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Your Financial Checklist for Retiring to a New City

By U.S. News & World Report

Plenty of retirees are seeking greener — or at least warmer — pastures after quitting their jobs. Thousands of seniors age 60 and older are moving to southern cities such as Mesa, Arizona; Jacksonville, Florida; and New Orleans. According to an analysis of Census Bureau data by SmartAsset, a financial technology company that provides personal advice and data on consumer finance topics, these destinations saw the greatest net migration in 2015.

“Moving is a huge commitment,” says Ken Moraif, senior advisor at Dallas-based Money Matters. “So before you move, make sure you’ve done your homework and are going to like it there.”

You also need to do the following 10 things to make sure you’re financially ready to make the switch.

[See: Your 10-Step Checklist to Retire in 2018.]

1. Check the cost of living. The first order of business for a retiree who plans to relocate is to ensure it will be affordable. “Moving isn’t a big deal as long as you check into the cost of living,” says Clinton Smith, CEO of Government & Civil Employee Services in Indiana, Pennsylvania.

Taxes, housing, transportation, food and utilities are among the items to consider. Plenty of websites provide cost-of-living calculators that can help people determine if they can maintain their lifestyle in a new location.

2. Build your emergency fund. There can be surprises even after thorough research. “It’s always a bit of a gamble when you get that first utility bill,” says A.J. Smith, vice president of financial education for SmartAsset. Prepare for unexpected expenses by boosting the balance in your emergency fund before moving.

3. Choose new health insurance. Hans Scheil, author of “The Complete Cardinal Guide to Planning for and Living in Retirement” and CEO of North Carolina-based Cardinal Retirement Planning, says retirees often overlook the importance of health insurance when making relocation decisions. “This didn’t use to be a big deal, but it’s a huge deal in our retirement planning now,” he says.

Both private health insurance for younger retirees and Medicare Advantage plans have specific service areas. Retirees moving out of the service area will need to find a new plan, which could mean more expensive premiums and increased out-of-pocket costs.

4. Reevaluate long-term care options. Along with health care, retirees need to think about long-term care. “Are you moving closer to potential caregivers?” Scheil says. “Or are you moving farther from potential caregivers?”

If you’ll be far from family, it may be time to buy long-term care insurance or a life insurance policy with a long-term care rider if you are young enough and can afford the premiums. A continuing care retirement community that guarantees access to long-term care for residents is another option.

[See: 10 Places to Retire on a Social Security Budget.]

5. Adjust retirement withdrawals. Income taxes, or the lack thereof, are a driving force behind many retirees’ decisions to cross state lines. Those moving to a city with no state income tax may want to wait until they establish residency to start taking taxable withdrawals from retirement funds. On the other hand, retirees moving to a state with a higher tax rate may want to increase withdrawals prior to departure.

6. Calculate the cost to rent or buy. For many homeowners, it only seems logical to buy a house in their new city. However, Moraif cautions against that. Renting for six months first can give retirees time to determine if they like the city well enough to stay and to accurately gauge its cost of living.

Retirees may underestimate the true cost of owning a home, particularly if they are paying cash. “People think, ‘Once I pay off my mortgage, I’m living for free,'” Smith says. However, property taxes in some areas can be significant enough to make ownership unaffordable.

7. Check your credit score. Even if you’re not getting a new mortgage, there is a good chance your credit will be run as you set up utilities and other accounts. Before moving, check your credit score, which is available for free through many banks as well as websites. If it’s on the low side, confirm that information on your credit reports is correct and consider paying down debt to boost your score.

8. See if you need a new bank or financial advisor. Mobile deposits, online banking and ATM networks mean you don’t need a branch nearby to manage your money. However, if you feel more comfortable being able to walk in and get personal help, investigate your bank and credit union options in advance.

Today’s technology also lets people keep their financial advisors after they move. “We have clients all over the world,” Moraif says. “We communicate with video conferencing. It’s very easy to have a face-to-face discussion wherever they are.” However, you’ll want to confirm this is an option with your advisor.

[See: 10 Retirement Hot Spots in the U.S.]

9. Budget extra for entertainment. Clinton Smith recommends retirees budget extra for recreation activities after a move. “Everyone retires, and they don’t plan how to fill their days,” he says. Without friends nearby or knowledge of local low-cost activities, retirees may spend more on entertainment as they get to know the lay of the land.

10. Update legal documents. Although not a crucial step prior to a move, retirees should have all their legal documents — including their durable power of attorney, health care designee and HIPAA release forms — reviewed by an attorney in their new city. “Your will is still good in a new state, but it was written for the laws of your [old] state,” Scheil says. A good attorney shouldn’t have to rewrite documents from scratch but can make necessary adjustments to account for differing laws.

More from U.S. News

How to Save $1 Million by Retirement

The Top Travel Destinations for Retirees

10 Ways to Celebrate Your Retirement

Your Financial Checklist for Retiring to a New City originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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