March 9, 2012 / 1:51 AM / 8 years ago

FEATURE-Americans retire closer to home than in past

(Refiles to clarify headline, add context in paragraph 5)	
    By Mark Miller	
    CHICAGO, March 8 (Reuters) - When Harvey and Cora
Alter decided to move away from Washington, D.C. for their
retirement, friends were surprised to hear where they were
    The Alters weren't even crossing a state line. They would
move just 30 miles (50 km) north of Rockville, Maryland, where
they had raised two daughters, to Frederick -- a town of about
65,000 on the outskirts of the Washington-Baltimore metro area
near the Catoctin Mountains.	
    "People were surprised that we weren't moving to North
Carolina, where one of our daughters lived," Harvey Alter
recalls. "We wanted to be near Washington where all our friends
lived, and we saw no point moving near one daughter and
bothering her -- and not the other in Ohio."	
    Relocation in retirement often brings cross-country or big
north-south moves to mind, but very few seniors actually go very
far. In 2010, just 1.6 percent of retirees between age 55 and 65
moved across state lines, according to an analysis of U.S.
Census Bureau data by Richard Johnson, director of retirement
policy research at The Urban Institute.	
    And even among retirees who do move across state lines,
migration patterns have shifted in recent years, Johnson says.
In 1990, more than one in four retirees between age 55 to 65 who
did relocate across a state line moved to Florida. Seven of the
top 10 cities for migrating retirees were in the sunshine state.
Florida remains the most popular destination, but it only
attracted one in seven of retirees between 2005 and 2010.	
    "Americans are moving to cities all over the country today
when they retire," he says. The most popular destinations now
include Atlanta, Las Vegas, Dallas and Phoenix, but New York,
Washington, D.C., and Chicago also attract many retirees.	
    The Alters made the move from Rockville to Frederick 14
years ago, when they were in their early 60s. They traded in a
single-family home for a townhouse in Worman's Mill, a planned
residential development in Frederick adjacent to the scenic
Monacacy River. It's not an age-restricted retirement community:
"We have school buses coming in, and friends in the community
almost the same ages as our kids. I don't want only to be around
old grouches like me," Alter says.	
    Harvey, 79, and Cora, 75, say they are still happily
ensconced in Frederick, although they recently sold the
townhouse and moved into a condo to eliminate staircases and
outdoor gardening chores.	
    The increasing popularity of the short-distance move may be
a result of the many advantages the strategy offers. Retirees
who stay an hour or two from where they worked and raised their
children can cut their costs while staying near their friends,
cultural events, major airports and medical facilities. Moving
outside the metro area means they don't have to compete on
housing prices with people who need to be closer to the city for
their jobs.	
    Depending on local real estate values, it's a move that can
allow seniors to extract substantial equity from the real estate
portion of their assets. Many bought their homes decades ago at
prices far below even today's depressed market -- and they are
the most likely age group to be mortgage-free: 65 percent of
homeowners over age 65 were mortgage-free in 2009, according to
the Census Bureau.	
    The Alters sold their Rockville home for $245,000 and bought
 the townhouse for $188,000 -- a gain of about $57,000 -- before
retiring a small mortgage. "From the start, the downsize from
Rockville to Frederick was to increase disposable income and
create a more comfortable retirement," Harvey says.	
    The results can be eye-popping when the downshifting
involves a move away from a pricey real estate market, according
to a review of median home prices from Sperling's BestPlaces (,
 a research firm that analyzes U.S. communities.	
    For example, a retiree could sell a home in Montclair, New
Jersey, near New York City, where the median home price is
$560,800 and move 90 miles (145 km) to Allentown, Pennsylvania
(median home price: $135,400) -- pocketing about $425,000 in
extracted equity, assuming a mortgage-free transaction and
excluding closing costs. Likewise, a 40-mile (65 km) move from
Highland Park, Illinois (median home price: $542,000) to nearby
Woodstock ($205,800) would generate around $336,000 in extracted
    Property tax savings could sweeten the deal in some
situations. Sperling points out that the Montclair house would
face property taxes of around $11,300 a year, while the
Allentown home would carry property taxes of only $2,580 -- an
additional savings of almost $9,000 a year.	
    Perhaps best of all, federal tax law lets you keep as much
as $250,000 of the gain tax-free if you're single, and up to
$500,000 for couples. That money can be used any way you like;
the rule applies as long as you've lived in the home you're
selling for at least two of the last five years.	
    The math can work even in the current difficult economy and
real estate market, says Bert Sperling, the company's president.
"Seniors may have to accept a lower price, but they'll be buying
at lower prices, too. And, since many of them have a great deal
of equity in their properties, they have few problems with
credit requirements on the new purchase." 	
    What's more, an improving economy will unleash a great deal
of pent-up demand over the next few years from younger people
who have been forced to hold off on home purchases, Sperling
    The cost of living in exurbia is far lower, too. BestPlaces 
data on prices for housing, food, transportation, utilities and
health care show that it's 19 percent less expensive to live in
Frederick than Rockville. Median home prices are 33 percent
lower, and property taxes are 10 percent lower.	
    During their working years, Harvey Alter worked as a chemist
focusing on hazardous waste issues; Cora, who worked part time,
was trained as a classical professional singer.	
    The two still visit Washington, D.C., a couple of times each
month to meet friends for dinner, and Harvey heads into the city
regularly to meet friends for lunch at the elite Cosmos Club,
where he has been a member for 41 years. As an extra bonus, that
daughter in Ohio wound up moving back to the Washington area.	
    For healthcare, they have their choice of doctors and
excellent medical facilities in Frederick and Baltimore --
although that's the extent of their shift in loyalties away from
Washington. "When we moved, one of our daughters predicted that
we'd wind up taking the Baltimore newspaper, and switch
allegiance from the Redskins to the Ravens," he says.	
    "None of that happened." They may face a longer drive time,
but they're still Washingtonians in their hearts, if not their
 (Editing by Linda Stern, Jilian Mincer and Andrea Evans)
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