The great (Financial) migration

Snowbirds need to consider financial implications before they take flight

Being a snowbird has become a rite of passage for many Minnesotans as thousands of our great state’s retirees head south for the winter.

In search of warm weather, they travel to sunny climates such as Florida, Arizona, California and Texas.

The reasons for this great migration are many, including a winter of sunshine and a chance to enjoy outdoor activities year-round.

However, along with the decision to split their time between both states, snowbirds need to consider financial and tax implications before they take flight.

Whether you’re a veteran snowbird or considering becoming one, the following ideas can help you experience a more financially sound transition.


Perhaps the biggest question to answer is what to do about housing, and the question needs to be answered on several levels.

  • Will you rent or own your winter home? If you do choose to buy, it may be preferable to rent for at least the first year so you have a better lay of the land. Buying sight unseen or on a rushed weekend isn’t advisable. You may return to Minnesota with a serious case of buyer’s remorse.
  • If you buy, find out if your place falls under a homeowner’s association. If it does, be aware how the HOA costs are calculated and if there are risks of those costs rising based on tenant occupancy.
  • What will you do with the home you leave behind? Is there a friend who can check on your home periodically for any maintenance/security problems and to collect unsolicited fliers left at the door? Will you have someone provide snow-removal services?
  • Will you have your U.S. mail held, picked up by a friend or forwarded to your temporary residence?
  • Should you install a security system that you can monitor remotely?
  • Can you put some of your bills (for either property) on autopay to avoid any accidental late payments?
  • Could you suspend or put on hold services such as cable/Internet, newspaper subscriptions and garbage service to save money?


Will your winter residence become a permanent place to live for part of the year or will you be making mini-migrations within your larger one?

If you do plan to set down roots, have you researched the area where you’ll land?

And, are you aware of the tax implications if you choose to officially live in one state versus another?

These are all factors that can make a difference in your bank account — and your nest egg:

  • Some states don’t impose income taxes.
  • Some states offer more favorable taxes regarding pensions, annuities and retirement accounts.
  • Some states don’t tax Social Security income.
  • When you fund your adventure, will your funds be coming from taxable accounts or tax-deferred accounts such as IRAs?

As with any investment of this magnitude, look for professional advice to guide you through the myriad financial and tax decisions before you take flight.

That way, you can remove that worry while you enjoy your winter haven, and keep living well in retirement.

Skip Johnson is an advisor and partner at Great Waters Financial, a financial-planning firm and insurance agency with locations in Minneapolis, New Hope, Plymouth and White Bear Lake. Johnson appears regularly on FOX 9’s morning news show. Learn more at