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Just wanted to ask a question about what state might be best for me in retirment?
I know that it's not a one size fits all question and states must get there revenue from somewhere, just the least from me the better :).
My situation is a high unearned income (rental, dividend, Government pension and what little I get from bank interest).
I know states get their income from different sources, but which would make the best sense in my situation, Florida? Nevada? I also plan on buying a house so a low property tax would be great as well.
The current property tax I pay on my rental in California was inherited from my parents so I benefit from the Parent to child exclusion that lets me keep their tax rate, which makes a huge difference since its worth well over a million and only being taxed on around $130,000 so ill probably never sell that place.
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depends where you want to live.


TX and FL and NV and SD and a few others have no income tax.


If you are going to spend more than six months a year in a state,you will be a 'resident' and get socked for any state income taxes.

Some states like TN exempt pensions and maybe even 401K withdrawals but tax things like unearned income - stock portfolios, dividends, bond interest, etc.....

Ya gotta figure out where you want to live.....

If you can be a 'snow bird' and spend less than six months somewhere.....then there are more options....

If you want to be a full time RV'er..or spend less than six months a year in a house anywhere......then become a resident of SD....no income tax,no annual car inspections,.....you only need to show up once every five years to renew your driver's license....


You'll find that in some states....like TX...no income tax, but 8.25% sales tax and higher real estate taxes to make up for the lack of income tax.


t.
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We left Florida 7 years ago for Arkansas. Even with the 9% sales tax and an income tax, we came out far ahead.

Your must realize with Florida, even though there is no income tax, their home insurance is outrageous as are property taxes. If you are unfortunate and buy something i.e the Villages, you will encounter a CDD which is a taxing authority on top of all local real estate taxes.

As the previous telegraph said, it's really about where you want to live. Arkansas give us a real financial break over Florida, and the state has the ability to say " thank goodness for Mississippi" on most things like education etc. But, we wanted a climate that was somewhat agreeable for year round living. Having to leave Fla. for 6 months every year got old fast, RV or not.

Best of luck with your search.
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"Your must realize with Florida, even though there is no income tax, their home insurance is outrageous as are property taxes. If you are unfortunate and buy something i.e the Villages, you will encounter a CDD which is a taxing authority on top of all local real estate taxes."


My parents were FL snowbirds. Had a place in Briny Breezes FL (worth about 40K when we sold it in 1999)......between the intercoastal and the Atlantic.....20 miles south of Ft Lauderdale....nice - for six months a year...then hot and humid for six months. My parents headed to NY state


Yes...taxes were fairly high and they needed flood insurance that was $1500 a year. They had an assessment on their property from Briny Breezes that included real estate taxes but was $2300 a year..but that got you heated swimming pool, rec hall, wood shop, clubs, etc, plus 300 feet of prime Atlantic beachfront to use, plus a 'clubhouse' on the ocean front.....

I decided to sell it...it would have cost me $4500 or more a year to keep it likely...and I wouldn't get more than a few months, if that, use out of it. No reason to 'escape' winters in Dallas...we get six weeks of winter...just don't know ahead of time which of the weeks will be winter weeks (ie, cold, drizzly)...maybe even an inch or two of snow).....

However, my parents retired from NJ/NY area...and my dad had nice pension and NY state was salivating over taxing it...but never could since he spent less than six months a year there....and that is the rule.....but they check up....trying to catch those who only leave for 3 months....to head south....

TX is fine..lots of nice areas..but if you want 'culture' you limit yourselves to where you want to be. You might not be happy in Boondoock, TX or AR if you want to go to the symphony or see Beyonce in concert or a major league football or softball game..or hockey game.....or have art movie theaters......or gourmet restaurants...



t.
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but...but...but....We have the home office of Walmart & Sams Club, along with JB Hunt transportation.

We have Crystal Bridges American Art Museum (a must see if) funded by Alice Walton and the Walton Foundation. We have the Unv. of Arkansas in Fayetteville (never mind the sex scandal from Coach Petrino).Our medical care is terrific with 3 large hospitals and doctors willing to accept Medicare patients.

