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Old 01-06-2014, 04:12 PM   #21
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I was going to ask, is that mill still operating, and still smelly?

IMO, having been around a few paper mills in my day, there is no tax difference that could make me put up with paper mill odors in their full glory. But some mills have been greatly cleaned up as to both air and water pollution.

Ha
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Old 01-06-2014, 04:37 PM   #22
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Goes without saying. Anyone familiar with the great (tax) states of NY, MA, CA etc doesn't expect them to let you off the hook just because you "say" you've moved. Lawyers actually have ads in FL offering to help you make the switchover.
Somehow I think that what the move (and the lawyers!) would cost will far exceed the tax savings for the rest of my life.

My effective CA state income tax rate is 0.5%. Property taxes are limited in how fast they can go up, and are loced to the 1987 home purchase price. No sales tax on groceries, our major retail purchase, or on medical care or insurance, our other major spending categories.

Folks really need to take a long, hard look at how much they ACTUALLY pay in taxes before contemplating a move.
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Old 01-06-2014, 04:40 PM   #23
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Taxes don't make my top 5 criteria.
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Old 01-06-2014, 04:49 PM   #24
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Taxes are a consideration but doesn't come close to being a main criteria. We were just talking about that today, considering one of the Carolinas, which has the warmer weather we'd like, or southern PA, which is closer to family.

But we also learned in the move to WV, in which proximity to family was a major consideration, that people move for various reasons and the lesson was don't plan our moves on what we think others will do.
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Old 01-06-2014, 05:03 PM   #25
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For those who have done an in depth evaluation, please give me the major financial factors/considerations when evaluating moving for tax reasons.


I’m within 5 years of being financial able to retire (not sure if I’ll be emotionally ready) and wonder if I should at least “consider” moving for retirement tax reasons as part of the planning. The only reason I’ve even thought of it is because a couple of recent company retirees; whom I respect, have both set up residences in other states (Florida and Hawaii). While at first glance Florida (with no state tax) seems reasonable, Hawaii with high cost of living doesn’t. Both of these retirees own +$3 million in company stock, so I wonder if capital gains may be the driving tax factor.


My wife and I have lived in Iowa our whole lives. We each have extended family living near us and both have parents which play a part of our decision making while they are still alive. I do a fair amount of international travel for work which I enjoy, but I do admit I like being home. I consider our current small town location to be quite reasonable for cost of living and a primary reason we can afford to retire early.


While I would be willing to consider living in another state or even another country, I don’t think my wife would until the kids are thru college which is 8 years minimum (youngest just started high school) and her mom has passed away. It doesn’t look likely that her mom will be passing away anytime in the next 10 years (late 60s and in good health, wife’s grandmother still in reasonable good health at 95).


Since most of you seem to be planners, I'm sure you understand the "need" to consider and evaluate the option even if you don't see it as being a probable option.
Tax considerations were a small factor in our move to Florida after I retired ---- but we had few good reasons to stay where we were at & were definitely moving somewhere else. It was just a matter of deciding where.

I'm seeing a lot of good reasons (in bold above) for you to stay in Iowa ---- and not much good reason to move elsewhere just to save a few bucks in taxes.
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Old 01-06-2014, 05:18 PM   #26
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Taxes are important, but before I bought a house in a new area, I would rent there for one year. When we lived in Oregon, we watched retirees move to the beautiful northwest (many from California), only to move away after 9 months of drizzly, gloomy skies. And now Oregon and Washington are tagged in worst states to retire FWIW.
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Old 01-06-2014, 05:44 PM   #27
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we plan to move to the greater Portland, OR area. The suburbs in WA look tempting when I take into consideration the difference in income tax between OR and WA. DW is skeptical.
A good friend recently retired and moved from here in the midwest to Vancouver, WA. As you point out, no state income tax and nearby shopping with no sales tax. Best of both worlds in a way.

