If you plan to buy another home or build a new one, families are usually given the guideline that the purchase price of a home should be no more than three times their annual income. And wherever you decide to live when you retire, your housing costs will probably consume at least 30 percent of your expenses. Even though most mortgages have been paid off by retirement age, taxes and upkeep will increase. Studies have shown that households made up of individuals over 65 will decrease expenditures in nearly every other area by a larger percentage than they will on housing. Only you can decide how much you should spend on housing, and then make every effort to stay within that amount.

Are you concerned about housing costs now? Will they be a concern when you retire? If so, the Estimating Your Retirement Housing Costs worksheet may help you compare housing costs in your present location and two other potential locations. The best place to start is to study the housing costs where you live now. If you don't have an exact record, make an estimate. It will probably be fairly accurate and will be a base for figuring housing costs after you become older.

The Taxes in Retirement worksheet will help you compare taxation rates of other locations to your current location.