We also the the Walton Arts center that does host very well known artists.We have good boating and Fishing at Beaver Lake.

It's not a bad place to live, cost of living is quite low, crime is not a big factor, utility costs are very reasonable as many are a co-op. Housing costs are reasonable, some as low as $75sf and some much higher...all the way to $150sf.

Home insurance, earthquake insurance, due to the new Madrid fault, evern though most don't bother to carry it is about $160/yr.

But...YYMV depending on what lifestyle is wanted.
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My situation is a high unearned income (rental, dividend, Government pension and what little I get from bank interest).
I know states get their income from different sources, but which would make the best sense in my situation, Florida? Nevada? I also plan on buying a house so a low property tax would be great as well.


Here's a link to a generic comparative total state/local tax burden comparison among the states: http://taxfoundation.org/article/state-and-local-tax-burdens.... If tax burden is all you care about, Alaska is calling. (Cost of living factors are a problem there.) You might be able to find something more geared to retirees at the AARP site. For example, both Illinois and Pennsylvania have an income tax, but neither taxes any kind of retirement income.

The current property tax I pay on my rental in California was inherited from my parents so I benefit from the Parent to child exclusion that lets me keep their tax rate, which makes a huge difference since its worth well over a million and only being taxed on around $130,000 so ill probably never sell that place.

Small wonder California is broke. I would assume the inherited tax valuation was intended to preserve family homesteads. I can't fathom why they allow the valuation to carry forward when the property is converted to income-producing.

Phil
Rule Your Retirement Home Fool
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If you're really tax-adverse, I'd suggest Washington State close to the Oregon border. Washington has no personal income tax and low property taxes. But it does have a sales tax of 7% to almost 10% depending on what city you live in. Oregon doesn't have a sales tax, so you can do your shopping there.

intercst
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People tell you that some of the best places to retire are the small 100K population college towns. The university brings speakers and activities to town, giving you something to do. Students are usually willing to do part time work if you need anything done.

In Missouri the two we would mention are Columbia and Springfield.

Columbia is not far from Lake of the Ozarks for recreation, decent hospitals and doctors, major airports and big city shopping or museums abt 2 hrs away.

Springfield has easy access to Branson and Lake of the Ozarks (not quite as close (abt 4 hr) to big cities and major airports).

Missouri state income tax is mostly flat 6%, sales tax is local but usually 7+%. Property taxes moderate.
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Oregon doesn't have a sales tax, so you can do your shopping there.

...and then pay your Washington state use tax, which is equal to the sales tax, when you bring the goods back into the state. http://dor.wa.gov/content/findtaxesandrates/usetax/

While these use taxes have been on the books forever there hasn't historically been a lot of enforcement. But in leaner times who knows what avenues they might pursue? On cars they can get you at registration. Some have started tacking it on to their income tax returns.

A bill has passed the Senate which would require online retailers to collect sales tax for all states whether they have a physical presence in the state or not. Its fate in the House is "who knows?" but I suspect that if it fails more states are going to be looking for better ways of enforcing use tax.

Phil
Rule Your Retirement Home Fool
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I'm retired in CA and love it here. I would suggest you move into the home you have in CA, since it has low property taxes.
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Your original post, as I read it, was asking about NV vs. FL and I don't have a clue there.

That said, your post suggested you care about taxes more than most other things and certainly others have been responding in that manner. So I suggest you visit the land of Sara Palin. While the state has high spending per capita, they get those funds from oil extraction taxes and the federal government.

Gordon
Atlanta
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Washington State has zero income tax. Despite the fact that voters regularly elect lopsided majoritie of Democrats, every effort of Democrats to enact an income tax is rejected or repealed by voters.


Seattle Pioneer
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<<Oregon doesn't have a sales tax, so you can do your shopping there.

...and then pay your Washington state use tax, which is equal to the sales tax, when you bring the goods back into the state. http://dor.wa.gov/content/findtaxesandrates/usetax/

While these use taxes have been on the books forever there hasn't historically been a lot of enforcement. But in leaner times who knows what avenues they might pursue? On cars they can get you at registration. Some have started tacking it on to their income tax returns.