He is delighted with the situation, but there were other considerations in the forefront (family nearby). Still, it could easily be a consideration for some ...
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Old 01-06-2014, 05:46 PM   #28
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.... And now Oregon and Washington are tagged in worst states to retire FWIW.

Ten worst states per the link:

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Bankrate.com compiled its rankings on the basis of healthcare, crime, taxes, climate and bang for your buck. Oregon got dinged for its cost of living (37th), below-average temperature and hospital bed availability, as well as its above-average tax and crime rates.

Alaska, Washington, California, Wisconsin, Maine, Maryland, Vermont, Minnesota, Delaware and Connecticut round out the worst 10.
Aside from that being 11 states in the list of 10 worst, Illinois and Michigan are feeling mighty good about themselves .
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Old 01-06-2014, 05:55 PM   #29
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I am still surprised that so many people/articles keep saying how drizzly/damp it is in the NW. Over half the land is on the dry side.....Portland and Seattle get the attention though....and they are damp, but usually nice summers. As far as WA being expensive....maybe if you live in the Seattle/Vancouver area that might be true.....plenty of other places in the state where the costs are a lot lower.
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Old 01-06-2014, 06:18 PM   #30
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Taxes are important, but before I bought a house in a new area, I would rent there for one year. When we lived in Oregon, we watched retirees move to the beautiful northwest (many from California), only to move away after 9 months of drizzly, gloomy skies. And now Oregon and Washington are tagged in worst states to retire FWIW.
Don't forget the poisonous spiders, toxic fungi, rattlesnakes, and of course, land cephalopods.

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Old 01-06-2014, 06:29 PM   #31
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My effective CA state income tax rate is 0.5%. Property taxes are limited in how fast they can go up, and are loced to the 1987 home purchase price. No sales tax on groceries, our major retail purchase, or on medical care or insurance, our other major spending categories.

Folks really need to take a long, hard look at how much they ACTUALLY pay in taxes before contemplating a move.
I'm still working and my effective CA state income tax rate is about 7.5%. Throw in other state and property taxes and the total effective rate is 10%. Much of this is not federally deductible because I am subject to AMT. When I retire, if I decide to immediately take my pension, my state taxes will continue to be high.

On an annual pension income of $85K and $15K interest/dividends, I will pay over $10K in state and property taxes in California. There are other taxes such as 9.75% sales tax and relatively high vehicle registration fees. Future RMD's and dividends growth will be taxed at 9.3%. The same with realized capital gains and Roth rollovers, if any.

If I move to a medium tax state such as Colorado and live in an equivalent house, my total state and property tax burden will be about $5K (back of the envelope calculation). If I move to a no income tax state such as Nevada or Wyoming, my total state/property tax burden will be less than $2K. Factoring in the general high cost of California living, I will generalize and estimate a $10K/yr premium to live in California. If anything, this estimate is overly conservative. The California premium may be higher, especially considering future RMD's and potential Roth rollovers that will be taxed at the higher California marginal rate (granted, reverse factors such as one-time moving costs need to be considered). But a $10K+ premium is not insignificant.

Is it worth it to me to spend an additional $10K/yr (or more) to live in California instead of another state that I find desirable? Maybe. Probably not.
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Old 01-06-2014, 06:58 PM   #32
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Somehow I think that what the move (and the lawyers!) would cost will far exceed the tax savings for the rest of my life.
Mass has a flat 5.2% income tax (no deductions or "effective rate"). For a lot of folks that means $5K to $8K or more a year to the bottom line..a lawyer would hit you with a one-time $500 fee (per the ads anyway)
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Old 01-06-2014, 07:12 PM   #33
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I wouldn't put myself in the "in depth analysis" club, but, just by accident, while noodling a strategy for Roth conversions, I noticed that state income tax was HUGE compared to any improvement to be gained shuffling IRA money around.

