Is the Snowbird or Sunbird Life for You?

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By Bennett Whitlock, CRPC®, Private Wealth Advisor

Snowbirds are residents of Northern states who flock to the south to escape harsh winters, while sunbirds travel north in droves to get away from summer heat and humidity. If you’re tempted to take flight during the off-season, think through the costs and logistics first.

Keep tabs on your home. You’re right to be concerned about leaving your home vacant for weeks or months at a time. An unoccupied home may be vulnerable to burglaries, broken or frozen water pipes and other events that require immediate attention. To avoid preventable mishaps, ask a trusted family member or hire a house sitter to keep an eye on your property. Sophisticated security systems can also help.

Choose your health insurance accordingly. If you plan to stay for an extended period of time in another state, make your Medicare insurance selections carefully. Many Medicare Advantage (Part C) and prescription drug (Part D) plans require you to stay within their coverage networks, which may not extend across state or even county lines. Medigap (Medicare Supplement) policies that cover some of your out-of-pocket costs under traditional Medicare (Parts A and B) may be used nationwide, provided the
treatment and provider are eligible. If you require prescription drugs, you’ll want to make sure your plan allows you to fill prescriptions at its network pharmacies anywhere in the country. Failing to do so could mean exorbitant out-of-pocket medical
expenses that are not eligible for reimbursement.

Make arrangements to receive mail. You may think your mail can wait for your return, but what about your bills and other important documents? Consider using automatic bill pay and mail forwarding services to stay on top of financial obligations. Also, let the professionals you work with (e.g., lawyer, estate planner, financial advisor) know of your address change in case they need to get in touch with you.

Explore living options. Unless family or friends are opening their homes to you, you’ll want to weigh the cost of maintaining two residences. Renting a second home or condo may offer a more affordable approach than buying. Many vacation properties are available to rent on a weekly or monthly basis. You may also want to explore home exchange networks that allow you to swap residences. If you plan to stay at hotels or pursue other lodging options, research the cost with the amenities you desire.

Create a budget. Do you see your temporary move as a vacation, living your everyday routine in a new location, or a bit of both? Depending on how you plan to spend your time away from home, make sure you budget accordingly. It can be easy to spend on a whim with the intention of getting back on track once you return. Make a commitment to maintaining your financial diligence by adding any travel, fun experiences or increased living expenses to your budget.

Check in with your tax advisor. The residency tax statutes can vary by state, so check the rules for each state you live or own property in to avoid tax surprises. Your tax advisor can provide suggestions for keeping your tax obligations to a minimum when you’re residing in more than one place during the year.

Bennett Whitlock, CRPC ®, is a private wealth advisor and managing director with Whitlock Wealth Management, a franchise of Ameriprise Financial Services, Inc. Learn more at WhitlockWealth.com or call 703-492-7732.

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