How ‘Place’ Can Make Or Break Your Retirement Years
5 minute read
By Jean Chatzky, Host of Your Money Map show, and Education Fellow, Alliance Retirement Income Institute
It goes without saying that where you live shapes who you are as a person. That holds true in your retirement years too, a time when many people may find a new place to call “home.” But how do you pick the right place to relocate to during the second half of life? That’s a question Ryan Frederick, an expert in the field of aging with a particular focus on the role of “place,” has helped countless people answer. After spending years in the senior living sector, Frederick saw firsthand just how much the place where a person lives can impact their overall well-being. He also saw a significant need for people to be better informed about how to decide where to live during their retirement years.
WATCH Your Money Map: How ‘Place’ Can Make Or Break Your Retirement Years
Understanding Life’s “Spans” And How They Relate
Today, thanks to advancements in healthcare and technology, people are living longer. As that trend continues, it’s critical we’re not only thinking about how long we’ll live, but also the quality of the years we’re living. According to Frederick, that’s where life’s “spans” factor in–namely, lifespan, healthspan and wealthspan. Lifespan, naturally, is the length of your life. Healthspan is the quality of your health and lastly, wealthspan is how much money you’ll need for the life you desire over a period of time. “Part of the challenge and opportunity is to make sure these line up,” explains Frederick. In many ways, our finances are at the root of these spans. In particular, wealthspan is strongly tied to healthspan. If you’re not healthy, it can be a significant drain on your finances. As Americans live longer lives, it has become even more of a challenge to meet those health care needs and to make your retirement savings last.
At the root extending these spans as long as possible is a little something called “place.” “Finding your place, I believe, is the key to healthy longevity,” says Frederick. “I say that both literally–with the role of physical place–but also figuratively.” Place, Frederick says, is more than where you rest your head at night. It’s also somewhere where you can find purpose, and do things like spend time with family, volunteer or be physically active, if we wish to do so.
The Keys to Finding Your Right “Place”
“If we care about healthy longevity, literally and figuratively where we live, I believe, is one of the biggest decisions we make,” says Frederick. “Where we live has to meet our physical, emotional and psychological needs.” With so many locations to choose from, how does someone pick the right place for them, in their phase of life? The process can be complicated, but Frederick says there are some key components people should be looking for.
One of the most important factors is our financial health and the inextricable link between financial well-being and healthy longevity. In that financial realm, one of the things holding people back from changing places is the housing market. Many who have been fortunate enough to have a mortgage at an inexpensive rate might not be willing to let go of that. If you’re in this situation and feeling stuck, Frederick says there are a lot of ways to improve your place without changing your address. “There are some situations where people have seen this as an opportunity to repaint their walls, change their furniture around a little bit, or provide some spark that gives them more of an emotional connection to their place than they otherwise would.” Another option is renting your home to someone, which affords you the opportunity to try out a place you might like to call home in the future. “You might think this other place might be a better place, but you really don’t know until you try it out,” says Frederick.
In recent years, one of the things retirees have found themselves looking for during their second phase of life, surprisingly, has been employment. According to a recent study, 1 in 6 retirees are contemplating a return to work. The reason for it is twofold. On one hand, retirees are looking to earn more money. On the other hand, many are searching for purpose. “Purpose, it is one of the highest correlated factors to happiness…this idea of having something that’s bigger than yourself gives you meaning that you can point to every day,” says Frederick. The availability of employment opportunities is something that should be considered by those considering relocation, however, thanks to technology, it isn’t as critical as it may have been in the past. “We are in a remote working world, there’s more of an ability for knowledge workers to find something to do remotely,” explains Frederick.
In addition to purpose, another variable that has become increasingly important when it comes to living longer and healthier lives is social connection. According to the U.S. Surgeon General, our nation is facing an epidemic of loneliness that can have serious, physical consequences for older Americans, including increased risks of dementia, heart disease and stroke. When looking for your next place, Frederick suggests making sure the ability to connect with others is prioritized. “There are definitely design elements within the house level, and also the block and neighborhood level that can be more conducive to knowing the people around you,” he says.
A Final Word Of Advice
The challenge of picking a place for your retirement years can be extra complicated when you and your spouse disagree about where you should next plant your roots. “Rarely do couples age at the same rate, rarely do they have the same preferences and needs throughout life,” says Frederick. He adds that if communication was a challenge earlier in your marriage, it might even be a bigger deal in these later stages. What can couples do to come to an agreement? Start talking about it sooner rather than later. And, if you still can’t get yourself to a solution that comes close to working for both of you, lean once again on that financial advisor. Sometimes having a compassionate third person in on the conversation can be just the ticket. Lastly, one tool that can be helpful in assessing whether your retirement savings is sufficient is the RISE tool. Click here to check it out, get a quick snapshot of your wealthspan and figure out whether you’ll have enough money to last throughout life.