnecessary expenses—or just change your mind. Wait too long, and you might not have the energy to go.

Nearly two-thirds of retirees have either moved or plan to move, according to a Merrill Lynch retirement study conducted with Age Wave, a research and consulting company. The four questions that follow can help you decide on the best schedule for you.

Is It Worth Buying Before Retirement?

Some people buy a place in a vacation spot while they're still working, with the expectation that they'll spend their time off there and eventually move in full-time. An early purchase can solidify your interest and connections in an area and reduce the stress when you are finally ready to leave your current home behind.

But the path to paradise isn't always smooth. People often underestimate the full costs of owning a second home, which might include a big insurance bill for properties in a hurricane zone, says Joe Heider, president of Cirrus Wealth Management in Cleveland. Those who plan to rent out their getaway for much of the year tend to overestimate the amount they'll get in rental income and underestimate the cost of regular maintenance, such as cleaning services, he notes. If you're considering buying in a resort community, don't rely on the resort's projections of rental income; talk to owners instead.

Is There a Sweet Spot Agewise to Move?

Some financial advisers say early retirement is the best time to make your final decision and relocate. Without work, you'll have ample time to test out a location—or multiple spots—before you commit. Relocation also requires a lot of energy: for sorting through decades of treasures in a family home, dealing with the inevitable hassles of buying and selling real estate, and getting settled somewhere new. Tackle it before you get to an age when it will all seem like too much to take on.

Retirees Scott and Kris Jones, ages 55 and 72, respectively, split their time between Florida and North Carolina. Before they moved from Tarrytown, N.Y., they rented for several months in both locations. The couple took advantage of short-term rental options offered by new developments in both states; they ended up buying in the Florida community where they rented and, in North Carolina, bought nearby. "If you're a social person, the people you live around are more important than the house and the area," Scott says.

Your sweet spot may also depend on family circumstances, such as when children will be out of college or living on their own.

Source: Merrill Lynch/Age Wave study
Merrill Lynch/Age Wave study

Do You Hope to Age in Place...?

Your life could go in many directions over the next few decades. Still, your thoughts about how long you might stay in your new spot could affect your timing and the specific choices you make.

If you are a couple and one of you dies, would the survivor stay in the new home? If so, there are big advantages to moving sooner rather than later, experts say. You can enjoy your new community together and make connections that could eventually support a widow or widower.

People who hope to stay put in their next home should make sure it will be practical in later life, says Kristin Bertilson, owner of Queen B Organizing in Corvallis, Ore. Is the home free of stairs, with doorways wide enough to accommodate a walker? Can the bathroom fit a sit-down shower? Is the parking close to the unit? Such features can be found in all types of communities, not just age-restricted ones.

…Or Do You Aim to Move Again?

Alternatively, you might be thinking you will move to a vacation spot for, say, the next decade and then return to your home community or move closer to an adult child. In that case, having lots of space to host family and friends might be a bigger priority than later-life practicality.

Buy or rent? Generally speaking, you are likely to at least break even on moving, acquisition, and selling costs if you stay in a home for five years, says Keith Gumbinger, a vice president at mortgage-information website HSH.

Be realistic about what you might be able to afford in your ultimate destination. If you cut your housing costs now by moving to a less expensive locale, you might bank some of your savings to ensure you could afford to return to or settle in a pricier spot later on.

Sometimes there's no intention to sell. Heider has clients who bought a ski vacation home in Colorado while they were still working, then upsized to a bigger place in the same area after they retired. Still avid skiers in their late sixties, they have placed the home in a trust for their three adult children, who also love to ski.