Since there are probably a lot of folks that just plain don't like the idea of moving (count me as one), you probably should take at least some of the 'don't move' comments with a grain of salt. I mean, it seems like most (>50%) here have not moved, yet they all are super smart with their finances. So to suggest moving for tax efficiency, something many didn't do, might generate pangs of cognitive dissonance, hehe!

I'm lucky in that I can move about 20 miles, stay in the same MSA and get lower taxes. And be closer to DW's family! But I STILL probably won't move because it's a PITA! I also have my entire extended family in Florida, so that's probably the move we will be making, but not until there is 'less family' here, if you know what I mean.

I think a good question would be, "what would you do with the extra money?" Of course you'd need to price out the null hypothesis, and a specific other location. Although there is some satisfaction gained from just not letting the particular state get their mits on your funds, it's more important to figure how those few bucks will translate into a more joyful or meaningful existance. We all know that just having the extra bucks won't make you a bit happier!
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Old 01-06-2014, 07:21 PM   #34
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A good friend recently retired and moved from here in the midwest to Vancouver, WA. As you point out, no state income tax and nearby shopping with no sales tax. Best of both worlds in a way.

He is delighted with the situation, but there were other considerations in the forefront (family nearby). Still, it could easily be a consideration for some ...
We have a daughter on the coast, due west of Portland. I consider the coastal area great to visit, but I can't see living there, thus considering Portland and environs..
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Old 01-06-2014, 07:28 PM   #35
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Virtually anywhere else in the US would have lower taxes. But I like it right here and I'm not planning to leave.
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Old 01-06-2014, 07:55 PM   #36
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Don't forget the poisonous spiders, toxic fungi, rattlesnakes, and of course, land cephalopods.
Lol- we never saw a single poisonous snake or spider while we lived in Oregon. Texas, on the other hand, is quite different. The large scorpions in the house no longer bother me, but last year my daughter found a coral snake under her bed. Coral snake venom is much more potent than a rattler, and if you step on one with bare feet, well yall'd better vamoose to the ER. It's creepy to have to check under the bed each night.
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Old 01-06-2014, 07:57 PM   #37
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Texas, on the other hand, is quite different. The large scorpions in the house no longer bother me, but last year my daughter found a coral snake under her bed. Coral snake venom is much more potent than a rattler, and if you step on one with bare feet, well yall'd better vamoose to the ER. It's creepy to have to check under the bed each night.
I need to add "coral snakes under the bed" to my list...
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Old 01-06-2014, 09:19 PM   #38
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Thanks for all the responses. I agree there needs to be other factors which make you want to move and then it's just a cost optimization of the place you would consider moving to.

I think I've fulfilled my need to see if there was some big secret financial saving reason that was not readily apparent to me. So it looks like we'll stay in Iowa until we find a place we would like better.
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Old 01-09-2014, 10:42 AM   #39
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Great thread, all! We've been retired for a couple of years and have always talked about moving to warmer climes. It's daunting at first to decide where to go. I started with "Where don't we want to live?" which narrowed things down considerably!

But seriously, it's really difficult to get one's arms around this! No family considerations here - nothing really keeping us here. If you faced a similar opportunity to pick up, part and parcel, and plant down somewhere else, what helped you the most in making your decisions on where to go?

P.S. We're not in a position to rent someplace for a while first. Would be nice, but not workable.

Thanks for your thoughts.
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Old 01-09-2014, 11:55 AM   #40
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P.S. We're not in a position to rent someplace for a while first. Would be nice, but not workable.
If you can't afford to rent even a tiny studio apartment in your new location for a few months before moving there and buying, how do you plan to assess your new location and decide if you are sure that you want to live there? How will you know what neighborhood in the new location will be right for you? You don't appear to be certain at this point, after your internet search. Do you intend to depend on the advice of people on a message board, to make these determinations for you?

Could you sell your present home, put your things in storage, and THEN rent for a while before buying?

Maybe you simply can't afford to move right now. Lacking any further information, my advice is to stay put.
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