Retirement 101, Module 2: Retiring on $1 Million (or a Lot Less):

Good info in this module, esp the top section. I would suggest a "proceed with caution" on a couple of the Strategies for Coping with a Shortfall though. First, moving to a low cost state: it is a lot easier to move away that it is to move back, esp if you are on a limited income. For example a very dear friend moved to a less expensive state down south thinking that it would be more affordable after her husband died and loss of his SS reduced her income. It didn't take long for her to regret that decision but because of her financial situation is unable to return. Likewise my s-I-l's parents. It is very seductive to think that moving to a "cheaper" state wll solve your financial troubles while giving you lots of sunshine but if you can't fund a return should it not work out should be the last option considered. And second Move to an Unconventional House: In addition to the rents for a lot going up consider how they stand up to wind! Just last week the news showed a "tiny house" that was blown on its side in heavy wind causing serious injury to the woman inside.
I dont mean to sound negative especially if the money is tight, a lot of thought about what could go wrong with each option and can the fix be afforded is needed.

The one thing these type of plans never address (and probably can't) is how to figure out what to spend now vs save. My hubby and I have a comfortable but not lavish lifestyle with a reasonable amount of savings. How do we decide what to spend now for travel etc. vs save for the future. My Mom is a good example. She had a decent income and lived frugally and had a decent amount of savings. Suddenly at 85 she suffered several health issues. Thanks to medical insurance she could afford the bills but when her health suddenly went down hill she ended up in a nursing home. Savings evaporate quickly when it costs $10,000 a month to be in that situation! She was nearly out of money and we were scrambling to figure out what to do next..ie Medicaid...and if she would qualify etc. Unfortunately she passed away just before she had nothing left but would have been in dire straits had she lived. How can that be planned for? Unfortunately I don't believe it can. So my delema is what to spend and what to save and I don't even have kids to leave anything to so I don't want to die with a pile of money that I could have enjoyed.

Don't recall seeing a module 1. Where is that?

Editor note: Hi Linda. Module 1 is the Introduction.

@Jean: Not clear to me why one would wish to return to a high cost state if money is an issue. Your money would just vaporize faster.

Linda, The reason people might want to return is because they miss family and friends, are unhappy with the (perceived) quality of medical care, are disappointed with the lifestyle in general, realize that if it comes to it, they would prefer to live in a nursing home near family than 1000 miles away etc. Over the years I saw many people move back to an expensive state and heard of many more who wanted to but felt trapped in the new place because of the cost to move back an the increase in real estate since they left. When I lived in SC many of the women I spoke to in the 55+ community in which we lived wanted to move back to their home states but their husbands didn't and hoped to do so if/when they are widowed or their husbands became dependent.
I understand the financial part but even the most expensive states have pockets of affordability. In NJ for example, there are older 55+ communities in the shore area that have homes listed in the 100,000s and even some lower. And a person with a very small nest egg and who relies on SS and a small pension probably would not have to worry too much about income taxes even in states with high rates.
Bottom line, money is only one of the considerations when contemplating a move and a person on a limited income is less able to "undo" a relocation than someone with greater assests.

Taxes are only a part of the big picture and you have to look at ALL of them. Property tax is low in TN but sales tax is 9.5% ! County and city taxes can add up too. Some states still tax Soc. Sec. - another thing we were concerned about.

In a "low tax state" you also don't have the services that you would elsewhere. We recently moved from the SE to the NE and LOVE IT! Our small house cost as much as the large one we left but it is worth every penny to be where we are happy and know that we fit in. No family here, our sons are scattered and not near by, so we hope to ultimately rely on a CCRC for long term care. Our savings are under $1mil. and we planned, for at least 5 years, with two different advisors so I am sure we'll be fine in the long run.

Laura, you're right -- you can't fully plan for when "life" might happen to you. Your mother got through to 85 -- mine too. But I hit 4 major surgeries in 5 years in my late 60s. Best you can do is plan a reasonable budget for what you expect (for you, maybe at least to 85-90 -- include some "good time" each year, track your plan, avoid frittering away your savings on impulse and be ready to adjust as you see the need. Because of longevity on my wife's side, our plan goes beyond 90. But already we have had to adjust later travel plans based on my health. We started all this with house paid off, small pension and @$400K. Budget and cost management has helped a lot.

Question for Jean: what are some of the 55+ properties in NJ listed in the 100k's? Thanks.

If you are considering putting a home equity line of credit into place as part of your financial retirement planning, I'd suggest doing it BEFORE leaving your job if possible. I retired this year and decided to get a home equity line from my bank for possible future emergencies. The application was a LOT more complicated as a retiree than it would have been if I was still employed (even though I bought my house for cash, it's worth several times the amount of the line of credit, my credit rating is in the 800s, I have no debt, a good-sized 401K, etc.).

Paul, try this link . There are a number that show the range of prices starts "below 100000" I cant speak for all but a friend lives in one of the Holiday City locations and the monthly fee is only $30 and that includes lawn mowing ad snow removal. Also the property taxes are low. There are a couple places up in Sussex and Warren counties that are in the $100000s too.

One other thing, if you go to the link I posted above you can select a community and there is a link for the homes for sale n that community. Many of them are older, some of the houses might need some updating but there are also some homes that have been totally updated by flippers that are still in the $100000s.

Moving doesn't solve all problems. Florida has no income tax, but the property tax is higher than our old home in Georgia. Our new home is much smaller and our lot is smaller. The really big change for us is how the medical system works differently!!

Go visit the new place in different seasons. Florida is warmer that Georgia in the winter, but the summers are HOT and HUMID! Personally, I would rather deal with hot and humid that long cold winter.

Agree with getting rid of as much debt as possible! The only debt we have is a new car bought in 2015. We don't have a mortgage or rent which is huge when living on a fixed income.

Every move costs money not just to move, to set up house - old curtains don't fit, etc.

Put in the effort to research and think everything through to reduce the chance that you will be unhappy after moving.

When we moved south after retirement we had one surprising and significant reduction in our cost of living. All of our utilities are significantly lower; probably a reduction of around 40%. Our new home is roughly twice the size of our previous residence but because it is much better built and much more energy efficient, our heating and AC costs have been reduced. It is important to understand your normal monthly “operating expenses” wherever you choose to live, but be aware that significant differences do exist, and factor that into your decisions. Additionally, because neither of us has that daily commute to work, vehicle operation and maintenance costs are also greatly reduced.

You can buy an insurance policy for nursing home care to insulate that burden.