Author Topic: Retiring But where?  (Read 5932 times)

fly2surf

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Re: Retiring But where?
« Reply #30 on: February 17, 2019, 06:37:08 AM »
So what are your ideas on where? Given this is going to be a low budget affair?

Since you got screwed financially, will you still be working some to make ends meet?

These are the only states that donít have income tax:
Alaska
Florida
Nevada
New Hampshire
South Dakota
Tennessee
Texas
Washington
Wyoming

maxsonic

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Re: Retiring But where?
« Reply #31 on: February 17, 2019, 07:39:11 AM »
So what are your ideas on where? Given this is going to be a low budget affair?

Since you got screwed financially, will you still be working some to make ends meet?

These are the only states that donít have income tax:
Alaska
Florida
Nevada
New Hampshire
South Dakota
Tennessee
Texas
Washington
Wyoming

We're planning Washington State Residency...Kitsap or Olympic Peninsula...Spring/Summer/Fall weather is beautiful there IMHO, even into late Fall. We can handle Taxifornia while working, but not in retirement.  We'll still snowbird and spend the coldest winter months in warmer climate seaside locations in the South Pacific, i.e. SoCal, Hawaii, CR, (other country suggestions ?) .... 

Four more years to financial independence and total freedom!

MAX 

puget sound

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Re: Retiring But where?
« Reply #32 on: February 17, 2019, 07:47:44 AM »
I grew up in southern CA and now live in western WA. SUP Leave is right...there is no shortage of water here. Lakes everywhere, plus the Puget Sound. The Sound has crazy tidal currents and sea critters that make it more interesting than lakes, and salt water will feel right if you have a surf background. Downwinding is also an option if you can drive to the Gorge (3 hours for me). I plan to try that this summer.

You can SUP year round here, no problem. I'm wearing a wetsuit this winter but might upgrade to a dry suit for convenience. The downside of western WA is a long gray drizzly winter. Temps are fine...we rarely get below freezing...but the constant gray can wear you down emotionally. Eastern WA is a different beast. It's more like Nevada.

Cost of living is reasonable and frugality is way more accepted here than SoCal. No need for flashy cars or clothes, for example, unless you count rain jackets.

Summers are glorious. It's our best kept secret. Air quality is great. No income tax. Cheap flights to CA to visit family, or drivable if you have the time.

RideTheGlide

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Re: Retiring But where?
« Reply #33 on: February 17, 2019, 08:02:29 AM »
So what are your ideas on where? Given this is going to be a low budget affair?

Since you got screwed financially, will you still be working some to make ends meet?

These are the only states that donít have income tax:
Alaska
Florida
Nevada
New Hampshire
South Dakota
Tennessee
Texas
Washington
Wyoming

The only savings a state gets from not taxing income is the elimination of the costs associated with collecting income taxes. If they eliminate one source of revenue, they will likely have to increase others in order to meet expenses. You have to look at the overall tax burden. Lack of income tax is a pretty good indicator; 3 of the lowest 10 states ranked by tax burden have no income tax. But there are other factors that cause some of the states (most notably TX and OK) to be a lot further from the bottom of the list than you would expect:

https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494/
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2017 GoPlus 9'9" x 6" iSUP (generic low end all around)

eastbound

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Re: Retiring But where?
« Reply #34 on: February 17, 2019, 08:45:37 AM »
great chart--the differences state to state are impressive

depressing--as a property owner in ny and ct, and an income earner in ny--ouch
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PonoBill

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Re: Retiring But where?
« Reply #35 on: February 17, 2019, 09:01:32 AM »
That's a great link RTG, and anyone retiring needs to look at how their income sources fit into the tax anc cost matrix of the state and city they choose to move to. A lot of analytically wise retirees move to Iowa, which at first glance seems like a poor choice. But if your income comes from tax-free sources and your property cost is low, then it looks fine. Retirement income from pensions, social security and post-retirement jobs is taxable and relatively easy to calculate, but income from tax-free bonds, annuities, an IRA/401k is more complex, and varies with how you take money from them as well as where you live. Not a simple choice and it might be worthwhile to get some tax advice before you uproot and discover you moved from one frying pan to another.

EB, on the bright side, if/when you retire almost anywhere you go will be cheaper. My choices of Hawaii and Oregon to retire to are about as stupid as it gets from a financial standpoint, but not many people tell me how dumb I was, other than myself and my budget spreadsheets.
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RideTheGlide

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Re: Retiring But where?
« Reply #36 on: February 17, 2019, 09:29:19 AM »
Pono,

I could be wrong, but I suspect there are highways narrower than the financial tightrope you are walking in retirement.  ;)

I think the tightrope has to be pretty small or the COL unavoidably high before you give up on a location where you really want to retire. For most of us in the US wanting to retire in the US, HI is off the table; that's what I mean by unavoidably high COL. You can make most other *general* locations work with some trade offs. By general locations I mean further from the coast than you might like in SoCal, but still close enough to go to the beach for day trips, maybe having a smaller place than you had dreamed of if that's something you didn't feel as strongly about. I look at the tax hit further down the list than other aspects of the COL.

