The traditional snowbird retirement of splitting time between two homes is giving way to strategic, permanent relocation, as wealthy Americans discover they can lead a better life in a cheaper home state.
Wealth creators who plan a decade or more before retirement can lock in tax advantages, avoid audit complications and build a lifestyle that previous generations could enjoy only seasonally.
The financial logic behind permanent relocation
The tax advantages of relocation are well known. States with little to no income tax, such as Texas and Florida, have become wealth magnets, while states including California and New York are losing billions from outbound migration.
For retirees, the difference in tax rate can have enormous implications for their estate, which is why the U.S. has started seeing such significant shifts in retiree behaviors.
States like Wyoming and Idaho have become the new go-tos for retirees alongside traditional havens including Florida and Texas, owing in large part to their 0% estate tax.
Wealth creators are integrating long-term wealth planning into their financial strategy, and more permanent interstate moves are a large part of that.
Part of the reason permanence is overtaking snowbirding is because of tax and legal scrutiny. As wealthy individuals leave, higher-tax states are ramping up enforcement — clamping down on individuals who still spend a significant amount of time in their home state and use its infrastructure.
California, New York and New Jersey have all introduced regulations targeting residents who claim domicile changes while maintaining significant ties to their former residences. Auditors now examine days spent in-state, property ownership, voter registration and even where family heirlooms are stored. Retirees now need to demonstrate that they've fully relocated their lives — not just their mailing addresses.
It's a hard sell for many families, who have spent their lives building communities and raising families in the areas they're now looking to leave.
Besides, if a wealthy individual can afford to have two or more homes, why not keep a house for ease of convenience?
The issue is cost: Insurance costs and property taxes continue to rise across the country. Climate-driven losses have pushed insurance premiums up by more than 30% since 2020.
Property taxes, meanwhile, have risen 27% since 2019. While wealthy retirees may be able to float those costs while they're alive, it comes at a cost to the legacy and impact they want to leave behind.
If the convenience is worth the added expense, so be it, but with the rise of remote work and video conferencing, many of the traditional reasons for maintaining a footprint in the home state — whether for work or doctor's visits — have been erased.
How to plan for a permanent move
The most successful relocations begin several years before retirement so individuals can maximize timing and optimize liquidity.
Once an individual knows where they want to move — having explored a location in all seasons, researched tax structures, health care access and built some sense of community — the move can be a deliberate transition rather than a rushed financial maneuver.
Timing matters: Even in strong markets, selling a multimillion-dollar home can take longer than expected, and planning lets individuals control the sequence of sales and purchases rather than reacting to deadlines.
It's also crucial for tax purposes: Realizing capital gains can have significant tax implications, so coordinating sales with an income transition can help minimize tax burdens.
Liquidity planning is another overlooked step. Maintaining cash reserves or short-term instruments gives flexibility to fund the move without liquidating investments at the wrong time.
Families who build this flexibility in advance tend to move more smoothly — and preserve long-term portfolio performance.
Why are retirees falling out of love with Florida?
Destinations are diversifying beyond Florida. Arizona added more than 20,000 retirees aged 60+ in 2023, ranking third nationally behind Florida and North Carolina.
Several states offer the same tax advantages Florida once did, without the rising insurance and climate risks now reshaping its market.
Even so, Florida's story is instructive. The heyday of Baby Boomer migration is peaking, and younger generations are making choices based on affordability, climate resilience and a balance of lifestyle rather than tradition.
Its experience underscores a broader truth: Every relocation strategy must evolve with economic and environmental conditions.
The key to successful relocation
Relocation strategies should evolve with changing financial, demographic and environmental conditions.
The core principle is simple: Treat domicile as a strategy, not sentiment. Knowing what you want to leave behind is as important to guiding your strategy as knowing what you want your retirement to look like.
Commit fully when you relocate and plan liquidity early enough to act on your own timeline.
Visit potential destinations, build relationships and evaluate tax, insurance and health care systems as part of one integrated plan.
Seasonal migration is no longer necessary. Retirees can build a long-term lifestyle, but they need to plan now.
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.