>>


Actually, I believe that people living in border areas get an exemption from paying Washington State sales taxes. This was enacted to avoid having sales drain away to Oregon and Idaho.

I'm not familiar with the details of that, though, since I don't live in such a privileged area.

Liberal majorities around Puget Sound regularly vote for a wide avriety of local tax increases, while the rest of the stat is low taxed.

Living any place in Washington State outside of the liberal counties will get you low taxes, and intercst's advice of living just north of the Oregon border has merit.

I like Washougal, Washington, a nice small town on the Columbia River just north of Oregon and east of Vancouver, Wa.


Seattle Pioneer
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SeattlePioneer writes,

Actually, I believe that people living in border areas get an exemption from paying Washington State sales taxes. This was enacted to avoid having sales drain away to Oregon and Idaho.

I'm not familiar with the details of that, though, since I don't live in such a privileged area.

</snip>


I think it's the other way around. If you go to a Wal-Mart in WA State along the border they ask if you're a Washington resident. If you can show proof of Oregon residency (e.g. Oregon driver's license), then they don't charge you sales tax. The idea is that they still want to get Oregon shoppers in WA State who would be deterred by the sales tax.

intercst
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So I suggest you visit the land of Sara Palin.

Alaska also pays something like $800 to each citizen every year for their share of oil royalties.

But most do not live there all year. They winter in places like Hawaii.

Also cost of living is quite high. There is lots of salmon and firewood, but most everything else is shipped in from the lower 48. The land of the midnight sun is also the land of the $10 hamburger.
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Northern Alabama (Madison, Huntsville, Monrovia, Harvest) just across from Tennessee. Weather is nice, like Florida without the humidity. Occasional tornados. Settled by a bunch of German rocket scientists who mysteriously appeared after WWII and got us to the moon, so plenty of educated folks, restaurants, Broadway shows, colleges for continuing ed. Probably 300,000 people in the city and burbs. Low crime. Property taxes run around $500/yr on a $200K house, and $200K will buy a nice 4 bedroom 3 bathroom on half an acre.

Warm weather, low cost of living, low crime, culture, fine dining.
Pollen is bad in the springtime, though.
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Small wonder California is broke. I would assume the inherited tax valuation was intended to preserve family homesteads. I can't fathom why they allow the valuation to carry forward when the property is converted to income-producing.
Thanks for all the replies.
Actually the property is already an income producing property as it is three units. I only moved out of one to be with my new wife in North England the last three years(she is English)as I was retired and she still has a business in Liverpool. That will be getting bought out in the near future as there is a major development going on and her little shop is right in the middle of it.
At some point I would like to move back into one of the units with my wife at least part of the year.
I think that the Parent to Child exclusion could be to prevent the children from having to sell the family property because of the tax burden regardless if they live there or not, which seems to be the case.
The taxes here in UK are pretty oppressive if you earn over a certain amount, and that amount does not seem that high to me. That's to pay for all the social welfare programs. They are starting to tighten that up a bit, as there is a fair amount of abuse.
Taxes are not the most important consideration in buying a home in he USA, but one of them. We enjoy a more rural life style and an area with natural beauty for walks and such is important to us, but still be fairly close to a medium size city for what it offers.
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I thought this was an an interesting analogy as to why "California is broke" :)

http://economy.money.cnn.com/2012/10/10/california-texas-ric...
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I thought I recently read a piece in the NYT asserting that CA is not broke, and in fact doing well financially. Anyway, who wants to live in a state like TX? OTOH, please do retire in TX and leave CA to those of us who appreciate it though taxes are high and earthquakes will surely get you if the taxes don't.

db
Montecito, CA
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Anyway, who wants to live in a state like TX?

Be it ever so humble, there is no place like home.

I think Texans love it. And I don't think many are considered humble.

This all depends on what is important to you.
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I thought I recently read a piece in the NYT asserting that CA is not broke, and in fact doing well financially.

