Job Relocation Tips - How to Financially Evaluate a New City

I’ve been on the job hunt lately and one of the questions employers frequently ask is if I’d be open to relocation.  Here are a few tips from the Financial Planning Association on some things to consider when relocating for a job.

Make sure you thoroughly research the new city well before agreeing to take a job there.  You have to weigh potential salary increases against the cost of living in the new city.  Here are some resources you can use in your research:

• Local newspapers and city magazines, either in print or online
• The destination city’s Web site
• The destination state’s department of revenue and education Web sites
• Online real estate listings 
• Your tax and financial planning professionals
• Utility websites and the American Automobile Association (AAA) daily fuel gauge report to determine your energy spending

Here are some ideas to incorporate into a money plan for a future move:

Study the destination’s cost of living: Most people have a fantasy spot or two in their minds of where they’d like to live.  For most, it’s all about the weather, the culture and creature comforts.  But before you relocate, drill deeper. For starters, onsite or online, it makes sense to study not only rental rates or home prices, but property, local and state tax rates, food and entertainment prices, and given current energy concerns, utility and gasoline prices and whether public transit options are available. And don’t just focus on current numbers – read ahead to see where these costs are going.

Check ahead on insurance: It’s particularly important for self-employed business people to check on what individual and group health insurance may cost in a new destination. But everyone should check on what rental, home, auto and even new life insurance policies may cost. On the home or rental insurance front, it’s also a good idea to see if there are restrictions on any pets or property insurable in that area. If you are changing employers, you should make sure your former employer keeps you on your health plan through COBRA (Consolidated Omnibus Budget Reconciliation Act) so you will have coverage until you move on to new insurance. It’s also a good idea to make sure that insurance will cover you adequately in that new city or state.

Compare benefits:  If you have the option of moving to a new city through a transfer at your employer – or if you expect that to be the only option for keeping your job – it makes sense to do some casual investigation in your human resources department right now to check moving allowances, whether all current benefits will extend to a new location, or whether there are any improvements over your current benefits after the move.

Talk to your tax professional: If you are moving more than 50 miles farther from your former home than your old main job location was from your former home, your move will meet one of the main requirements that will allow you to deduct expenses related to that move. You’ll want to talk to your tax professional about that and other major tax issues you’ll face at your new location, and you may also want to go over deductibility of items you may want to give to charity so you don’t have to move them.

Check critical amenities: It’s important to know the quality of an area’s schools (this is important for all taxpayers, not just those with school-aged children), crime rates in various neighborhoods (and if they’re improving or deteriorating) and the quality of nearby health facilities.  Having access to the best private or public services where you live is always smart money thinking.

Plan your financial services before your move: The financial professionals and services you currently use may or may not be available to you if you move to a new city or state.  If you are working with a longtime tax professional, tax attorney or financial planner, see if you can still work with them after you move.  There might be a host of reasons those relationships may need to end. Various professionals may need to be licensed or certified to serve clients who live in other states or countries. The time to look for a talented referral is now, not on moving day.

Pack smart:  All critical financial data and papers should be organized and ordered so you don’t lose key documents. Carry them with you if that’s possible. At the same time, if you keep financial data on your computer, do a thorough backup that you can keep in a safe place with all your key documents and files.

This post is produced in association with the Financial Planning Association (FPA), the leadership and advocacy organization connecting those who provide, support and benefit from professional financial planning.

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