Smart Decisions for Snowbirds

Create the freedom to follow your life wherever it leads.

With nearly half of our client base already living the snowbird lifestyle, before and after retirement, we know there is a lot more to consider than where to buy a new home.  If we were to list all the smart decisions for snowbirds for someone considering having multiple residences in multiple states, it would make your head spin, and you might reconsider.  That’s not our goal. We do, however, want to help clients think through their decision to live across states through multiple lenses.  We will do a lot of the heavy lifting for you and allow you to make the smart decisions for snowbirds.  Let us help you be more confident that you are making a sound financial and life decision when considering the snowbird lifestyle.

Note: The snowbird lifestyle is no longer only for retired people.  With more and more people working from home, they can do their work virtually anywhere, including across the country. That means single people, couples, and people in their 20’s, 30’s, and 40’s, are choosing to live a more mobile lifestyle with homes (including mobile homes, apartments, condos, etc.) in multiple locations.

Key Considerations

Location, Location, Location – We say it three times because location is a critical decision point. Of course, for all the reasons you’d expect – convenience, view and surrounding, distance to friends, family, and fun, etc. But there are other things to consider when you select a location – and though not quite as fun, they require careful consideration.  Things like access to quality medical care, tax planning and residency requirements, and estate planning.  More on these topics shortly.

Cost – How much can you afford? What’s the best way to finance? Should you buy or should you rent? Do you plan to rent out your home via VRBO, Airbnb, etc.? Can you afford to maintain multiple homes over the long haul?  How will you move between the two homes (travel costs)? There is no end to the financial considerations that should go into this decision. Carefully reviewing the current state of your financial affairs against future goals and factoring in the impact of a second (or third home), is a vital part of our analysis.

Insurance – We hate to say it, but there is a good deal of risk management to be done when purchasing a second home. You may have noticed that natural disasters have become the norm in many states (i.e., hurricanes, tornadoes, and wildfires). There are also domestic disasters which can occur, even when you are not in residence, such as leaky pipes, power outages, and electric / internet issues.  Homeowner’s insurance for a secondary home can have different terms than your primary home’s insurance policy.

Depending on your financial situation and occupation, you may also want to carefully consider how your second home is titled from a liability perspective.  And speaking of liability, an umbrella insurance policy is probably a good idea.  It provides coverage beyond the limits of your other insurance policies, or for claims that may not be covered by liability policies.

Healthcare – The goal isn’t to think about just the care you need today, but instead to think about what your future healthcare needs may entail. Are you close to a hospital with high-quality doctors? Does your medical insurance (today and in the future) allow for the same level of care at the same cost in both locations?

Legacy – Have you thought through and discussed with your family what will happen to your home(s) in the future? We have more than a few clients who buy a second home “for the family” and later find out the family isn’t interested in managing the home over the long haul. What happens if there is a divorce? Have you carefully planned for how your real estate will be handled in a situation such as separation or divorce?  These are all key considerations BEFORE you purchase a second home.

Taxes – Taxes are complicated when you have multiple homes, even more so if you own your own business or are still working. Which state will hold your permanent residency? What are the rules and restrictions associated with residency?

Intangibles – Multiple homes can lead to double the fun, but also should cause pause for careful consideration. How will you manage family pets? Will you have personal vehicles at both locations (and what’s the cost of that? The most important intangible thing to consider is time.  Time to enjoy a second home, time to plan trips back and forth, time to manage your homes throughout the seasons, time to deal with unexpected problems, and more.

When’s the Right Time to Start Planning for the Snowbird Lifestyle?

It is never too early to start planning for the snowbird lifestyle.  The sooner we can add this goal to your financial plan and begin working strategies, the better.  That said, at least two to three years in advance would be the latest you’d want to begin your snowbird planning.

 What is Snowbird Planning and How Do We Do It?

  1. Lifestyle Questionnaire – The process begins with a Lifestyle Questionnaire. The Questionnaire may be something that you work through with a partner or that you do separately to compare your answers.  You may even want to include family members who will be impacted down the line.  The Lifestyle Questionnaire will help you and our financial planning team gain a better understanding of your vision.  We will collectively create your vision statement and pin that for later as we step back and look at where you are today.
  2. Current State Analysis – To figure out how best to help you attain your vision for the future, we do need to step back and see where you are today. We will take a deep dive into your assets, liabilities, insurance, spending, employment and career plans, and lifestyle needs. We will then present back our summary findings and discuss what you have working towards your vision and potential blind spots or gaps.
  3. The Plan – Designing a Plan that will enable your success is our goal. Sometimes your vision and your current state make for a very direct pathway to success. Sometimes we need to make trade-offs in the planning process.  Our job is to be creative and thoughtful in how to best help you attain your vision. We will meet with you after a draft Plan is completed to dive into the details and support you in making decisions. Once the Plan is “complete,” we implement the steps necessary to make your dream a reality.
  4. Let’s Go – Smart Decisions for Snowbirds may include any or all of the following:

a) Portfolio changes – Putting your money to work for you in alignment with the Plan. Weighing when you will need money available with your risk tolerance and growth needs will help drive the changes we make, if any.

b) Tax planning – Discussing potential changes (income, sales, and estate tax rates) to your tax situation and residency status and how this factors into your plan.

c) Estate planning – Reviewing estate planning considerations, including beneficiaries, maintenance of the home, etc. and establishing which documents you will need to manage your assets, including powers of attorney and if it makes sense to have a different entity own your home (i.e., an LLC). The goal is to structure your estate and title your assets to minimize taxes and heartache for your heirs.

d) Cashflow planning / Budgeting – Reviewing your overall budget and cash flow considerations when factoring in the cost of maintaining and moving between two residences.

e) Insurance planning – Discussing insurance planning and factors to consider including the types of insurance you may need, how to manage risk associated with a second home, protection of your dependents, etc.


*Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Stephens Consulting, LLC, doing business as Stephens Wealth Management Group (SWMG), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.

Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Stephens Consulting. Please remember that if you are a SWMG client, it remains your responsibility to advise us, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to your individual situation, you are encouraged to consult with the professional advisor of your choosing.

SWMG is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. A copy of SWMG’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request. Links are being provided for information purposes only. SWMG is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors. SWMG is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. Important Disclosure.

Please Note: Stephens Wealth Management Group does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to SWMG’s website or newsletter or incorporated herein and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

Browse by Category