Want a Snowbird Retirement? How to Make It Happen

Fall has arrived, and it has brought colder weather with it. Do you enjoy the cold? Or would you prefer to escape winter weather for a warmer climate in retirement? If so, you’re not alone. Millions of retirees, known as “snowbirds,” escape their cold-weather states every winter for warmer destinations, like Florida, Alabama, and even Arizona.
 
Snow birding has its advantages. The warm weather is an obvious benefit. However, snowbirds also get to enjoy a year-round active lifestyle. You don’t have to spend the winter months bundled up indoors. Rather, you can golf, hike, and enjoy any outdoor activity year-round.
 
Think a snowbird retirement is right for you? The good news is it’s a very achievable goal. However, it does require some advance planning. Below are a few tips to help you get started:

Choose an affordable location. 

Depending on where you choose to spend your winters, you could actually save money by spending part of the year in a warmer climate. For example, Florida is rated as one of the most tax-friendly states for retirees because it doesn’t have a state income tax.1 North Carolina is another state that is affordable. The cost-of-living is 5% below the national average and there’s no state tax on Social Security income.2
 
You could also consider spending your winters overseas. There are many other countries that offer enjoyable, affordable lifestyles to retirees. For example, Portugal is one of the safest and most affordable countries in the world. Health care costs are relatively low and, as an expat, you could be exempt from income taxes. If you prefer to stay in the western hemisphere, you could consider Costa Rica, which offers low housing costs, affordable health care, and a warm, tropical climate.3

Rent your property. 

Snow birding is a part-time lifestyle. You live in a warmer climate during the cold winter months but then return to your home state during the spring and summer. If you purchase a home in your snowbird state, how can you offset the costs when you’re not there?
 
One option is to rent the home to tourists and vacationers. This could be an especially lucrative option if you are near a beach or tourist attraction. Consider a property management company that could take some of the burden off your plate. You earn income when you’re not there and then enjoy your property when you want to. You may even make enough in rent to live there for free during the winter.

Downsize your lifestyle. 

Cutting your lifestyle costs is always a wise course of action in retirement, even if you don’t plan on snow birding. The less you spend, the less income you need, which can help you protect your assets to cover a long lifespan.
 
Look at your budget and explore ways to reduce your costs. For example, you could go down to one car instead of two. You could downsize your permanent home. You could take steps to reduce your spending on discretionary items, like travel, dining, and more. All of these actions could fund your winters in a warmer climate.

Minimize your risk. 

Nothing can threaten a retirement like a market downturn. If you’re exposed to too much risk, you could see your assets decline, which could then threaten your retirement income and your ability to enjoy a snowbird lifestyle.
 
Take steps today to protect yourself from risk. For example, you could consider a fixed indexed annuity (FIA), which can offer upside potential without downside risk. That way, you can continue to grow your assets without exposure to market volatility. A financial professional can help you determine if an FIA is right for you.
 
Ready to plan your snowbird retirement? Let’s talk about it. Contact us today at Boston Independence Group. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation.
 
1https://smartasset.com/retirement/florida-retirement-taxes
2https://moneywise.com/a/best-states-for-retirement-in-2019
 
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