Moving can be exciting and fun--as well as exhausting, scary and expensive. If you're leaving town for a new job, to join the love of your life or to hook up with old friends and family, emotions are likely to be running high.
So it makes sense to sit down early in the process and soberly review what the move is going to cost. The Financial Planning Association, noting that one in three Americans moves out of county or state each year, offers this checklist:
- Are you moving to a more expensive area? Housing prices are key, but higher costs for food and transportation also can be budget breakers. "The pay from a new job may compensate for any extra cost-of-living, but for someone on limited retirement income, higher costs may be prohibitive," the association says. To find out about the new area, go online and type "relocation" into a search engine. You'll find a lot of sites that compare living costs around the country.
- New York and California have high state-income taxes. Wyoming and Texas have no state income tax. Find out what taxes will be before you move, including sales, property and local taxes. "Some states and counties tax intangible property such as stocks, bonds and other securities," the association says, "something to consider if you have an extensive portfolio."
- Will your spouse be able to find a job in the new community? How will the change affect the family budget?
- If you own a house, will you sell it or rent it out when you move? The decision is easy if you need the money from the house to buy something else. Another factor to consider: if you don't like the new location, will you be able to buy back into the old area?
- Have an attorney check out wills, powers of attorney, living wills and other estate planning documents to make sure they comply with state laws in the new location. "New estate planning strategies, such as trusts, may be in order if you end up owning property in more than one state," the association says.
- Review your insurance policies and find out if your car insurance will rise (New York City) or fall (North Dakota). "See if your homeowner's policy will cover your possessions in transit and if it does, see if its coverage and cost is better or worse than the mover's coverage."
- If you won't get health coverage immediately from a new job, get a temporary policy or see if you can extend your old one.
- Don't cash out your retirement plan. "So often when people move and change jobs, they cash out their retirement plan, using the money to help move, buy a new car or put into a home," the association says. "Even if you're young and it's a small amount, that money could have compounded substantially over time."
