FINANCIALLY Speaking in which state should you retire?

KD3PC · Dec 3, 2018

we knew it would be tough, so we moved to TN when we downsized 5 years ago. 25 years in VA, close to the boat and the jobs...and we instantly saved over 25% just in state tax. Now the "sales" tax is 9% but if you lower your spending, came with downsizing for us, you can lived nicely on a fixed income and still save a few bucks towards old age.

dlochner · Dec 3, 2018

jssailem said:
As I step on to the door step of retirement, I am getting barraged with information regarding the costs of the next step. These interesting reports suggests I have chosen poorly, from a tax perspective. What about you? What are your thoughts?

I know this is aimed at the ultra rich... no I have not won the lottery. But I figure, maybe I can learn something from their world. Kind of like the ‘trickle down theory’.
Hoping it tickles down far enough....

The IRS collects around $18 billion in estate taxes annually, according to the agency.

https://www.financial-planning.com/list/retirement-planning-irs-estate-taxes-by-state

https://smartasset.com/financial-advisor/states-where-it-costs-the-most-to-be-rich

John, if you have to worry about estate taxes, you really need a tax attorney and accountant. https://elder-law.com/estate-and-gift-tax-thresholds-set-increase-2018/

It will come as a surprise to some, for our situation, where we live in NY is the best option. Yeah, NY is supposedly a high tax state, but they treat retirees reasonably well. Any government pension, SS, Fed pension, NY state pension is tax free. In addition $20,000 of other retirement income (IRA distributions) is also tax free. Where we live, an older suburb near Syracuse the houses are modest and the property taxes low. If the retiree's income is below ~$86,000 there is a discount on the school taxes. Living expenses are also very modest.

If we were to move to a low tax southern state we might save on taxes but we would be forced to buy property (or rent) that would raise our monthly expenses. We're not willing to do that. Also, our boating expenses are very low. We have a nice dock in a good marina that is very affordable. Our annual expenses for dock, haul out, and winter storage is less than the summer dock fees at Buffalo area marinas.

The downside is the summer season is short and winter is snowy. But if you don't have to go to work the snow is not a big deal.

JRT · Dec 3, 2018

I loved living in New England and I TDY in Washington for awhile too, but I would never ever move back to those areas to retire. Living in Alabama has been a huge positive financial improvement for my family and most likely we will stay in the TN, AL, FL area for the foreseeable future. I have plenty of time so we are sort of watching the gulf coast areas to see what a target area to buy / move to would be down the road. If the dream and plan come together then we would look at a 40+ newer boat on the gulf with a home close by.

Sailm8 · Dec 3, 2018

We moved to Florida 18 years ago. We worked for the first 8 years and are now fully retired. There is no income tax and sales tax is about 7%. Some say property tax is higher but we are paying about the same as up North. We sail a 30 foot boat with a 4 foot draft and can stay out as long as we want. Our whole reason to move here was to sail and we can on Charlotte Harbor. We are very happy and comfortable and I hope to leave this home in a box.

PS it's 82

Rich Stidger · Dec 3, 2018

We have zeroed in on South Carolina from a Massachusetts residence. Although I thought that we would save a pile of money, the reality is that when we move we are likely to stay about even. Property taxes are low, but sale tax can be higher, water costs are higher, and homeowner insurance is 3x higher for a home worth less than our present home. Huge difference on sales tax for cars, boats, and (I think) airplanes. Car sales tax is capped at $500. Utility costs are lower by 50%.
But despite the lack of savings on living expenses, we think we will like the year-round climate better.

Stu Jackson · Dec 3, 2018

You live where you like to go boating.

LeslieTroyer · Dec 3, 2018

I like @Stu Jackson response but the Admiral is hesitant to move away from friends. I tell her she won’t loose the good ones and will make new ones but still digging in the heals. And I’m only talking about 100 miles.

Les

Michael Davis · Dec 3, 2018

Stu Jackson said:
You live where you like to go boating.

markwbird · Dec 3, 2018

Texas. Good weather. Good food. Cheap. Golf courses, coast line.

Rick486 · Dec 3, 2018

I haven't seen anyone hype Wyoming, Idaho, Montana, North Dakota, South Dakota. These are wonderful places to live independently in retirement. No kidding.
Just, like anywhere, rent before you buy.
I also didn't see anyone talking about health care. As we age, good health care becomes much more important.

Rick486 · Dec 3, 2018

jssailem said:
I like Wyoming. Beautiful state really nice people. Only issue. Way far from ocean sailing.

When it is time, we will all carry the anchor inland until we find someone who asks us "...what's that?..."

Gene Neill · Dec 3, 2018

I'm much too young to ponder such things.

Rick486 · Dec 3, 2018

Rick486 said:
When it is time, we will all carry the anchor inland until we find someone who asks us "...what's that?..."

Actually, it's an oar....not an anchor....getting close myself I guess....

Kermit · Dec 3, 2018

Rich Stidger said:
We have zeroed in on South Carolina from a Massachusetts residence. Although I thought that we would save a pile of money, the reality is that when we move we are likely to stay about even. Property taxes are low, but sale tax can be higher, water costs are higher, and homeowner insurance is 3x higher for a home worth less than our present home. Huge difference on sales tax for cars, boats, and (I think) airplanes. Car sales tax is capped at $500. Utility costs are lower by 50%.
But despite the lack of savings on living expenses, we think we will like the year-round climate better.

@Rich Stidger ,
Welcome (in the near future) to South Carolina. I’ve never really lived anywhere else and am proud of our state. We’re not perfect but who is? Where in SC are you looking to settle down?