When you retire, are you planning to winter in one locale and summer in another? Do you see living your retirement as a “snowbird”? If this is your plan, you’ll want to get a start on it before you officially become a snowbird. Preparing in advance will save you time, taxes, and hassles. As a member of the snowbird community, I can assure you it’s a rewarding experience. But like any activity, the more planning you do, the more success you’ll have.
Here are six areas where planning is the key to the realization of your snowbirding dreams.
1. Decide Where Your Home Really Is
While it’s great to winter in the southern sun and summer in the cool breezes of the north, at some point you need to call one place “home” — if not for your own feelings, then for the benefit of your retirement savings. Important financial ramifications are tied to which location you choose as your primary domicile. Take Florida as an example. If you change your primary residence to Florida, you’ll be able to homestead your house, which saves on local taxes and provides creditor protection. Even more powerful is that compared to many northern states, Florida has no state income tax.
There are more considerations than just taxes. A change in domicile calls for updating your legal documents as well. For example, when you change your state of residence to Florida, you’ll want your last will and testament to follow Florida law and be signed by Florida witnesses.
Establishing your primary residence requires planning. You can’t just say “This is home,” and make it so for legal purposes. And contrary to popular myth, your domicile is not simply established by living at that location for six months and a day. Depending on what state you’re coming from (and how hungry they are for revenue), you prove residency through a combination of factors such as where you vote, where your car is licensed, and, in one famous case, where your dog is registered.
And yes, the actual time you spend there is crucial. Some jet setters use an app on their smartphone that tracks their geographic whereabouts throughout the year as a way to prove residency.
2. Go Digital
Speaking of apps, your snowbirding experience will be greatly enhanced by using digital tools. Rather than being tethered to a mailbox, your records can go where you go.
Obvious examples include electronic banking and online billing. A good snowbirding goal is to have as little correspondence come through the USPS as possible. While the Postal Service has tools that provide for the forwarding of snail mail, the system is less than perfect. You will find that after a period of time, they stop forwarding magazines to your alternative address.
Granted, setting up your online world may take some time at first, but managing your finances via computer and Wi-Fi will be incredibly more convenient than by mail. Other digital devices that can help are security cameras and smart apps for monitoring and maintaining your home away from home.
Parking meters, interstate tolls, gym memberships, even your Starbucks account — many of the day-to-day activities that involve both your homes can be greatly simplified by using smart devices rather than hauling around cards and cash.
3. Focus On Your Insurance
Being a snowbird creates issues that others rarely encounter. Let’s start with property insurance. Homeowner rates vary significantly between residents and part-time occupants, so your “Where’s home?” decision should include insurance costs.
And often the snowbirder is targeting states that have unique geographical hazards, such as hurricanes and wildfires. It is important to sort through primary and secondary residences, identify necessary coverages, and then work out the details with your insurers.
Pro Tip: You can save money by suspending coverage on autos that sit idle at your secondary residence. When you return, just notify your insurer.
And be ready to work with more than one insurance company. Thinking back to Florida, several of the big-name national insurance companies do not offer homeowner insurance to coastal residents. You may well have different home and auto insurers in different locales.
Medicare While Snowbirding
A high-priority insurance issue for many retirees is Medicare. While a Medicare Advantage plan may have served you well when you only lived in one location, snowbirding may necessitate a switch to a traditional Medicare plan with a Medigap supplement.
Because you’re living in two different locations, you’ll likely have different doctors and different health systems to contend with. Traditional Medicare with a supplement plan may cost more in terms of premiums but be cheaper in the long run because of the costs associated with visiting physicians outside your coverage area.
4. Consider Access To Healthcare
Health issues should also be part of your overall planning process. An old adage states “Don’t live where you like to vacation.” While this may be an overstatement, there’s wisdom in the thought. Preretirement vacationers are often seeking to get away from it all. But if you set up residence in a remote location, you may be depriving yourself of needed health services. A secluded island or a cabin in the mountains is a great getaway; but ask yourself if this is where you should be living long term, especially as you age.
5. Make 1 Plus 1 Equal Less Than 2
Snowbirding isn’t cheap, but it doesn’t need to be expensive. You’ll find that at some point you’ll want to have creature comforts at both locations, and not haul your proverbial “stuff” back and forth each trip. By planning ahead, you can avoid doubling the costs of living in two places.
Since snowbirding implies you’ll spend at least part of the year in warm climes, think through your fashion choices. For many retirees, there simply is little need for an extensive wardrobe, particularly winter coats and sweaters, in southern locations.
Pro Tip: Keep in mind that you may need one set of dress clothes in each location for just-in-case situations, such as a wedding or a funeral.
Another way to avoid duplicating costs is to harken back to the earlier suggestion to “go digital.” The more you upload important documents and statements into the cloud, the easier it is to shuttle back and forth without worrying about a forgotten folder or book. This will also save on office furniture and equipment. Have your laptop and a headset, and forego the printer and office caddy. When you need it, there’s often an office supply store nearby that will suffice for your occasional printing.
Use the goal of avoiding duplication as a way to simplify. You may find that in the kitchen of your new place you really don’t need a bread maker, a mandoline (whatever that is!), or a melon ball scoop. Retirement is a way to ease up, and snowbirding can be the catalyst.
6. Have An Entrance And An Exit Plan
Easing into being a snowbird may be the best approach. In my case, my wife and I used Vrbo properties for four winters before we actually invested in a condo. It gave us a chance to know the target community, experiment with shuttling between two locations, and learn the tricks of being snowbirds.
Pro Tip: Haste does indeed make waste. Trying dating your dream location before you’re married to it.
Equally important is looking to the future and a possible exit plan. Retirees may find themselves someday dealing 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 out to the future may lead to better financial decisions today. You may use the snowbird opportunity to downsize your current residence, pay off your conventional mortgage with a reverse mortgage, or even decide to live in age-centric housing such as an active adult community or continuous care retirement center (CCRC).
If you can envision the progress of your retirement, you can create a plan that will get you started on the right path.
Snowbirding is a dream come true for many retirees. Just be sure to distinguish snowbirding from vacationing. Do your research, think the process through, and try it out. If it fits, go for it and attend to the details. Odds are you’ll love it.
For more snowbirding inspiration, consider