If you’ve been reading headlines like this one from nbcnews.com, “Millions of Americans moved during the pandemic — and most aren’t looking back,” or this one from usnews.com, “Study: Americans Moved West, South in 2020,” you might be wondering if you should join the crowd and pack your boxes. So what should you be assessing to determine if a move right now is right for you?
Are you going back to the office?
If you’ve been working from home for the past few months, it might feel like you’ll be able to work from home forever, and your company won’t care where you work. However, as Katie Brennan, a knowledge advisor at the Society for Human Resource Management explains,
“Not all employers will be willing to let employees work out of state because it may mean additional obligations on their part.”
It might also be possible that your employer will want the staff back in the office as soon as it’s safe to gather in groups of ten or more again. Therefore, if your company plans to request that staff come back at some point, you may not want to pack your boxes. So get clear on if/ when your company plans to request that staff returns, and if you will be able to negotiate an interstate working scenario.
What does your life/family need?
If your lack of commute or health situations in your family have caused the needs of your life to change, it might make sense to strike out and find more space, or a different living setup to accommodate new needs. According to a recent Pew Research Study, “Around six-in-ten (61%) of the adults who moved say they relocated to a family member’s home. That included 41% who moved in with their parents or in-laws; 4% who moved in with an adult child or in-law; and 16% who moved in with another relative. For 13% of those who relocated, their destination was a second home or vacation home. An additional 7% moved in with a friend. Some movers relocated to temporary homes, apartments or hotel rooms (7%), while others acquired a new permanent home (9%) by rental or purchase.”
Therefore, if your housing needs or goals have changed because you have a new family member living with you, you’re in good company. You’ll just want to make sure you ask the next two questions before relocating for your dream home.
Do you see yourself moving back to an expensive city?
Laurie Allen, a CFP and founder of r, a financial planning firm in Long Beach, California, says, “The longer that you stay away, the harder it is to come back to an expensive area or a city center.” Meaning, if you see yourself needing or wanting to come back to an expensive city that you’re currently inhabiting, you may want to think twice before you depart.
Do you know if your taxes will be affected?
Are you familiar with the “convenience of the employer” rule? “That rule stipulates that you owe income taxes where your company office is located,” said Jared Walczak, vice president of state projects at the Tax Foundation. “[Your employer’s] state will want to tax you, and your home state may tax you too because you’re living and working there.”
If it feels like your income will go further because housing costs are lower, or the overall cost of living is less, taxes might not take as big of a bite out of your budget. However, it still should factor into your decision making to avoid over-extending yourself. There are times when relocating within your current state is actually the best option.
Once you understand your employer’s plan for calling or not calling everyone back to the office, you’ll know how your future plans might impact your need to return to your current city, and how your taxes/ budget might change with your move. This will enable you to make an informed decision on how or if you decide to join the millions of Americans who have moved over the last year. If you decide to make the move, happy packing!