Australian retirees are leaving the big smoke in droves, for the never-ending sunshine of a beach somewhere, perhaps the scene of happy family holidays when the kids were young.

But there's only so much fishing, golf or quilting a person can do. Without careful planning to select the right retirement location and lifestyle, and realistic financial planning, many a dream retirement fades in the sun.

Three years ago Don and Maureen (not their real names) sold their Sydney harbourside home and retired to Port Stephens, north of Newcastle. Six months later they were in the Epping RetireInvest office of Simon Hanley.

The husband had developed a severe ongoing illness and wasn't happy with his medical treatment at the local hospital. On a more mundane level, they had to go to Newcastle to get their car serviced and they found the usual conversation at the golf club was limited and boring.

"They said this is hopeless, can we buy a city apartment?" says Hanley. "I said they were crazy because it wouldn't produce income. Why not stay in a motel? Even at $100 a night, they would be lucky to spend $5000 a year, or 50 nights, on it."

Hanley advises clients who are thinking of retiring to a coastal town to test drive the location in a low-key way, by renting during the winter months to see if the lifestyle and facilities suit them.

Owen Weeks, co-author of Where to Retire in Australia (Lifestyle Info Services, $39.90) with his wife Jill, agrees.

A former financial planner, Weeks left his practice in 1998 to specialise in seminars and publications on retirement issues. He and Jill then set off on a 12-month fact-finding tour around Australia to find the best retirement locations.

The Weeks used a checklist (see separate box) to uncover the most desirable retirement locations in each state, researching statistics and conducting local interviews on everything from weather patterns to transport, housing, medical facilities, crime, employment opportunities, cost of living, adult education and sporting and cultural activities.

Six locations in NSW made the grade: Bowral, Merimbula, Nelson Bay, Port Macquarie, Ballina and the Tweed Valley, which covers the area running inland from Tweed Heads just south of the Queensland border.

Weeks also has a soft spot for Bellingen, 30 minutes inland from Coffs Harbour on the NSW Mid North Coast, but didn't include it in the book in case an influx of new residents destroyed its charm.

Weeks says the biggest financial risk involved in moving to a dream location is making a mistake and having to move again. Stamp duty, legal fees, removal costs and new furnishings can easily add $20,000 to $30,000 every time you move, he says.

People who up stakes from Sydney and Melbourne, with their high property prices, may find they can't afford to buy back in again a few years down the track.

Weeks mentions one Melbourne couple who moved to the tropical playground of Port Douglas in north Queensland. Before long, the heat drove them south to Port Macquarie, on the Mid-North Coast, which they also eventually abandoned because it didn't have four distinct seasons. They finally settled at Merimbula on the South Coast, considerably poorer but much wiser.

In fact, weather is an extremely important consideration, especially for keen outdoors types or gardeners. Like the couple of keen gardeners who moved to Phillip Island in Victoria where rabbits and birds ate everything they grew. Lifestyle preferences are very individual, so what may seem trifling to some people can ruin a place for others.

Weeks also suggests checking those things that make everyday life run smoothly. For example, will your mobile phone work? Is there an Internet connection, preferably broadband, which is increasingly important for distance education and home-based businesses? And how far will you have to go to get your car serviced?

It's often the little things that corrode people's enjoyment of a retirement spot. As well as thoroughly researching potential locations and spending time there before making a final decision, Weeks advises people to talk to an accountant or financial planner before they do anything to check their financial plan.

Apart from housing and removals costs, there are potential taxation, social security and estate planning issues. Everyone's financial circumstances are different, which is why it is advisable to seek professional advice about the financial implications of lifestyle changes.For example, Hanley says, a Sydney couple might sell their home for $800,000 and buy something fabulous on the coast for half that amount. The $400,000 left over could become an assessable asset and prevent the couple receiving an aged pension.

If the same couple were to invest the $400,000 in a lifetime annuity it would not be an assessable asset for social security purposes but the funds would no longer be available to leave to the kids as part of their inheritance.

Hanley also warns that people who dream of running a small vineyard or some other agricultural enterprise need to be aware that anything over two hectares will count as an asset, unlike a family home on less than two hectares, which is exempt.

Weeks recommends people move no more than 200km from their old location so they can remain within easy reach of their old friends, family and social networks.

Unlike Hanley, Weeks believes that if you can afford to keep a city apartment and a country house, you can enjoy the best of both worlds, provided you choose properties with good security because they may be unoccupied for long periods.

Take-off checklist

Recreation and culture: City slickers may be disappointed by the cultural and sporting activities outside the major capital cities. Most town councils can provide a new residents' kit with listings for community services, clubs and special interest groups.

Real estate: Look for a plentiful supply of affordable housing. Give some thought to the resale value of property, in case things don't work as you planned. Consider renting for 12 months to test drive your new location.

Medical care: Is there a local hospital, ambulance service and adequate numbers of doctors and dentists?

When the grandkids visit: Accessibility by road, passenger rail or a good local airport, and local attractions may influence the number of visitors you receive.

Weather: Some people like four distinct seasons while others like it hot. Check the Bureau of Meteorology and spend time in a place before you settle.

Cost of living: Prices are cheaper if there is a local supermarket. Some tourist towns increase their prices during high season.

Security: Talk to the local police about crime levels, crime hot spots and Neighbourhood Watch schemes.

Starting a small business: If you want to start a small business or transfer an existing one, make sure it will be viable in your new location. Local real estate agents offer local businesses for sale.

Getting smart: Check for adult education networks, access to university or TAFE courses and good Internet connections for online study.

Community issues: Subscribe to the local newspaper for a year before you move to monitor local issues and community concerns.

Source: Where to Retire in Australia by Jill and Owen Weeks (Lifestyle Info Services, $39.90)

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