Baby boomers are ready to roam and for many their roaming will take them out of the state they currently live in, according to a recently released survey.
When they do make the move, financial advisors will need to be ready to help them, say financial planners contacted by National Underwriter.
While the survey, released in November 2005 by MassINC, Boston, refers specifically to boomers in the Bay State, many other states with large boomer populations could witness the same mass wanderlust.
The survey indicated that 52% of boomers will move over the next 20 years and 35% will move outside of Massachusetts. Of that 35%, the breakout was as follows: 15% plan to move to Florida or the South; 7%, to another location in New England; 5%, to another location in the U.S.; 2%, outside of the U.S.; and, 6% replied that they were not sure.
Many other states also have large boomer populations.
The 50+ population comprised 30% or more of the population in 17 states; between 25-29% of the population in 29 states and the District of Columbia; and, between 20-24% of the population in four states. The data is based on U.S. Census Bureau estimates and compiled by the U.S. Administration on Aging. The 50+ population makes up 28.5% of the U.S. population, according to these statistics.
Financial advisors with clients who are considering a move may want to walk them through a number of points, says Bonnie Hughes, a certified financial planner based in Chattanooga, Tenn.
One of the first things a planner needs to do is to help the client balance the fantasy of a retirement home with the reality of the new location. “If you have a four over four colonial and are going to a condo, that can be a major change for a client,” she notes. So, as a first step, she says she would recommend renting for a time in order to get a better sense if the new location is really all the client wants.
For boomers who have not moved often, Hughes says the change can be stressful and boomers should be aware of the potential stress. “When you have not moved, it is a major adjustment, particularly if it is 50 miles or more away from where you were,” she says. Retirees may have a lot less flexibility both in terms of stress and finances, Hughes adds.
Financially, Hughes says that a decision to move to another state should be made based on current tax laws and not on knowledge based on an article cut out of a newspaper several years ago.
For instance, she says that in Florida while there is no income tax, there is a wealth tax, and in her home state of Tennessee there is also no income tax, but there is a tax on savings. “It goes beyond whether there is income tax or not.”
States also are tightening up residency requirements. So, she says, if you are living in New York and want to establish residency in Florida, then just having a Florida driver’s license will not be sufficient proof of residency. In addition, she says, you may also have to vote or to pay property taxes.