As the saying goes, birds of a feather flock together. In the case of snowbirds and sunbirds—affectionate nicknames for traveling retirees—this is definitely true. Snowbirds are residents of Northern states who flock to the South to escape harsh winters, while sunbirds travel north in droves to get away from summer heat and humidity. If you’re tempted to take flight in the off-season, think through the costs and logistics first.
Keep tabs on your home. You’re right to be concerned about leaving your home vacant for weeks or months at a time. An unoccupied home may be vulnerable to burglaries, broken or frozen water pipes and other events that require immediate attention. To avoid preventable mishaps, consider asking a trusted family member or hire a house sitter to keep an eye on your property. Sophisticated security systems can also help safeguard your home when you’re gone.
Choose your health insurance accordingly. If you plan to stay for an extended period of time in another state, make your Medicare insurance selections carefully. Many Medicare Advantage (Part C) and prescription drug (Part D) plans require you to stay within their coverage networks, which may not extend across state or even county lines. Medigap (Medicare Supplement) policies that cover some of your out-of-pocket costs under traditional Medicare (Parts A and B) may be used nationwide, provided the treatment and provider are eligible. If you require prescription drugs, you’ll want to make sure your prescription drug plan allows you to fill prescriptions at its network pharmacies anywhere in the country. Failing to do so could mean exorbitant out-of-pocket medical expenses that are not eligible for reimbursement.
Make arrangements to receive mail. You may think your mail can wait for your return, but what about your bills and other important documents? Consider using automatic bill pay and mail forwarding services to stay on top of financial obligations. Also, let the professionals you work with (e.g. lawyer, estate planner, financial advisor) know of your address change in case they need to get in touch with you.
Explore living options. Unless family or friends are opening their home to you, you’ll want to weigh the cost of maintaining two residences. Renting a second home or condo may offer a more affordable approach than buying. Many vacation properties are available to rent on a weekly or monthly basis. You may also want to explore home exchange networks that allow you to swap residences. If you plan to travel by recreational vehicle, research the cost of facilities with the amenities you desire.
Create a budget. Do you see your temporary move as a vacation, living your everyday routine in a new location, or a bit of both? Depending on how you plan to spend your time away from home, make sure you budget accordingly. It can be easy to spend on a whim, with the intention to get back on track once you return. Make a commitment to maintain your financial diligence by adding any travel, fun experiences or increased living expenses to your budget.
Check in with your tax advisor. The residency tax statutes can vary by state, so check the rules for each state you live or own property in to avoid tax surprises. Your tax advisor can provide suggestions about how to keep your tax obligations to a minimum when you’re residing in more than one place during the year.
Rocco A. Carriero, MBA, CRPC, is a Private Wealth Advisor with Ameriprise Financial Services, Inc. in Southampton, NY. He specializes in fee-based financial planning and asset management strategies and has been in practice for over 16 years. To contact him: 631-283-8482, 1673 County Road 39, Southampton, NY 11968 or 67 Main Street, Suite 1, East Hampton, NY (by appointment only) or roccocarriero.com.
Advisor is licensed/registered to do business with U.S. residents only in the states of NY, NJ, TX, MA, PA, NC, NH, UT, NV, CA, NM, WA, VT, MS, MD, RI, FL, MO, SC, GA, MN, CT, AZ.
Ameriprise Financial, Inc. and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation. Investment advisory products and services are made available through Ameriprise Financial Services, Inc., a registered investment adviser. Ameriprise Financial Services, Inc. Member FINRA and SIPC. 2017 Ameriprise Financial, Inc. All rights reserved.