taxes by state

[killingme]

This was one of my concerns living in one of the taxU2death states, CT. I have read a number of threads regarding the issue but since they were older thought to present this link Taxes by State, maybe not perfect but gives a fairly strong representation of what to expect.

I hope others find it helpful.

 

[bUU]

I worry about any one-aspect surveys of places to live in retirement. We wouldn't just be moving our taxable income to the state, but moving our bodies, our minds, etc. I've seen comprehensive reviews of states using a broad spectrum of criteria, including climate, crime, health, cost of food, cost of energy, cost of services, and job opportunities for seniors, as well as taxes. Looking at taxes without looking at least also at other costs of living would be misleading I would think.

It doesn't change the order that much, but it has been pointed out to me in the past that this does move Virginia (at least) up in the list quite a bit. I'm sure there are other states that move up and states do better in an overall comparison than they do strictly on taxes.

 

[kmt1972]

I was wondering about this. It seems lots of people on this board are very financially savvy. If so why is not everyone on this board that are in ER not int FL or NV. I was thinking of these two places for my ER but also places like PA (which does not tax 401K and SS) might work as well. Is it somehow cost of living in FL is relatively higher then I thought. Of course any place is better than NY where I live. Once our child is in college we are out of here.

 

[jimbee]

I was wondering about this. It seems lots of people on this board are very financially savvy. If so why is not everyone on this board that are in ER not int FL or NV.

Too blasted hot.

 

[Walt34]

I worry about any one-aspect surveys of places to live in retirement.

Indeed. Tax rates are but one of many factors influencing Where To Retire. WV is generally middle of the road on tax burden sites but proximity to family was also an important consideration for us even though I loathe cold weather.

 

[RunningBum]

I was wondering about this. It seems lots of people on this board are very financially savvy. If so why is not everyone on this board that are in ER not int FL or NV. I was thinking of these two places for my ER but also places like PA (which does not tax 401K and SS) might work as well. Is it somehow cost of living in FL is relatively higher then I thought. Of course any place is better than NY where I live. Once our child is in college we are out of here.

Go back and read bUU's post. Money is just one factor, and taxes are only part of the picture anyway. Florida has little to no interest for me.

 

[Fishingmn]

I was wondering about this. It seems lots of people on this board are very financially savvy. If so why is not everyone on this board that are in ER not int FL or NV. I was thinking of these two places for my ER but also places like PA (which does not tax 401K and SS) might work as well. Is it somehow cost of living in FL is relatively higher then I thought. Of course any place is better than NY where I live. Once our child is in college we are out of here.

My kids, my family and my friends are all in Minnesota. If my kids all moved south I'd consider it but taxes/cost of living are no where near as important.

 

[FANOFJESUS]

Here is a map for state income taxes
http://taxfoundation.org/sites/taxfoundation.org/files/docs/income_collections_large.png

 

[killingme]

Agree with all comments

I agree with everyone's comments stated here. I offered this link as part of the whole package. Originally my intention was to move upstate NY but with the state of the state that has gone by the wayside. There is definitely a balance to all things, and this chart is simply one part of it for those who might be interested.

 

[MichaelB]

Many here have figured out that less state income tax does not mean lower total cost of living, and lower COL does not mean higher standard of living or quality of life.

 

[DeborahB]

This was one of my concerns living in one of the taxU2death states, CT. I have read a number of threads regarding the issue but since they were older thought to present this link Taxes by State, maybe not perfect but gives a fairly strong representation of what to expect.

I hope others find it helpful.

I realize this isn't perfect but I looked up Missouri and the taxes on food and other purchases are wildly out of date. It makes me nervous about the data.

"4.225% (prescription drugs exempt; food is taxed at 1.225%) Cities and counties as well as special taxing districts (such as fire districts) may impose a local sales and use tax that may raise the total tax by about 6.625%."

The real sales tax in Kansas City is over 4% on food and nearly 9% on general purchases. I know it says... blah blah blah raise by 6.625%... the effective taxes in the metro area are as I stated them. Sometimes higher. In nearby Kansas food is taxed at the same rate as other purchases, almost 9% (in grocery stores).

