Planting or pulling up stakes

By Tom Foster
E. Thomas Foster Jr. is head of strategic relationships for retirement plans for MassMutual.
Posted on Feb 20, 2019

Where your clients retire may be as important as when and how they retire.

Deciding where to live in retirement is a big decision, especially because it may dramatically affect retirees’ cost of living, taxes, access to medical care and long-term care, connectivity with family and friends, and a myriad of other personal and financial considerations. It’s an important question that financial advisors may help retirement plan participants and individual clients answer by starting a discussion as part of reviewing plans for retirement preparedness.

So what drives pre-retirees’ and retirees’ decisions about planting or pulling up stakes from their current residence? The top three influencers about where to retire are family (65 percent), general livability (36 percent) and desired weather conditions (32 percent), according to a recent survey sponsored by Age Friendly Ventures .1 Less important were healthcare, friends and employment.

"Navigating one's later years is often extremely complex for both older people and their families. Where we choose to live in retirement is a defining feature of how well we will live in older age. Seeking the right advice, at the right time, is a crucial part of planning life tomorrow," said Joseph F. Coughlin, Ph.D., founder and Director of the AgeLab at the Massachusetts Institute of Technology, in a recent news release from Age Friendly Ventures .2

Age Friendly Ventures has introduced a website, Age Friendly Advisor ( www.agefriendly.com) that provides free reviews of communities across the United States for their relative livability for older adults. The website contributes to Age Friendly Venture’s “mission to make aging easier and enable older adults to be more engaged in their communities,” according to the news release.

Age Friendly Advisor's ratings reflect how well communities support older residents and visitors by providing user reviews from local residents with data to identify and regularly update a community score. The Age Friendly Advisor ratings incorporate data contributed by the Milken Institute’s “Best Cities for Successful Aging”™ report and index, which evaluates U.S. metropolitan areas on how well they serve the needs and meet the expectations of mature adults.

Every town in the United States – from Portland, Maine to Portland, Oregon – has its own page. Reviews may be posted to any town’s page.

"When managed well, user-contributed reviews reveal an extraordinary wisdom of the crowd," noted Tim Driver, CEO and Founder of Age Friendly Ventures, in the website announcement. "Just as consumers read and give product reviews on Amazon and restaurant and hotel ratings on Yelp and TripAdvisor, Americans can now go to agefriendly.com to read and publish crowdsourced reviews tackling complicated topics around aging."

Advice perceived by peers as valuable is 'up-voted' so that it is more visible and actionable, the release stated. Community reviews are supplemented with in-person, telephone and online help from a staff of advisors, according to Driver.

Age Friendly Ventures reports that many older adults are unaware of resources available in their current communities or other communities they may be thinking about relocating to in retirement. The firm’s website potentially makes it easier for people to find age-friendly places and services for everyday living, caregiving, working and volunteering.

Beyond the social aspects of retirement, financial advisors may encourage pre-retirees and retirees to review data for communities where they want to live and include it as part of any gap or financial analysis they conduct on retirement readiness. Location is critical for calculating expenses such as purchasing or renting a home, condominium or apartment, property and income taxes, medical and long-term care expenses, and even everyday living costs such as food, transportation, dining out and entertainment.

Getting the right numbers can be critical. One in two retirees reported spending more than they expected to in retirement, according to the MassMutual Retirement Income Study .3 Forty-one percent said they spent about what they expected and 8 percent actually spent less, the study found.

Identifying closely with the mission of Age Friendly Ventures, MassMutual is a sponsor of the Age Friendly Advisor.

In Age Friendly Advisor’s announcement, Mike Fanning, Head of MassMutual US, explained why MassMutual has provided its backing: “Today’s retirees need to plan for a long journey of living their life to the fullest and anything we can do to help them secure their future is embedded in our DNA at MassMutual.”

Discussing options for where to live in retirement with retirement plan participants and clients can be part of your mission as a financial advisor and another way to become an “age friendly advisor.”

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E. Thomas Foster Jr. is head of strategic relationships for retirement plans for Massachusetts Mutual Life Insurance Co. (MassMutual).

Tim Driver and Age Friendly Ventures are not affiliated with MassMutual or any of its subsidiaries. MassMutual is a sponsor of Age Friendly Advisor.

 

1 Age Friendly Ventures, “How Did You Decide Where to Retire,” December 2018,

2 Age Friendly Ventures, “New Research Reveals 1 Out of 3 Retirees Would Choose to Live Elsewhere,” Jan. 10, 2019.

3 MassMutual Retirement Income Study, June 2018.

The information provided is not written or intended as specific tax or legal advice. MassMutual and its subsidiaries, employees, and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own, and do not necessarily represent the views of MassMutual.