This true. California has a budget surplus.
"The amount is a matter of debate, but by any measure significant: between $1.2 billion, projected by Gov. Jerry Brown, and $4.4 billion,"

more....

http://www.nytimes.com/2013/05/26/us/californias-new-problem...

Mendo
Gualala, CA
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Good to know my property tax valuation is not bankrupting California, but then I remembered all the taxes I have paid to the California Franchise Tax Board.
Actually I just posted that fun Texas story just to make the point that Its not that California isn't getting enough revenue, it's the way it uses it that is the problem.
Actually California is still on my short list, taxes or no, it's where I grew up in the Los Angeles beach area and lived almost all my life, I love it. Looking at Grover Beach and San Luis Obispo as a more laid back alternative to Los Angeles.
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please do retire in TX and leave CA to those of us who appreciate it though taxes are high and earthquakes will surely get you if the taxes don't

If you are speaking to me Mr db notice I put the why California is broke in " " quoting someone else. I do appreciate California.
Like I said ...I love it and miss it.
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Looking at Grover Beach and San Luis Obispo as a more laid back alternative to Los Angeles.

Also less expensive to buy a house. Beautiful area. I'm afraid I like the big city too much to live in The Five Cities (as they like to call themselves.) We stay in Pismo Beach several times a year.

Count No'Count
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I know what you mean Count, but I think for me having a unit vacant in Playa del Rey is good enough for me, when I neen a city "fix". Actually Playa is about as laid back as you can get in Los Angeles.
Now that I think about it I think db was talking in general about the complainers and not personal at me. To me California is all the natural beauty that is there, beaches, mountains, and not the current crop of politicians running it. Earthquakes? Been thru all of them the last half century...no problem, don't even duck under the table.
So I have come to the conclusion not to let the tax tail wag the retirment "dog". California is too much a part of me living there half a century, and no I wouldn't particularly care to live in Texas, no offence, guess I just love California too much.
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<<Also cost of living is quite high. There is lots of salmon and firewood, but most everything else is shipped in from the lower 48. The land of the midnight sun is also the land of the $10 hamburger.
>>


The father of a friend of mine was appointed a Federal judge in Alaska while she was growing up.

She reported that she lusted after expensive cerials and other food imports from the lower 48 when she was a child and turned up her nose at fresh salmon, halibut, crab and other local seafoods and such.
This was back in the 1950s I think.


Seattle Pioneer
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I certainly wasn't directing my comments at you, sonnet. I'm 77, grew up in Venice, moved to the SF peninsula for a post doc at Stanford and stayed, retired at 56 and moved to Montecito, a small town adjacent to Santa Barbara. I've traveled quite a bit, but always want to return to the beach areas of California. We live about a block from a beautiful beach. I've seen many changes as the population of the state has grown.

db
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Thanks for the reply db. You do live in a lovely place, I think Oprah Winfrey lives in that area.
Sonnet
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Indeed she does, but I've only seen her out jogging once. A number of celebrities live in town where they can enjoy a life free of hassle. In my experience, only Jonatan Winters went out of his way to talk with locals. I recall a time when we were both waiting at the local pharmacy. He looked at my watch and commented that I must have done well at one time, then launched into a impromptu diatribe that left me laughing my head off.

db
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It shouldn't be about the money it should be where are you comfortable and where is your network of friends and family.
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State income taxes, where they exist, often depend on type of income as well as rates. For example, NY state doesn't tax SS income or the first $20k of other retirement income (pension, IRA). So we'd be taxed pretty lightly in NY state desoite the fact that it is generally classified as a high-tax state. property taxes would be much higher than we pay in SC, also gasoline tax, but I suspect homeowner insurance would be lower than we pay on the hurricane coast. SC supposedly has progressive taxation, but by the time you make a little over minimum wage, you're in the top bracket so it really is a flat tax for full time workers.
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"what state might be best for me in retirment?"

Some folks lean toward intoxication. But I suggest bliss.

Less problems with hangovers and the costs of being
happy can be much less than the cost of alcohol.

Howie52
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Some folks lean toward intoxication. But I suggest bliss.

Serenity is good too.
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