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5 Expenses to Consider Before You Move in Retirement

The costs of moving could cancel out many of the benefits of downsizing.

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Realtor shaking hands with smiling couple outside house for sale
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By Tom Sightings

A lot of people decide to retire in place because they like living in familiar surroundings with old friends and family members close by. Others decide to stay put after they realize just how much it costs to move. Before you decide to downsize or move to the latest "best place to retire," you should do at least a back-of-the-envelope calculation about how much a move is really going to cost. Here are the five major expenses to consider:

1. The cost of selling. The major cost of selling your house is the commission to the real estate agent, usually at 5 or 6 percent of the selling price. If you own a typical middle class house worth $300,000, then that commission runs at least $15,000. You can sell your house without an agent, and about 12 percent of Americans do it that way, according to the National Association of Realtors. But that involves some expenses as well, not to mention the time and aggravation. Also, a real estate agent has access to better customers, and will probably net you a higher price. Sellers also typically spend about $3,000 to spruce up their home before they put it on the market. In addition, as a seller you likely have to pay a lawyer, along with various document and recording fees. If you're selling a condo, there may be additional fees from the homeowners' association. So, count on spending about 10 percent of the price of your house in order to sell it.

2. The cost of buying. You typically don't have to pay the real estate broker. But you likely do need a lawyer. And if you're getting a mortgage, you will have points and fees. You have title insurance, inspections and tax levies. And if you're buying a condo you might have a capital fund fee or a transfer fee. These costs can vary widely, so it pays to ask what these are ahead of time. If you're moving long distance, there may also be substantial travel costs in order to research your new location. Even if you do a lot of research online, there's just no substitute for spending some personal time in your new neighborhood checking out public transportation, schools, stores, parks, libraries and sports facilities.

3. The cost of moving. When you were in your 20s, you might have hired a U-Haul, called up some friends and done the work yourself. But you're probably not doing that when you're in your 50s or beyond. So, you'll need to pay a mover. You might need to store some furniture or other items at least temporarily. If there's a period of time between selling your old house and closing on your new one, there might be hotel bills, extra restaurant tabs and charges to board your pet.

4. The cost of re-establishing your home. After you move in, you might need to do some repairs or renovations. You'll likely want to paint the interior of the house, if nothing else. You might also want some new appliances. Then there's the cost of curtains and new rugs. And the living room sofa you thought would fit actually looks atrocious, so you have to buy a new couch. You might want new dishes or a new TV or computer as well.

5. The cost of re-establishing your life. You've spent a fortune to settle into your new home. But now what do you do? First, you have to restock your refrigerator and your pantry, and maybe buy new cleaning supplies. There may be additional charges or deposits to set up your Internet, TV or any other new service. You might want to join a golf, tennis or fitness club, which will probably require a deposit or initiation fee. And if your retirement dream includes a boat, get ready for docking fees and more maintenance, insurance and service fees.

Many of these costs of moving are mandatory. Some are discretionary. It pays to know the score ahead of time. If you're only moving to save one or two thousand dollars a year in property taxes, then you may find it's not worth it. But if you really want to change your life via a major downsize, relocation to a less expensive area of the country or a move to be near grandchildren (who may help out with your move and set up your new computer for you), then don't be scared away by these expenses. Just be prepared.

Tom Sightings is a former publishing executive who was eased into early retirement in his mid-50s. He lives in the New York area and blogs at Sightings at 60, where he covers health, finance, retirement and other concerns of baby boomers who realize that somehow they have grown up.


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mrsperlosi

If we Democrats have our way we will spend the U.S into oblivion and there will be nothing left for anyone, darlings.

June 05 2014 at 9:31 PM Report abuse -1 rate up rate down Reply
2 replies to mrsperlosi's comment
mac2jr

Always negative, don't you ever have anything nice to say? And your hate for the government and our President does not become you, you should look deeper into your soul and your heart and then check the nearly 500 good things the Obama Administration has done to help this county, and YOU....

June 05 2014 at 11:58 PM Report abuse rate up rate down Reply
user349842

Republicans spend just as much, but they spend it on more guns, bullets, and weapon systems that don't live up to their expectations!!!

June 09 2014 at 6:46 AM Report abuse rate up rate down Reply
lobowolf

Great article. We made the move from the north to the south with some trepidation.

Our advice is to start prepping your home for sale at least one year before it happens. Your home needs to show well.
Secondly, downsize all of your clothes and "stuff". Start having tag sales and get rid of the items you absolutely do not need - the set of encyclopedias comes to mind and the ton of pots and pans in the cupboard. We even got rid of the china we received as a wedding gift - it was only used a few times.
When you do move use one of the pod units - and everything you need should fit in one.
Lastly, when you do arrive at your new home and destination, get involved in the community right away. You need a support group, and folks are always willing to give advice and help.
Consider purchasing a furnished home!

June 05 2014 at 5:06 PM Report abuse rate up rate down Reply
toosmart4u

On social security and medicare, or soon to be thank a democrat. In 1935 and 1968 the republicans tried to end these 2 fine programs like they are doing to Obamacare right now. If you want to end these 2 fine programs vote republican.

June 05 2014 at 4:56 PM Report abuse +1 rate up rate down Reply
1 reply to toosmart4u's comment
mrsperlosi

Oh how sad that you never, ever will live up to your screen name dear. You are not very smart at all. How unfortunate for you that you wander through life in a state of confusion darling.
Perhaps the name of a good doctor might be of help to you doll.

June 05 2014 at 9:29 PM Report abuse -1 rate up rate down Reply
1 reply to mrsperlosi's comment
user349842

Hey, if you have an arguement with someone try sticking to the facts instead of just sling insults! You're just showing the world your low IQ...

June 09 2014 at 6:52 AM Report abuse rate up rate down
crimeslawyer

Don't move.

June 05 2014 at 1:21 PM Report abuse rate up rate down Reply
mac2jr

Things to consider about your new location:

You are moving as a Retired Person, and therefore you need to consider if there are family or friends at your new location; if there are potential mates; if there are stores within bike or walking distance; if there are medical facilities nearby; if militar if there are VA hospital or clinics nearby; if there are reduced Property Taxes for Retirees; if there are Social Services available if you are on Social Security and considered 'Poor'; if there are low cost helpers available for doing those remodel jobs you cannot do; if there are city or other local utilities that do not require you to dig up a septic or replace a well; and if there are public transportation for when you no longer can drive.

June 05 2014 at 1:19 PM Report abuse +2 rate up rate down Reply
mac2jr

Been There, Done That, and the author is right on most of what he states may happen. Missing are the Deposits for gas, electric, sewer, water, and trash that may be required, even if you had great credit in your old location. These Deposits can be into the ten of hundreds of dollars.

As for the U-haul, I found that buying a used U-haul truck worked out well as it doubled as a storage container during the 'void time' between selling and buying the old and new homes. Also, you should move to a location you like, but not buy until you have spent from one to several months in the new area; this allows you to 'determine' if you will like the area, find a suitable home, and check on jobs, living cost, taxes, etc. The U-haul will also come in handy as you 'remodel' the new location, as materials like roofing, cement, blocks, pavers, etc., are not easily transported by car. Then at the end of the move and remodeling, you may be able to sell the U-haul and get back some to all of your cost.

June 05 2014 at 1:13 PM Report abuse +3 rate up rate down Reply