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Best State Residency
Old 05-21-2014, 04:36 AM   #1
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Best State Residency

There is still a long way until I officially retire; in fact, I just graduated this summer with lots of student loans. I have done some bad investment deals in the last few years that put me into an even worse financial situation. However, I have faith in myself that everything will get better and be alright.
So, to start a new life, I am wondering where would be the best state/city to move to. I lived in Brooklyn, my parents have house in Staten Island, and I went to school in Boston. In term of career opportunity, Boston and New York are definitely better, especially as I already knew the area. However, the state income tax, property tax and everything else are also worse. Ideally, I want to get into the investment industry, ex: prop trading, and then accumulate capital to invest in real estate. Boston and New York also have a very high Price to Rent ratio, which make it less profitable.
Could someone please give me some advice?
Thanks
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Old 05-21-2014, 06:40 AM   #2
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There are way to many variables to list. Take the job with the most money and go from there.
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Old 05-22-2014, 02:53 PM   #3
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There are way to many variables to list. Take the job with the most money and go from there.
+1

Comparing state taxes is a lot more complex than just comparing the top marginal tax rates. The lower 85% of Californians pay a lower rate of total state taxes than the lower 85% of Texans. You can't assume that you'll always be in the top 15%. My parents moved from a "high" tax state that didn't tax Social Security to a "low" tax state that did tax SS which would have been a wash until they discovered that their auto insurance would triple. In a few years you might find that living in MA and sending your children to public school is cheaper than living in a state with a lower rate of income tax and having to put your kids in private school.

Find a job you enjoy at least part of the time, live within your means, save money ... and live someplace that makes you happy.
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Old 05-22-2014, 03:48 PM   #4
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Actually you need to include local taxes as well. For example in Tx you can have a 20% plus difference in Taxes depending on if you live in a city versus in an unincorporated area. (Plus of course you do need to look at property values as they make a difference in total state and local taxes paid.) In Tx you don't pay state income tax but property taxes can be high. Sales tax is about the same with CA including local add ons in Tx but not in Ca i.e 8.25% in Tx. Property tax can run upwards of 2% of assesed value in Tx.
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Old 05-22-2014, 03:52 PM   #5
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I agree that there are a lot of variables. In general, what you need to look at (from pure financial perspective) is to maximize your "net cash". In other words, what combination of job and location will give you the most money after taxes so you have capability to start doing the savings for retirement. It may not be the lower tax state if the wages are lower to go with it. Cost of living is also a big consideration, if it takes a lot more of your net cash, then result is you have less available for savings.

Then there is the whole quality of life issue and where you live if that is what you want. You grew up in fairly dense, high population, big city environment. You may not like living in a rural area, even if it is financially advantageous.

Your first job will not be your last and certainly not your full career. Many people change in their career. Use your first job to learn and get as much experience as you can. That is worth a lot in non-money value.

Weather is also a consideration. Many people want to live away from the cold winters. Some love snow. Consider this as part of that where you are comfortable living with.
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Old 05-22-2014, 07:31 PM   #6
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Just do what I did.......move to Hawaii and never live in temperatures below 70 degrees.....(Just kidding...I did it but it isn't for everybody, just want to lighten up the conversation)
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Old 05-22-2014, 07:45 PM   #7
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You will find that state and local govts are going to append a certain amount of money and they are going to get it from you some where with some kind of taxes, whether it be income tax, sales tax, real estate tax or whatever. Just look for the most efficient state and local politicians who are not trying to equalize the wealth.
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Old 05-22-2014, 07:55 PM   #8
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Originally Posted by sanfanciscotreat View Post
You will find that state and local govts are going to append a certain amount of money and they are going to get it from you some where with some kind of taxes, whether it be income tax, sales tax, real estate tax or whatever. Just look for the most efficient state and local politicians who are not trying to equalize the wealth.
+1
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Old 05-22-2014, 11:37 PM   #9
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Canada.
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Old 05-26-2014, 04:04 AM   #10
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Health insurance costs post Obama care / ACA - This goes beyond state to counties municipalities - the cost for health insurance vary greatly state to state.

Really difficult to assess lowest cost states - states like Washington have zero state income tax but high sales tax and high property tax and cost.

It becomes a total cash question, as others have said vs just tax rate differences.
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Old 05-26-2014, 05:36 AM   #11
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There are lots of comparison tools. Here's a decent one.

State-by-State Guide to Taxes on Retirees-Kiplinger
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Old 05-26-2014, 12:57 PM   #12
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Try this:

The 8 Least Expensive States to Live in the U.S.

However, even this may not tell the story. I personally would not make the decision on taxes. A good stable job is more important, imho. High property tax, but low property values trade off. High gas prices, but cheap public transportation. IMHO, you are the only one that can really evaluate all the variables. Finding a stable job, in a low cost area, 3,000 miles from family and friends for the next 20 years may be OK or may not be OK.
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Old 05-26-2014, 03:33 PM   #13
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I would say unless you are military, high opportunity, high amenity areas will mostly be high cost areas.

One good job is not a career. If someone is a software person, much better to be in Silicon Valley, or San Francisco, or LA or Seattle or Austin or perhaps DC. The depth of knowledge and opportunity and room to grow is much greater, and given the desire to work and not just to get some money and quit, it will pay off many times over.

It may be wise for an ER to seek a hidey-hole somewhere, but it is definitely not wise for someone who has an open ended career ahead of him/herself. It is always possible that he will like it and be outstanding at it.

Ha
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Old 05-26-2014, 07:54 PM   #14
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Don't overlook Nashville.
Quite a lot of opportunity, reasonable cost of living, and considered to be a great place for the younger among us...Whatever that means
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