5 Keys to Making Smart Retirement Decisions

Where do you want to live once you stop working? Here are some things to consider.

By: Mary Yarrison

In the late 1990s, when Jo Merrill and her husband, David, decided they could retire in 2006, they knew that a lot of planning lay ahead. Fortunately, they’re good at that, which is how they were able to stop working at age 57 in the first place.

Jo had worked at the March of Dimes as director of public policy and government affairs, and David had been a government lawyer at the US Commodity Futures Trading Commission. They’d lived in Northern Virginia—first in Alexandria, then Springfield, and later in McLean—since 1973. They’d raised two daughters, who’d gone to Alexandria’s Thomas Jefferson High. With their nest now empty, the Merrills were ready to get out of town.

A few goals were nonnegotiable: They wanted someplace warm, near the water, and on the Atlantic coast. “We’re East Coast people,” Jo says.

They were looking for activities—David is a golfer, and Jo wanted to get back into tennis. They planned to travel, so they wanted to be within an hour of an airport in a neighborhood where their home would be protected while they were away. They thought it would be nice to live near a college in case they felt like taking classes or attending lectures. They preferred being close to a hospital. And they wanted a sense of community because they were leaving friends behind.

The Merrills settled on Seabrook Island near Charleston, South Carolina. Jo says it’s the perfect community for them. She credits their thorough research as the reason they found just the right spot.

Such planning isn’t uncommon. “A lot of the legwork has usually been done by the time you get to a realtor,” says Paula Nerret, a Long & Foster agent who sells homes in the biggest active retirement community in Washington, Silver Spring’s Leisure World. “By the time people get to us, they’re ready to buy.”

So what questions should those approaching retirement be asking in order to find the best fit for their future?

Do I Want to Stay in Washington?

More often than not, people move here for careers—Washington isn’t exactly the leisure capital of the country. So when work is no longer a factor, it may make sense to look beyond this region.

If you do want to stay, Nerret says, your options for active retirement living will be limited. Continuing-care facilities that cater to older residents are more common than the expansive, amenity-heavy communities for new retirees that are popular in warmer parts of the country such as Florida, the Carolinas, and Arizona. Nerret points to the high cost of land and strict zoning laws as two possible explanations. She says the two Leisure World properties (the other is in Loudoun County’s Lansdowne) are the best options locally for active retirees.

Do I Need a Different Size House?

For some couples, a smaller house makes sense after retirement. “Many people want less maintenance,” Nerret says. “They don’t want to worry about taking care of a yard or extra rooms they don’t use often. Those people would be looking for condos.” Downsizing is particularly popular among people who are retiring near their adult children and who don’t need sleeping rooms for visitors or play space for grandkids. But downsizing isn’t always the goal.

The Merrills went a different route. “Our house here is the same size as the McLean house,” Jo says. “People always talk about downsizing, but we’ve found that since we’re in the house so much more than we were when we were working, it’s important to have space and not be living on top of each other.”

It’s also not unheard of for couples with grandchildren to buy larger homes with enough space for everyone to visit, although many communities allow visitors to rent houses if residents don’t have the space.

Do I Want to Be Really Active?

The quantity and range of activities offered in planned retirement communities—often restricted to those age 55 and older—vary. Some of these communities have the feel of quiet retreats, while others are more like summer camps, with organized sports, new-resident gatherings, and outings that make for a full calendar. It’s important to decide whether you’d rather relax with a book at home or meet your neighbors in the clubhouse for Ping-Pong or golf.

Community staff can speak to the types of activities offered and the energy level of the place, but there’s no better way to figure out whether it’s a fit than to visit. When Jo Merrill and her husband were weighing options, they often took advantage of visit-for-a-weekend promotions that kept their research from getting too pricey. Spending time at the community pool or on the golf course can provide chances to talk with residents. Merrill says that when she and her husband were looking, he played golf every day—getting paired with residents—and she and their kids walked on the beach and stopped to talk to locals, to determine whether they’d be comfortable there.

What Can I Afford?

Buying a home in an active retirement community is much like buying any other home, Nerret says. But in one regard, these communities are atypical: The amenities they offer—gyms, libraries, clubrooms, sports—aren’t free. Often, association fees are required even for residents who don’t use the facilities. As you look at house prices, be sure to factor in the community fees, which can come to thousands of dollars a year.

Also, consider how your retirement expenses will be different from when you were employed. Will you be cooking more and eating out less? Will you drive less, travel more, spend more on tickets to the theater and less on clothing?

Says Jo Merrill: “We spend a lot more on entertainment and travel now than we did when we were working, which it never occurred to us to think about.”

Will I Age Out of This Community?

While things such as continuing care and shuttles to the grocery store might not be at the top of a new retiree’s mind, a time may come when those things matter. Some communities offer services to assist residents as they age; others don’t.

“A realtor who works in the community should be able to speak to the availability of care,” Nerret says. “There are a lot of places in this area that offer it, but they’re not usually the same places that have golf courses and things like that.”

That may mean that your retirement home won’t be your home forever, so the resale value of your house and the ease with which you can move, if you need to, are other considerations.

This article appears in the March 2013 issue of The Washingtonian.