AARP reports about 10,000 baby boomers retire each day across the United States.
A study conducted by BankRate suggests the Hawkeye State is the best state for those nearing retirement. Iowa is a desirable option for retirement for several reasons, including the cost of living, cost of healthcare per capita, state health system performance, combined state and local sales tax, and adults 65 and older per capita.
The study also mentions that the other top-ranked states for relocating baby boomers are Delaware, West Virginia, Missouri, and Mississippi.
People often feel retirement is the time to slow down. However, this isn't the case with American baby boomers. Boomers — those born between 1946 and 1964 — have widened their house hunting and are now willing to move to more distant locations.
One of the primary drivers of this unexpected trend is affordability. The fear of a recession and rising living costs have forced many to explore new retirement options. Many working Americans feel they need to prepare for their retirement. Therefore, affordability is crucial, especially for those on a fixed income.
Over the years, Florida has been one of the top destinations for retirees looking to relocate, but there are other options. The BankRate study also ranked American states regarding specific metrics. For example, West Virginia topped the list for affordability. In terms of quality and cost of healthcare, Colorado ranked first. New Hampshire recorded the lowest crime rate in the country, and Hawaii ranked first in overall well-being as well as desirable weather.
Trending Destinations for Baby Boomers
A 2023 market study by WalletHub ranked Tampa, Florida as the best place to retire in America, followed by Scottsdale, Arizona.
Moody's Analytics recently published a report suggesting that the retiree population in Austin, Texas doubled between 2010 and 2020. Other cities recording gains in numbers of people over 65 during the same period include Boise, Idaho, Raleigh-Durham, North Carolina, Atlanta, Charleston, Colorado Springs, and the suburbs of Washington, D.C. However, some of the more traditional retirement spots failed to make this list because they received a steady stream of relocating retirees.
Moving Far Away for Affordability
Many baby boomers looking for a new place to call their home are ready to move far away in search of affordability. According to the National Association of Realtors (NAR) in 2022, American homeowners traveled a median distance of 50 miles to find their new home. The report also found that approximately 25% of these buyers relocated to places as far as 470 miles from their previous homes.
The highest percentage of these longer-distance moves was observed among younger baby boomers. This group also recorded the most significant median distance move of 90 miles. For older boomers, the median move was 60 miles.
The NAR's data also reveals that baby boomers are the market's largest home-buying group. They accounted for about 39% of all transactions between July 2021 and June 2022. Apart from affordability, this high activity in changing homes is also because of their need for more space, a house with smart features, and personal reasons such as staying close to other family members and friends.
Aging in place is a goal for many baby boomers who have already retired or are about to retire. A March 2023 U.S. News & World Report survey found that approximately 93% of respondents wanted to age in place. But 41% of respondents felt that their current homes lack essential features for older people. Many of these boomers are hesitant to move to new states and want to continue enjoying the convenience of a familiar community with friends, family members, and favorite activities.
United Van Lines' 2022 National Movers Study indicates that one in five people moved after retirement. Low taxes and suitable climates primarily inspired long-distance moves.
According to SmartAsset's 2023 retiree migration study, the top destinations for seniors were Florida, Arizona, and South Carolina. California, New York, and Illinois were the states that lost the highest number of migrating baby boomers.
According to a 2022 Hire A Helper report, saving money was the reason for moving for approximately one in eight retirees.
Tips for Retiring Baby Boomers
Migrating to a new place for a more affordable lifestyle is a good idea. However, there are other ways to counter the inflation and rising cost of living. Right now, the proposed Social Security reform is a primary concern for baby boomers. If these reform proposals become part of the law, there may be a significant cut in Social Security and allied benefits such as spousal benefits. Therefore, in these situations, retirees should look beyond Social Security for a financially stable retirement life. By preparing themselves through proper planning, many baby boomers can avoid the hassle of moving to a new place in the twilight of their lives.
One of the best ways to prepare for an enjoyable and financially independent retired life is to start building stealth wealth early. People who believe in stealth wealth focus on accumulating wealth while maintaining a restrained lifestyle.
They consciously avoid spending money on trendy items or high-end cars and focus on intelligent lifestyle choices and sound investment strategies instead of showing off what they have. Rather than defining success by flashy spending, they exercise financial discipline that controls expenses while finding ways to invest in income-generating assets.
Talking about leading a frugal life for a worry-free retirement invariably leads to the popular concept of Financial Independence, Retire Early (FIRE). To retire early, FIRE followers save 50%-75% of their income. Although it sounds challenging, many people achieve this retirement goal by finding ways to increase their earnings and keeping their expenses to the bare minimum.
Implementing FIRE is not an option for baby boomers who have already retired or are about to retire. However, it’s a good method for today's younger workforce to consider while planning their retirement during tough financial times.