Housing selection crucial for retirees.

• Position: Your Life

Choosing a suitable place to live during retirement not only has important lifestyle and health ramifications, it can result in a significant financial cost at a time when people commonly assume that their housing expenses will be declining, points out the Financial Planning Association, Denver, Colo. Here are some of the housing options to consider, preferably well before you actually retire.

The majority of people remain in their own homes when they retire--at least until they may be forced to move to an assisted living facility or a nursing home due to declining health. Many retirees and near retirees should be thinking about modifying their current home to be "age friendly" as they grow older so they can stay longer, even as their health begins to fail. For example, if you decide to remodel your bathroom, consider installing a walk-in shower with a seat or room enough to roll in a wheelchair. Widen doorways, add handrails, put in a stairway chairlift, or move the master bedroom and laundry facilities to the main floor. Leave the upstairs bedrooms for the children and guests when they visit. Also factor in the likelihood that at some point, only one of you--typically the wife--will be living in the home.

Roughly one in five individuals move when they retire, and according to an Allstate and Harris Interactive "Retirement Reality Check" survey, four in 10 baby boomers plan to do the same. In many cases, retirees are downsizing but upgrading at the same time, which is one reason it pays to think about housing beforehand. You may want to set aside extra money to pay for improved housing as well as the cost of a move and related expenses, so you're not taking that money out of your nest egg once you retire.

Of course, if you move, you'll want to either build or buy a home that has numerous age-friendly features. Where you move will have a significant financial impact and should be thought out carefully. There are the usual retirement communities, but many people are choosing more independent locations such as college towns or even overseas.

If planning to move out of town, try to "test-run" the location you're thinking about. Rent for...