Seniors packing up belongings

For many Americans, retirement is a dream that’s set underneath the Arizona sun or alongside Florida’s beaches. Wyoming, Colorado and Utah also get high marks for anyone looking to relocate in retirement, according to Bankrate’s “Best States to Retire” list for 2015.

And then there’s the practical thing to do: move near family and friends who could care for you if you ever have a health scare.

What’s the best thing to do? Bankrate reached out to retirement expert Eric Kingson to sort this out. Kingson, a faculty member at the Syracuse University Aging Studies Institute, is the founding co-director of Social Security Works, a retirement research group.

When making decisions about where and when to retire, Kingson says, you must balance your fiscal concerns with the very human needs that sometimes get in the way.

If someone about five or 10 years away from retiring were to ask you for advice, what would you tell them?

If you can — and this is a big “if” — postpone receiving your Social Security benefits until age 70. It’s substantially larger than if you take it at age 62. And every month you delay receiving Social Security past age 62, it’s a larger benefit for the rest of your life.

It’s like fire insurance. You buy fire insurance to deal with the risk of your house burning down. You don’t put money away in the bank for that. It’s the same for Social Security — you need insurance.

What kind of advice would you give people with 20 or more years to plan for retirement? Is there a strategy that you think works especially well?

Well, of course I’m not going to be flip and say, “Get rich and stay healthy.” But, most of us, if we can get and stay healthy, (then we) can avoid some health problems and their costs later in life. Most of us don’t have the “get rich” option, but obviously savings can be helpful. The concern I have is whether people put a lot of eggs in the basket of savings.

Of course it’s good to save, but along the way to retirement, most people are going to have life events that cause them to need the money that’s in retirement savings accounts for other things. And this is part of the problem with 401(k)s and IRAs — they’re very permeable.

We found one of the biggest reasons people are willing to relocate during retirement is to find a lower cost of living. Why is that so important?

Well, I think increasingly, older people are living on tighter incomes. The golden age of aging — when retirees could count on pensions and other sources of income like interest income on savings — that’s changed. And many older people are either in economic difficulties or just one shock away, meaning the loss of a spouse or an illness, from major financial difficulties. That really describes more than half of seniors today. So it’s not surprising that people are looking for environments that might save them some resources.

Are there other financial benefits of moving?

Well, I think it depends on where you are in your age and your health, and your reason for moving to be near family. A lot of us who are in our early 60s or early 70s want to be near our grandchildren and near our children, and so that’s a very normal human instinct and a good one.

Some of us want to move to places like Florida or Arizona to more comfortable climates and less expensive settings. But then, after 15 or 20 years, there’s a lot of movement from those areas back to where family members live for health reasons. That’s a strong financial argument to be made for having family as caregivers.