Looking Ahead
Moving - Will It Save Me Money or Cost More?
The answer is simple…it depends. There are lots of variables to consider if you're thinking about moving to save money. The difficult part is making sure you don't save money in one area (like real estate taxes), and spend more—maybe much more—in others (like income taxes, utilities, health care, transportation, etc.). So here are some suggestions on what costs to compare:
- Municipal Taxes and Fees - real estate tax; state and local income tax; state and local sales tax; auto or other licensing fees; fees for water, garbage collection, sewage, storm drainage, etc.
- Quality of Life - food, transportation, utilities, entertainment, health care facilities, home nursing or housekeeping.
- Major Goods - replacement appliances, automobiles, major home maintenance or repairs (e.g., roofing, windows, driveways)
- Housing - rental fees, association fees, homeowner's insurance (affected by the quality of local crime and fire prevention), routine yard and home maintenance
Downsizing
Rather than move somewhere else, many people prefer to stay within their region but downsize from their current house to a smaller house, cooperative or condominium, or an apartment in the same area. However, you must again be careful to make sure that you won't actually be increasing your costs, or ending up in the same spot, financially. Ensure you include the following in your calculations:
- Association Fees - Condominiums, cooperatives, and similar associations have common charges or association fees. These may or may not cover utilities and/or maintenance.
- Escalating Rent - If you decide to rent, take into account the fact that rent generally escalates with inflation, even in rent-controlled or subsidized senior housing.
- Legal Fees, Mortgage Expenses and Payments - If you've mostly or totally paid off your mortgage, buying a new residence could mean legal fees and new or increased mortgage payments.
- Losing "Grandfathered" Status - Older properties may be "grandfathered," which means they don't have to conform to more recent zoning requirements and/or fees. If you move, even locally, you may lose those exemptions.
Other Thoughts about Moving
There's often more to moving than finances. Note that moving at any age can be very stressful. Moving can often require a shift in lifestyle, sometimes significant. Here are some things you may want to consider before moving, especially if you're moving to a new area:
- Would you miss not seeing your friends—or family if nearby—for long periods?
- Would you be comfortable changing doctors or going to unfamiliar healthcare facilities?
- Do you make new friends easily?
- Is it easy for you to learn new roads, discover new stores, and so on?
The answers to most, if not all, of these questions are probably qualified at best. But it's better to consider them before moving than after.
