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Where Will You Live When You Retire?

Where Will You Live When You Retire?     Retirement may be the perfect opportunity to do something you’ve been considering for years: move to a different state or region. But how do you decide which one? 

 Consider what taxes you’ll pay. Five states don’t charge sales tax: Alaska, Delaware, Montana, New Hampshire and Oregon. But you’ll pay tax on certain items in these states, anyways, including cruise ship-related expenses in Alaska, and restaurant meals, lodging and rental cars in New Hampshire.

Seven states don’t charge income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. Two others, New Hampshire and Tennessee, tax only dividend and interest income.(You’re thinking about New Hampshire now, aren’t you?)

Don’t forget about another big source of income for states: property tax. Guess who’s one of the worst for this annual hit? New Hampshire, of course, though it’s passed by a surprise entrant: Wisconsin! The others in the Top Ten are New Jersey, Connecticut, New York, Massachusetts, Rhode Island, Illinois, Vermont…and of course, California. (Hey, they have to make up the shortfall somewhere.)

Choose a state with lower property tax, and you’ll save big. According to the Tax Foundation, the median property tax in Louisiana is only $180 — compare that to New Jersey’s average fee of $5500! The list here includes Wyoming (thinking about that state now?), Oklahoma, New Mexico, Kentucky, South Carolina, Arkansas, Mississippi, West Virginia, Alabama and Louisiana. (The latter is on the ‘best weather’ list, too.)  See the Top Ten lists for both here, along with specifics.

 How about weather? Current results.com released a study of the top ten U.S. states with the ‘best weather.’ Their criteria was based on:

  • Comfortable temperatures, with daily highs averaging between 63 and 86 degrees Fahrenheit (17 to 30 degrees Celsius) for seven or more months of the year
  • Dry weather, at most 60 inches (152 centimeters) of rain a year
  • Mainly clear skies, with sunshine for at least 60 percent of the time on a yearly average

The winners? Hawaii, Texas, Arizona and Georgia are in the top five, with California topping the list. The only problem: these states are also uncomfortably hot at times. (And, depending on which area of the state you live in, you’ll have to give up the idea of snow for Christmas. Figures.) Do you enjoy gardening or outdoor activities…or would you rather not?

What about overseas? A number of countries, especially those in Mexico, the Caribbean and points further south, have warm weather year-round. Costs of living are often lower; some countries, like Panama, even offer special discounts for American retirees.

Friends, family and familiarity. If you move, you’ll probably give up one — or all three. (Or in the case of kids or friends who have already moved out of state, you may be getting them back!) And with patience and determination, you’ll learn more about your chosen site. But do you want that?

A poor economy may actually work in your favor this time. That is, if you have fixed income or assets you can rely on. Housing can suddenly be a real bargain. (Michigan, for example, was hard-hit by the tanking of the auto industry. Detroit area real estate, as well as homes all over the state, has rarely been lower.) Recreation and living costs are lower, too. Just don’t always expect that jobs will be easy to find.

     Choosing a good retirement location deserves time and careful attention: don’t rush into it.  A good all-around site, with many articles, is at US News’ Money site. Their ‘Retirement’ section pegs ‘ten best’ lists for all sorts of parameters, including best for singles; places for managing on Social Security income alone; even the best areas to live a few decades from now.  If this site doesn’t answer at least one of your questions, you’re not looking hard enough!

13 Responses to Where Will You Live When You Retire?

  1. All of my older relatives move to Florida for the winter and up North again in the summer. I think we will probably do something like that, but it will be difficult to be away from family for several months of the year.

  2. California really doesn’t have high property taxes as a percentage; just that our values are higher than most. If you hold on to your property, the assessed value goes up VERY slowly. But we make up for it with high taxes on everything else!

    It’s important to look at the entire tax picture when selecting a retirement home.

  3. Paul and Jefferson, you both have great points about living near your kids. That’s one reason my husband and I plan to leave California when we retire; our 5 kids (between us) have already left the state and are spread out from Kansas to Florida.

    Since we can’t live by all of them, we’ll settle near the warm waters of Florida and be much closer.

  4. We’ve been bouncing around the idea of moving out of the country when we retire (we don’t have kids – as of yet I should say). We’re not sure where yet, but Belize, parts of Mexico, South America, or even Thailand look pretty interesting. We’re still a long way from that point (or I at least a good 15 years or more), but it’s a definite option.

  5. I personally know some people who chose to retire abroad. The cost of living is much cheaper plus the fact that their money is definitely worth a lot more in foreign countries especially in Asia.

  6. Growing up in Michigan, many of my uncles and aunts retired to Florida in the winter months. That entailed keeping two residences, though — one in Michigan, one in Florida. Worked out good for seeing the kids…but one by one, the uncles and aunts died or gave up their Florida place.
    Part of me would love to retire to Wyoming or some other wide-open Western state. We currently live in the Denver area of Colorado, which is WAY too expensive. Down south in Colorado might do the trick, though; climate is much more mild there. And Husband suffers badly from the cold.
    He wants to go to to Panama, though…or a similar country. We may end up staying part-time there, and part-time in the U.S. Just like my uncles and aunts.

    Thanks so much for writing, all of you. And yes, Michael, some of this is dreaming. But that’s how you start to plan.

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