 

[Mulligan]

I realize this isn't perfect but I looked up Missouri and the taxes on food and other purchases are wildly out of date. It makes me nervous about the data.

"4.225% (prescription drugs exempt; food is taxed at 1.225%) Cities and counties as well as special taxing districts (such as fire districts) may impose a local sales and use tax that may raise the total tax by about 6.625%."

The real sales tax in Kansas City is over 4% on food and nearly 9% on general purchases. I know it says... blah blah blah raise by 6.625%... the effective taxes in the metro area are as I stated them. Sometimes higher. In nearby Kansas food is taxed at the same rate as other purchases, almost 9% (in grocery stores).

Sales taxes in Mo are almost impossible to generalize. If you stay out of the 2 major metro areas you generally run under 7% for your purchases along with the prescription exemption and lower food (but not restaurant). However, you can get over 10% in certain areas, and there is no sign warning you. Some businesses have their own "taxing district" which is simply a one building district, using the special sales tax to help restore the property. Outstate MO, is very anti tax, metro areas will approve a lot. Everybody picks on smokers, but just last fall the state rejected an increase on taxes on cigarettes only even though I believe to be the lowest in the nation. Metro areas passed it, but the Outstate swamped it by a 7-3 margin to narrowly deny the passage.

 

[Mulligan]

I was wondering about this. It seems lots of people on this board are very financially savvy. If so why is not everyone on this board that are in ER not int FL or NV. I was thinking of these two places for my ER but also places like PA (which does not tax 401K and SS) might work as well. Is it somehow cost of living in FL is relatively higher then I thought. Of course any place is better than NY where I live. Once our child is in college we are out of here.

You really have to dig deep to determine the effectiveness if you are moving only for taxes and cost of living. I initially considered moving to NV for the income tax reason in retirement as I have a nice pension. However the total math did not add up. First of all, I have a partial tax exemption to begin with here. Second, my health insurance was going to be almost triple what I was currently paying in the individual market. So already, I was money behind, and then their sales tax is generally higher, along with property tax, per where I am currently living. I may eventually move out there, but it won't be to save any money.

 

[imoldernu]

You really have to dig deep to determine the effectiveness if you are moving only for taxes and cost of living. I initially considered moving to NV for the income tax reason in retirement as I have a nice pension. However the total math did not add up. First of all, I have a partial tax exemption to begin with here. Second, my health insurance was going to be almost triple what I was currently paying in the individual market. So already, I was money behind, and then their sales tax is generally higher, along with property tax, per where I am currently living. I may eventually move out there, but it won't be to save any money.

+1

 

[FANOFJESUS]

The state seem to get their money one way or another maybe cost of living is the best thing to look at not taxes. Is there any truth to this?

 

[Amethyst]

The highest quality of life I can afford; that's what I'm looking for once I'm no longer tied to a place by a job. Low income taxes might be offset by lesser quality of life, by our standards.

Also, the $ cost and nuisance cost of selling and moving can be quite high.

Amethyst

 

[sengsational]

Here's a link posted recently in another thread that will estimate your taxes (as opposed to a general rate): http://www.tax-rates.org/income-tax-calculator?action=preload

I agree that moving just to get lower income tax rates should not drive the decision, but when I looked at how much of my money I'd give up over 40 years, it REALLY added-up. The benefit from Roth conversions was trivial compared with jumping over to SC (same metro area). Last kid graduates HS in a few weeks, so that's the biggest anchor gone.

 

[DeborahB]

Sales taxes in Mo are almost impossible to generalize. If you stay out of the 2 major metro areas you generally run under 7% for your purchases along with the prescription exemption and lower food (but not restaurant). However, you can get over 10% in certain areas, and there is no sign warning you. Some businesses have their own "taxing district" which is simply a one building district, using the special sales tax to help restore the property. Outstate MO, is very anti tax, metro areas will approve a lot. Everybody picks on smokers, but just last fall the state rejected an increase on taxes on cigarettes only even though I believe to be the lowest in the nation. Metro areas passed it, but the Outstate swamped it by a 7-3 margin to narrowly deny the passage.