Also keep in mind that the crazy high income tax rates are progressive; if you are just drawing enough to make ends meet, there won't be that much tax.
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Wetstuff

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Re: Retiring But where?
« Reply #37 on: February 17, 2019, 09:31:30 AM »
"analytically wise retirees move to Iowa" ... I am glad you injected that, Bill.  Even in the 60's it was kind of a running joke: 'Lots of people got speeding tickets driving away from Iowa - almost none headed to...'    I would liken those people to the ones you hear about living in squalor and leaving $1mil to 'the church'.  Who'd want to sit in a cornfield waiting for 'the big one'? (...it's close to the real Mayo Clinic!)  I suspect your quality of life is substantially better than had you chosen Iowa and PR.

I have a kind of paralysis - we have the money to leave but all my junk is here and 'still enjoy the work/play life I have created.  'If' - I was closer by air, there would be plenty of places to zip off to, but it takes nearly as much time to get to MEX as Portugal  ...and, the dog.


Jim
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maxsonic

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Re: Retiring But where?
« Reply #38 on: February 17, 2019, 10:39:33 AM »
So what are your ideas on where? Given this is going to be a low budget affair?

Since you got screwed financially, will you still be working some to make ends meet?

These are the only states that donít have income tax:
Alaska
Florida
Nevada
New Hampshire
South Dakota
Tennessee
Texas
Washington
Wyoming

The only savings a state gets from not taxing income is the elimination of the costs associated with collecting income taxes. If they eliminate one source of revenue, they will likely have to increase others in order to meet expenses. You have to look at the overall tax burden. Lack of income tax is a pretty good indicator; 3 of the lowest 10 states ranked by tax burden have no income tax. But there are other factors that cause some of the states (most notably TX and OK) to be a lot further from the bottom of the list than you would expect:

https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494/

This table is misleading...it shows California Individual Income Tax Rate at 3.65%...???

The California State Tax Bracket for <4% is only for those earning $38,990.00 or less. It is 8% or above for middle income earners. 

Check State Income Tax Brackets here: https://www.tax-brackets.org/californiataxtable

The new limit of State and Local Income Taxes (SALT) as a Federal Income Tax deduction makes living in Taxifornia even more painful...which is why many of us nearing retirement are developing our exit strategy.

MAX

fly2surf

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Re: Retiring But where?
« Reply #39 on: February 17, 2019, 11:04:01 AM »
So what are your ideas on where? Given this is going to be a low budget affair?

Since you got screwed financially, will you still be working some to make ends meet?

These are the only states that don’t have income tax:
Alaska
Florida
Nevada
New Hampshire
South Dakota
Tennessee
Texas
Washington
Wyoming

But there are other factors that cause some of the states (most notably TX and OK) to be a lot further from the bottom of the list than you would expect:

https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494/

It’s always good to look at the big picture, but that chart is flawed. 

Just at a quick glance, California income tax is higher than the chart number, Texas property tax is lower than the chart number, real life sales taxes are almost double the chart number (NY, CA), etc.

Back to the original question, the OP sounds like he will have low savings hence my question about working for income. 

It is highly likely most of his money will be coming from Social Security and part time work, so state income tax is a much bigger deal than those fortunate enough to have savings, tax free accounts (Roth), municipal bonds, paid off properties, etc. 
« Last Edit: February 17, 2019, 11:09:48 AM by fly2surf »

RideTheGlide

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Re: Retiring But where?
« Reply #40 on: February 17, 2019, 11:20:37 AM »
So what are your ideas on where? Given this is going to be a low budget affair?

Since you got screwed financially, will you still be working some to make ends meet?

These are the only states that donít have income tax:
Alaska
Florida
Nevada
New Hampshire
South Dakota
Tennessee
Texas
Washington
Wyoming

The only savings a state gets from not taxing income is the elimination of the costs associated with collecting income taxes. If they eliminate one source of revenue, they will likely have to increase others in order to meet expenses. You have to look at the overall tax burden. Lack of income tax is a pretty good indicator; 3 of the lowest 10 states ranked by tax burden have no income tax. But there are other factors that cause some of the states (most notably TX and OK) to be a lot further from the bottom of the list than you would expect:

https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494/

This table is misleading...it shows California Individual Income Tax Rate at 3.65%...???

The California State Tax Bracket for <4% is only for those earning $38,990.00 or less. It is 8% or above for middle income earners. 

Check State Income Tax Brackets here: https://www.tax-brackets.org/californiataxtable

The new limit of State and Local Income Taxes (SALT) as a Federal Income Tax deduction makes living in Taxifornia even more painful...which is why many of us nearing retirement are developing our exit strategy.

