New Hampshire for retirees? Bad idea

Orchidflower · 10-19-2007, 07:35 AM

I have two friends who plan to move to New Hampshire soon. I tell them that there is a 5% tax on their money, so, if they have $1MM in investments and dividends, don't they owe Uncle Sammy something like $50,000 for taxes each year (I am not taking off for write-offs...this is just quicky)? Is it just me? Is my thinking wrong?
Yes, property tax there is supposedly reasonable, no sales tax except like 8% on restaurant food, and that does save money.
Yes, I am not taking into account they went to Dartmouth, love winter, close to Canada & Boston, blah, blah.
I am just looking at this from the point of view of State tax on interest and dividends. Is this not a poor decision, since they seem to want to keep so much of their inherited wealth with them until the end.
One of us is crazy. I hope it is not me for once.

Callie · 10-19-2007, 07:41 AM

Hmmm...don't think that is correct.

> Retirement Income: Not taxed.

Property taxes are VERY high instead.

Retirement Living - Taxes by State: Kansas - New Mexico

d · 10-19-2007, 08:37 AM

i believe the 5% tax is based on investment earnings (interest and dividends), not the investments per se ...

Callie · 10-19-2007, 09:00 AM

and does not apply to 401ks/IRAs I believe.

ziggy29 · 10-19-2007, 09:45 AM

State taxes in NH are predominantly based on property levies. If you don't want to retire in a lot of home, NH is a good place to retire in terms of low overall taxes. Of course, as energy costs skyrocket, those winter heating bills could be brutal.

If you want to live in a large, expensive house in retirement, look elsewhere.

ladelfina · 10-19-2007, 09:46 AM

Revenue Administration
It is not as dire as it sounds. 5% on interest and dividends. Zero on capital gains (very few states will give you that!). Just tell your friends to invest in non-dividend-paying stocks and they won't have to pay anything (apparently) at the state level for income, just sell shares as needed.

The property tax is high in NH due to no sales tax and no earned income tax.

ziggy: wood stove. There's no real shortage of wood in NH; it's about 80%-90% forest.

Orchidflower · 10-19-2007, 10:27 AM

Hmmm...sombody's CPA doesn't listen when she talks..mine. I asked her if the 5% was on investment amounts, got a yes answer...and now I get it. Well, hey! 5% on interest and dividends, zero on capital gains...not bad at all!
Thank you for the help! I wish them well now...they can handle giving 5% to the state on strictly their interest and dividends. Heck...t'ain't that much then.

10-19-2007, 07:35 AM	#1
Orchidflower Thinks s/he gets paid by the post Join Date: Mar 2007 Location: Il-Ia. border Posts: 1,005	New Hampshire for retirees? Bad idea I have two friends who plan to move to New Hampshire soon. I tell them that there is a 5% tax on their money, so, if they have $1MM in investments and dividends, don't they owe Uncle Sammy something like $50,000 for taxes each year (I am not taking off for write-offs...this is just quicky)? Is it just me? Is my thinking wrong? Yes, property tax there is supposedly reasonable, no sales tax except like 8% on restaurant food, and that does save money. Yes, I am not taking into account they went to Dartmouth, love winter, close to Canada & Boston, blah, blah. I am just looking at this from the point of view of State tax on interest and dividends. Is this not a poor decision, since they seem to want to keep so much of their inherited wealth with them until the end. One of us is crazy. I hope it is not me for once.

10-19-2007, 09:45 AM	#5
ziggy29 Thinks s/he gets paid by the post Join Date: Oct 2005 Location: Texas Hill Country Posts: 2,330	State taxes in NH are predominantly based on property levies. If you don't want to retire in a lot of home, NH is a good place to retire in terms of low overall taxes. Of course, as energy costs skyrocket, those winter heating bills could be brutal. If you want to live in a large, expensive house in retirement, look elsewhere. __________________ FIRE Clock: Retired. Since it feels like I'll never be now. waiting for the government to privatize the gains and socialize my losses in my 401K...

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10-19-2007, 07:41 AM	#2
Callie Recycles dryer sheets Join Date: Jul 2006 Posts: 89	Hmmm...don't think that is correct. > Retirement Income: Not taxed. Property taxes are VERY high instead. Retirement Living - Taxes by State: Kansas - New Mexico

10-19-2007, 08:37 AM	#3
d Thinks s/he gets paid by the post Join Date: Apr 2006 Posts: 1,453	i believe the 5% tax is based on investment earnings (interest and dividends), not the investments per se ...

10-19-2007, 09:00 AM	#4
Callie Recycles dryer sheets Join Date: Jul 2006 Posts: 89	and does not apply to 401ks/IRAs I believe.

10-19-2007, 09:46 AM	#6
ladelfina Thinks s/he gets paid by the post Join Date: Oct 2005 Posts: 2,648	Revenue Administration It is not as dire as it sounds. 5% on interest and dividends. Zero on capital gains (very few states will give you that!). Just tell your friends to invest in non-dividend-paying stocks and they won't have to pay anything (apparently) at the state level for income, just sell shares as needed. The property tax is high in NH due to no sales tax and no earned income tax. ziggy: wood stove. There's no real shortage of wood in NH; it's about 80%-90% forest.

10-19-2007, 10:27 AM	#7
Orchidflower Thinks s/he gets paid by the post Join Date: Mar 2007 Location: Il-Ia. border Posts: 1,005	Hmmm...sombody's CPA doesn't listen when she talks..mine. I asked her if the 5% was on investment amounts, got a yes answer...and now I get it. Well, hey! 5% on interest and dividends, zero on capital gains...not bad at all! Thank you for the help! I wish them well now...they can handle giving 5% to the state on strictly their interest and dividends. Heck...t'ain't that much then.

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