What state is the cheapest place to retire at?

[SkyPup]

Florida has an Intangible State Tax on all stock, bonds, and recieveables but the tax has been decreasing over the last five years now. Five years ago it was 4% of assests ($4,000 per million of assets), this year (2005) it is only 0.5%. /forums/images/graemlins/grin.gif

 

[Tom_H]

Washington has no income tax and Oregon no sales tax, so if you lived in Washington, but right on the Oregon state line at some location with a bridge across the Columbia, you could go across the river to do all your major shopping. That way, no state income tax and little sales tax.

Alaska not only has no income or sales tax, but they (or at least they used to-don't know if this is still true) give/gave dividends from the oil royalties to all state citizens. Long, cold, dark winters and high cost of living are negatives to many, while the beauty and solitude attract others.

Puerto Rico is a U.S. territory. The people are U.S. citizens, are included in Social Security, Medicare, etc. and are protected by U.S. military. Since they have never decided to petition for statehood, they don't get to vote in national elections and also only get to send non-voting representatives to Congress. They also pay NO FEDERAL INCOME TAX.

Other things to think about are the comfort of the climate, whether or not you like the landscape (folks like different things: mountains, flatlands, desert, shoreline, etc.), cost of real estate, cost of utilities and how much utility energy is necessary in the climate, cost of consumer products, level of local property tax, proximity to entertainment (or perhaps, remoteness FROM such activity), and proximity to emergency services and medical care (these may matter more to someone in his/her later years).

One last thing to think of is whether the locals share your values and will accept you. You're more likely to be accepted in the south if you're Southern Baptist and more likely to be accepted in Utah if you're Mormon. Some say that Caucasians can have a difficult time being accepted as permanent residents in Hawaii.

 

[Chuck52]

Puerto Rican residents may not pay federal income tax, but their "state" income tax rate is pretty high. I lived there for four years, and it seemed to me that my tax rate was about equivalent to what I had paid in federal taxes. Part of that is because tax cheating there is a way of life, so anyone on a regular salary gets soaked.

On the other hand, it may be that they either don't tax, or have a low rate for retirement benefits. It is necessary to look at specifics about a place before making a retirement decision.

As to Tennessee, I always wanted to retire back home to East Tennessee, but my relatives there have been complaining lately about dramatic increases in elictric rates and such. Seems TVA is trying to make up for their earlier low cost power.

Chuck

 

[Tom_H]

Good points, and well taken.

 

[KentT]

IMO, read one of the "places rated" evaluations -- it's overly simplistic to try basing the decision on just one form of taxation. There's simply too many variables, even among taxes: such as property taxes, personal property taxes, automotive excise or registration taxes, state taxes on gasoline, electricity or other energy source, etc.

Then, you have to factor in the cost of housing, cost of food, cost of heating/cooling, water/sewer, etc. Housing costs vary greatly from one area to another, even within a state as discussed earlier. Housing costs alone are often up to a 1/3 or the typical family's "bills"...

IMO, moving around the country in the military for almost 30 years, the only major expense that doesn't vary a WHOLE lot is the cost of food -- unless you're in Alaska or Hawaii where much of it is imported. There certainly is some variation, but much less than the other major expenses. Housing costs and taxes have HUGE swings...

Also, don't overlook the impact of climate on the equation, due to the costs of heating/cooling. Many "snowbirds" don't realize the cost of air-conditioning in the Deep South, only thinking about escaping heating costs, for example...

Plus, don't forget the accessibility of quality medical care. You could move to the middle of Wyoming or Eastern Montana and find cheap housing perhaps, but where are the closest doctors and hospitals -- that is a key factor in retirement planning also.

I considered myself lucky when considering this decision -- going "back home" happens to be in a relatively inexpensive place with a mild climate, and has adequate healthcare...

Ironically, that happens to be going back to East Tennessee to retire. I don't know what's going on in Cookeville specifically, but Tennessee (outside the 4 bigger metro areas) is still one of the least expensive places in the country. As an example, East Tennessee and Western North Carolina are seeing huge influxes of retirees -- surprisingly not just from the snowbelt, but actually many (most, it seems in some areas) are people who'd retired to Florida, but are now moving out of Florida due to costs, over-population, crime and hurricanes...

 

[MotorSeven]

NONONONONO!!!! i(I) was planning on being the last person to retire to E. TN from FL..........the rest have to go someplace else /forums/images/graemlins/grin.gif /forums/images/graemlins/grin.gif
Hmm, let me see......8 months and 14 days.....ooooohhh wait........or does 7 months and 44 days sound better?

Can't wait to get the @#$* out of S. FL!

 

[heehaw]

at one time i would have said Arkansas was the cheapest, but not anymore: if you are retired from the state or fed govt: there are a couple states that don't tax your retirement: even though they tax everyone else? Arkansas did that for the state retirees, till someone felt like they where getting the raw end of the deal, retired fed worker, and took em to court: now they tax both: didn't work out the way the fed retiree thought it would! we have a state tax plus 8.5% sales tax; property tax is low, vehicle license is low, and cost of property is pretty low, compared to other states: a lot of folks have retired here, so it must be fairly cheap:
heehaw

 

[rfawkes]

After extensive study, I moved to Southern Illinois. The State does not tax federal retirees or military pensions. Housing is very inexpensive compared with other places, the climate is mild, medical care is available in good rural hospitals and clinics, and the hunting and fishing are fabulous. The sales tax is 6% plus local option. I picked up a 30 acre hobby farm surrounded by the Shawnee National Forest for 90K. Now I don't even want to go anywhere to visit. My daughter lives in Miami, but I don't enjoy going there. The only downside, is most of my children and grandchildren live in Michigan and Minnesota, so I don't see them often enough. I shop at Ft Campbell, KY, which is 90 minutes from my house.

 

[Volfandt]

TN has a 6% state sales tax rate plus local county goverments can tack on to that. Knox county is currently 9.25% for purchases up to $10k then the remainder is taxed at 6%.

TN doesn't have a state income tax but there is something called the Hall Tax that is a tax on stocks & bonds interest income. The property tax rate isn't as high as most states so it evens out somewhat.

I heard recently that due to the influx of people moving back into TN, hense the cities are getting much bigger, that the state has now been reclassified as majority urban as opposed to rural. I'm not sure what this entails but it could have an impact on farming subsidies etc., but again I don't know this for certain.
What I see on a daily basis is when a old timer passes away, the family farm becomes a subdivision. I would guesstimate that there have been at least 500 new homes, villa's & condo's constructed within a 5 mile radius of me within the last 5 years. A new 76 home subdivision now runs down my eastern and southern fence rows. And yes, my property taxes have gone up on the last reappraisal.

If we as citizens don't get a handle back on government, there may not be anyplace we can afford to own property and raise our children......

Volfandt

 

[Sigarms]

I think the most important question is would you LOVE living in an area that you picked to retire in?

I've been around geography (sp?) wise, and as I see it, it's supply and demand in the area that you're living in, and that could change as well over a short period of time.

A couple of things mentioned here. Could depend on what part of the state you live in, and the state will work to get it's money someway or another (it just may not be "clear" to you at first on how they do it).

That being said, New England is "expensive" /forums/images/graemlins/crazy.gif