MAX

It is really difficult for these articles to apply to multiple audiences. According to this 2016 article, the median income for retirees is ~ $32K:
https://www.usatoday.com/story/money/columnist/powell/2016/07/14/retirees-low-income-social-security/83934392/

so for the majority of the population, the chart is accurate. However, most retirement articles do have an expected audience of high earners and the median income of people who actually look at that chart is probably much higher. It's hard to say what numbers to go with in a simple chart. It would be nice if it were interactive - what income, will you rent or buy? What price range? etc...
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fly2surf

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Re: Retiring But where?
« Reply #41 on: February 17, 2019, 11:42:49 AM »
So what are your ideas on where? Given this is going to be a low budget affair?

Since you got screwed financially, will you still be working some to make ends meet?

These are the only states that donít have income tax:
Alaska
Florida
Nevada
New Hampshire
South Dakota
Tennessee
Texas
Washington
Wyoming

The only savings a state gets from not taxing income is the elimination of the costs associated with collecting income taxes. If they eliminate one source of revenue, they will likely have to increase others in order to meet expenses. You have to look at the overall tax burden. Lack of income tax is a pretty good indicator; 3 of the lowest 10 states ranked by tax burden have no income tax. But there are other factors that cause some of the states (most notably TX and OK) to be a lot further from the bottom of the list than you would expect:

https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494/

This table is misleading...it shows California Individual Income Tax Rate at 3.65%...???

The California State Tax Bracket for <4% is only for those earning $38,990.00 or less. It is 8% or above for middle income earners. 

Check State Income Tax Brackets here: https://www.tax-brackets.org/californiataxtable

The new limit of State and Local Income Taxes (SALT) as a Federal Income Tax deduction makes living in Taxifornia even more painful...which is why many of us nearing retirement are developing our exit strategy.

MAX

It is really difficult for these articles to apply to multiple audiences. According to this 2016 article, the median income for retirees is ~ $32K:
https://www.usatoday.com/story/money/columnist/powell/2016/07/14/retirees-low-income-social-security/83934392/

so for the majority of the population, the chart is accurate. However, most retirement articles do have an expected audience of high earners and the median income of people who actually look at that chart is probably much higher. It's hard to say what numbers to go with in a simple chart. It would be nice if it were interactive - what income, will you rent or buy? What price range? etc...

Just trying to help the OP with his predicament..... low savings due to business partner, lost his house, etc. 

I stand by my advice that avoiding state income tax is important to his situation and that the article and chart someone else posted is not accurate.

spirit4earth

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Re: Retiring But where?
« Reply #42 on: February 17, 2019, 04:39:29 PM »
So what are your ideas on where? Given this is going to be a low budget affair?

Since you got screwed financially, will you still be working some to make ends meet?

These are the only states that donít have income tax:
Alaska
Florida
Nevada
New Hampshire
South Dakota
Tennessee
Texas
Washington
Wyoming

Meaning, these states donít tax 401k income, if you have that.  I have a tiny bit, and Iím thinking about leaving NC just so I donít have to pay state taxes.  My 401k is so tiny that state tax would take too big a bite.

spirit4earth

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Re: Retiring But where?
« Reply #43 on: February 17, 2019, 04:49:51 PM »


Just trying to help the OP with his predicament..... low savings due to business partner, lost his house, etc. 

I stand by my advice that avoiding state income tax is important to his situation and that the article and chart someone else posted is not accurate.
[/quote]

I agree.  Low and SSI and still working part-time means an income tax-free state might help. 
A place like Seattle, though, is an example of where local taxes take big bites out of your net.

PonoBill

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Re: Retiring But where?
« Reply #44 on: February 17, 2019, 07:29:47 PM »
Pono,

I could be wrong, but I suspect there are highways narrower than the financial tightrope you are walking in retirement.  ;)

I think the tightrope has to be pretty small or the COL unavoidably high before you give up on a location where you really want to retire. For most of us in the US wanting to retire in the US, HI is off the table; that's what I mean by unavoidably high COL. You can make most other *general* locations work with some trade offs. By general locations I mean further from the coast than you might like in SoCal, but still close enough to go to the beach for day trips, maybe having a smaller place than you had dreamed of if that's something you didn't feel as strongly about. I look at the tax hit further down the list than other aspects of the COL.

Also keep in mind that the crazy high income tax rates are progressive; if you are just drawing enough to make ends meet, there won't be that much tax.

You're right BUT, I've been poorer than most at one time, and frugal habits are good ones to keep, even if you don't think you need them.

As you infer, the problem with charts relating a percentage of tax is that they don't show the whole picture. Property taxes might look super high, but if your home in eastern Washington cost one third what your California home sold for, the resultant tax is probably about 33 percent of what you previously paid--or less. I know people who moved to a low-income tax state and then realized that their low retirement income put them in a very low bracket but the sales tax (regressive) and property taxes (semi-regressive) were eating them up. Or you could move to Alaska for the tax benefits and then spend a lot of money staying warm and getting the heck out of there when it's horrid.

Take your time and figure it out.
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