Want to know one of the best single investments you can make?

Move.

Don't move just anywhere. Move to an area that costs less than where you are currently living. For millions of people soon to retiree, a good move will make up for any shortfall in investments or pensions. Indeed, for couples with pre-retirement incomes of $60,000 or more, a good move can be more important than Social Security.

Why? Because a good move can reduce your cost of living by as much or more than many people will get from Social Security.

According to a study by the Alexander and Alexander Consulting Group, for instance, Social Security will replace about 31 percent of pre-retirement income for a $60,000 a year household. The replacement amount declines down to 21 percent for a $90,000 a year household. A move that cuts your cost of living by 21 to 31 percent, then, would be as important as Social Security.

Moving when you retire is not a new idea. People have moved from the Northeast to Florida for decades. Arizona, New Mexico, and South Texas are filled every winter with "snow birds" who migrate from North to South every year and thousands who stay, witness the success of Del Webb's Sun Cities.

Getting information about making such a move, however, is a lot easier than it once was. Particularly when you are looking for comparisons of the cost of living. To illustrate the power of moving I went to the Homefair site on the World Wide Web. Homefair is a service provided by the National Center for Mobility Resources, a relocation service firm that helps with information on the cost of moving, home mortgages, and finding new housing. The service asks you to provide an income level, name the state you are moving from, the state you are moving to, and then lets you choose cities in both states to compare the cost of living.

I examined three different moves from relatively high cost of living areas to popular lower cost of living areas: a move from Long Island, New York to various spots in Florida; a move from Boston, Massachusetts to various locations in Arizona; and a move from San Jose, California to different locations in New Mexico.

The broad finding?

Knocking 20 percent off your cost of living is a lead pipe cinch. Reducing it by as much 25 percent is very easily accomplished. And you can stretch it down to a reduction of more than 40 percent. As I said, what we've got here is a single decision, late in life, that can be as important as a lifetime of Social Security payments.

Here are some examples, all based on a pre-move income of $60,000:

Long Island, New York to Florida. Like most states, Florida has some very expensive areas. You can't expect to save much by moving to Boca Raton ($57,375), Fort Lauderdale ($55,677) or West Palm Beach ( $53,165). But you can get a cost of living reduction of about 20 percent by moving to Pensacola ( $50,083), Sarasota ($48,700), Orlando ( $47,562), Lakeland ( $46,169), or Cape Coral ( $45,096).

Boston, Massachusetts to Arizona. This is a move that works very easily. Even moving to upscale Sedona or Scottsdale the cost of living would decline to $49,179 and $47,449, respectively. A move to Phoenix would take costs down still further, to $46,578, while you could save still more with a move to Flagstaff ($45,832), Tucson ($39,119), or Green Valley ($38,856). Then again, you could really go for it and move to Yuma ($35,635) for a saving of 40 percent.

San Jose, California to New Mexico. Wonders of technology notwithstanding, life in San Jose has become unpleasant and expensive for many. Like the San Francisco area, San Jose now has a rental vacancy rate of one percent. As a result, you can save a bundle even if you move to a place as chic as Sante Fe ( $48,558) where you need lots of green money to keep yourself in green chili stew. Small wonder that Intel is building a vast production facility between Albuquerque ($44,663) and Sante Fe. If you go any distance from those two centers, however, the cost of living plummets: Las Cruces ( $37,276), Roswell ($35,883), Carlsbad ( $35,164). Then again, having driven through Clovis ($35,835) many times, the best I can say is that it might be an acquired taste.

Now lets check the alternatives. Suppose you have a simple choice: a carefully planed re-potting as you retire… Or find a way to accumulate additional nest egg cash of $300,000 to provide you with a needed $15,000 a year.

You can do the first on your own.

The other option depends not only on your savings but politics, the economy, money managers, and any number of other things totally beyond our control.

Tuesday: Moves from Dallas, within Texas


File Name: 961027SUDallas Morning News file date: 10/27/96---SUNUniversal Press Syndicate file date: same

 © Dallas Morning News, Universal Press Syndicate, 1996