When you retire, do you plan to winter in one place and summer in another? Do you see your retirement as a “snowbird”? If this is your plan, you should start doing this before you officially become a snowbird. Preparing ahead of time will save you time, taxes, and hassle. As a member of the Snowbird community, I can assure you that it is a rewarding experience. But as with any activity, the better you plan, the more successful you will be.
Here are six areas where planning is key to realizing your snowbirding dreams.
1. Decide where your home really is
While it’s great winter in the southern sun and Summer in the cool northerly winds, at some point you have to call a place “home” – if not for emotional reasons then for retirement reasons. Important financial implications depend on where you choose to be your primary residence. Take Florida for example. Moving your primary residence to Florida allows you to live in your home, which saves on local taxes and provides bankruptcy protection. More importantly, Florida has no state income tax compared to many northern states.
There are more considerations than just taxes. A change of residence also requires updating your legal documents. For example, if you are relocating to Florida, you will want your last will and testament to comply with Florida law and be signed by Florida witnesses.
Establishing your primary residence requires planning. You can’t just say, “This is home” and do it like that for legal reasons. And contrary to popular belief, your domicile is not established simply by living there for six months and a day. Depending on what state you’re from (and how hungry you are for revenue), you’ll prove your residency by a combination of factors such as: B. where you choose where your car is registered and in a famous case where your dog is registered.
And yes, the actual time you spend there is crucial. Some jetsetters use an app on their smartphone that tracks their geographic location year-round to prove their residency.
2. Go digital
Speaking of apps, your snowbirding experience will be greatly enhanced with the use of digital tools. Instead of being tied to a mailbox, your recordings can be taken anywhere.
Obvious examples are electronic banking and online billing. A good snowbirding goal is to get as little correspondence as possible through the USPS. While the postal service has tools to take care of the routing of snail mail, the system is far from perfect. You will find that after a period of time they will no longer forward magazines to your alternative address.
Admittedly, building your online world can take some time initially, but managing your finances via computer and WiFi is incredibly convenient than by mail. Other digital devices that can help include security cameras and smart apps to monitor and maintain your home.
Parking meters, tolls, gym memberships, even your Starbucks account — many of the daily activities that involve your home can be made a lot easier by using smart devices instead of lugging around cards and cash.
3. Focus on your insurance
Being a snowbird creates problems that others rarely encounter. Let’s start with property insurance. Homeowner odds vary significantly between residents and part-time residents, so your “Where’s Home?” decision should include insurance costs.
And often, the snowbirders target states that present unique geographic hazards like hurricanes and wildfires. It’s important to sort through primary and secondary homes, identify necessary coverages, and then work out the details with your insurers.
Pro tip: You can save money by suspending coverage for cars sitting idle at your second home. Just report it to your insurer when you return.
And be prepared to work with more than one insurance company. Thinking back to Florida, some of the major national insurance companies don’t offer home insurance to coastal residents. You may have different home and car insurers in different places.
Medicare while snowbirding
A high priority insurance topic for many retirees is Medicare. While a Medicare Advantage plan might have served you well when you only lived in one place, snowbirding may require a switch to a traditional Medicare plan with a Medigap supplement.
Since you live in two different places, you’re probably dealing with different doctors and different healthcare systems. Traditional Medicare with an add-on plan may cost more premiums, but are cheaper in the long run because of the costs associated with visiting doctors outside of your coverage area.
4. Consider access to health care
Health issues should also be part of your overall planning process. As the old saying goes, “Don’t stay where you like to vacation.” While that may be an exaggeration, there is wisdom in this thought. Pre-retirement vacationers often seek to leave everyday life behind. However, if you settle in a remote place, you can deprive yourself of the necessary health services. A secluded island or a cabin in the mountains is a great retreat; but ask yourself if you should live here long-term, especially as you get older.
5. Make 1 plus 1 equal Fewer as 2
Snowbirding isn’t cheap, but it doesn’t have to be expensive either. You’ll find that eventually you’ll feel comfortable in both places and don’t want to lug your proverbial “stuff” back and forth on every trip. By planning ahead, you can avoid doubling the cost of living in two places.
Since snowbirding implies spending at least part of the year in warm climes, you should reconsider your fashion choices. For many retirees in southern locations, there is simply no need for an extensive wardrobe, especially winter coats and sweaters.
Pro tip: Remember that just in case, such as a wedding or a funeral, each location may need a set of formal attire.
Another way to avoid double-costing is to go back to the earlier suggestion of “going digital”. The more often you upload important documents and bank statements to the cloud, the easier it is to commute back and forth without worrying about a forgotten folder or book. This also saves on office furniture and equipment. Take your laptop and a headset with you and forgo the printer and office caddy. If you need it, there’s often an office supply store nearby that will suffice for the occasional print.
Use the goal of avoiding duplication as a way to simplify. You might find that you really don’t need a bread maker, a mandolin (whatever that is!), or a melon ball scoop in your new home’s kitchen. Retirement is a way to unwind, and snowbirding can be the catalyst.
6. Have an entrance and An exit plan
Evolving into a snowbird is perhaps the best approach. In my case, my wife and I used Vrbo properties for four winters before actually investing in a condo. It gave us a chance to learn about the target community, experiment with commuting between two locations, and learn the tricks of being snowbirds.
Pro tip: Indeed, haste is wasteful. Try dating your dream location before you are married to it.
Equally important is looking into the future and a possible exit plan. Retirees may one day grapple with frailty, financial insecurity, or the need to be with family. Ask yourself if something did happen, including the death of your spouse, where would you want to end up?
Looking to the future can lead to better financial decisions today. You can take advantage of the Snowbird opportunity to downsize your current residence, pay off your conventional mortgage with a reverse mortgage, or even choose to live in age-friendly housing such as an active adult community or a Continuing Care Retirement Center (CCRC).
If you can visualize your retirement progress, you can create a plan that will set you on the right path.
Snowbirding is a dream for many retirees. Just be sure to distinguish Snowbirding out to go on vacation. Do your research, think through the process and try it out. If it fits, grab it and take care of the details. Chances are you will love it.
Find more snowbirding inspiration here