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Retirement Planning Outside the Box: Move Out of the Suburbs

Here's the latest installment in my occasional series on creative retirement planning ideas. This idea germinated from a retirement planning workshop I gave a few weeks ago when we were discussing how to manage living expenses during your retirement years.

This particular idea addresses a situation that happens all too often: You and your spouse buy a house in the suburbs where you start and raise your family. Then the kids grow up and move away, and when you retire, you find yourself still living there, in a house that no longer fits your family or your needs.

There can be any number of good reasons for this: The house is familiar and comfortable, you don't have to experience the hassle of moving, and it's a memorable gathering place for family reunions. Sound familiar? That's exactly what my parents did -- probably a lot of yours, too. To this day, my 89 year-old mother is still living in the house where I grew up, and our extended family recently gathered there for a Labor Day barbecue.

This can work out just fine in the early years of your retirement -- say through your seventies -- but eventually problems set in. You find you have to drive everywhere to get your errands done, maintenance on the house can eventually get overwhelming, and you don't need as much space as you previously did when raising your family. Wait long enough, and eventually you don't have the energy or wherewithal to move -- and that's where you might get stuck.

The answer? Move out -- while you still can. Here's what I'd look for:

  • A smaller place with reduced bills for utilities, insurance, property taxes, and ongoing maintenance
  • The ability to walk, bike, or take public transportation to most, if not all, of your regular activities. This would include shopping, errands, medical needs, hobbies, and entertainment.
  • A location that makes it easy for you to get out and exercise, and includes nearby walking or bike paths
  • Close-by group social activities, such as church, community centers, theaters, and adult education schools
Proximity to family and friends is also a critical requirement in your quest for a new home. So where should you begin your search? Here are a few ideas:
  • Investigate town homes, condominiums, or apartments, where somebody else is responsible for maintenance and repairs.
  • Look into a big city where you're more likely to gain the advantages mentioned above.
  • Consider moving into the center of the town closest to you -- this way, you'll still be close to people who are important to you.
According to the Frugal Senior website, which analyzes and summarizes statistics from the U.S. Bureau of Labor Statistics, housing and transportation are the top two categories of living expenses for seniors. Move to a smaller house in an area that offers conveniently located amenities, and you've just reduced a major chunk of your living expenses in retirement.

Let's take this idea one step further. Could you possibly do without owning a car? Think about it: You could save thousands each year on insurance, maintenance, and car payments if you'd be willing to give up your wheels. To make this work, though, you'd need to have convenient public transportation. For those times when you really need a car, a near-by Zipcar site or a car rental agency that has a pickup and delivery service is a must. For an interesting book that explores this concept in detail, read How To Live Well Without Owning a Car: Save Money, Breathe Easier, and Get More Mileage Out of Life. The author, Chris Balish, lives in Los Angeles; if he can make it work there, it's certainly worth considering

The goals of downsizing your housing are important: Save money, improve your physical health, and increase your social interactions, which are so important in your later years. As with other "outside the box" retirement planning ideas, this one may not work for everybody. There are definitely good reasons to stay in your family home, as I noted above. However, this idea might stimulate your thinking, and by talking with your friends and family about it, other ideas might bubble up. And you might still be able to incorporate some aspects of the idea into your own planning.

Given the challenges we all face in our retirement years, we need all the ideas we can get. "Move out of the suburbs" is just one recipe among many for prosperity in retirement.

More on CBS MoneyWatch
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