Yes - it's quite a nightmare!

 

[haha]

I was wondering about this. It seems lots of people on this board are very financially savvy. If so why is not everyone on this board that are in ER not int FL or NV. I was thinking of these two places for my ER but also places like PA (which does not tax 401K and SS) might work as well. Is it somehow cost of living in FL is relatively higher then I thought. Of course any place is better than NY where I live. Once our child is in college we are out of here.

If you move from NYC to Las Vegas you will understand.

 

[truenorth418]

If you move from NYC to Las Vegas you will understand.

One of my favorite topics: where to live?

I have been retired for about 1 1/2 years. I currently live in NYC, but I could live anywhere, and so I have given this topic a lot of thought.

The biggest factor for most NYC residents vs. other places is cost of housing. Since I own my home free and clear and I live in a small space, this is not a huge issue for me. In fact, carrying costs and property taxes might be higher in another city.

Health insurance is also way more expensive in NYC than most other places, but Obamacare should help address this. It looks like I would qualify for the subsidies.

In some ways NYC is less expensive than other places. Although I own a car, I really don't need one. When I was working, I commuted to the suburbs and my car expenses approached $8k/year after taxes. Now I hardly ever use my car and my auto-related expenses are less than $2k annually. Like most people in Manhattan, I tend to use public transit or walk everywhere.

Income taxes are a big consideration. Under NY state laws, dividends and cap gains are taxed at ordinary income tax rates, and NYC has a city income tax in addition to the state payment. I live off of investment income, so this is a big deal. My combined city and state income tax rate is about 10%. Not having to pay this would free up cash for more vacations and fun - or even just more piece of mind and flexibility if the market craters.

I have been considering relocating to FL, TX, or NV, and I am preparing a side by side comparison of all factors. I like NYC, but I would also like to see what else the world has to offer. Everyone's priorities are different. (Note to Ha - I actually think Las Vegas has a lot going for it. A topic for another thread I guess LOL!)

Net net, financially there would be some modest savings in moving from NYC to a lower tax location. These are not a big deal in the short run, but they would certainly add up over time. Measured against the "costs" of leaving friends behind, proximity to family, and some lifestyle issues, it is a tough call for now.

I plan to make the most of the summer in NYC and make a decision later this year.

 

[kmt1972]

If you move from NYC to Las Vegas you will understand.

I hear you. I been to NV for business reasons a couple of times. I suspect I woulld not be able to convince my wife to live there. But what about FL. I been to Palm Beach and that looks like nice place. I guess it might be a bit hot in the summer but the beach would be nice. I am also of the opinion that as we get old living in warmer climates would be better for our health.

 

[Amethyst]

That's why better-off Floridians maintain summer homes in the mountains.

A.

I But what about FL. I been to Palm Beach and that looks like nice place. I guess it might be a bit hot in the summer .

 

[Andre1969]

I have a friend whose parents spend the winter in Florida and the warmer months back at their original home in Michigan. Most of their family is back in Michigan though, so when the parents get old enough to where they can't make the drive anymore, they're planning on giving up the place in Florida and staying full time back in Michigan.

As for me, I live in Maryland, which according to that income tax map is fairly high, with a median tax intake of $1144 (I wish...I had to cough up $6063 for 2012, although that did include state and local taxes as well). But, for all the horror stories of high taxes in places like NJ, CA, and NY, I thought the numbers would be worse. Of course, those numbers are simply averages, and probably affected greatly by people on various welfare programs.

And, there's more to the tax story than just income tax. As the original post brought up, there's sales tax, property tax, etc.

In my case, Maryland's sales tax is 6%, but excludes food items (unfortunately, beer isn't considered a food item.) My property taxes were around $3100 last year, which I don't find too horrible. Like others have mentioned, there are so many other variables, other than taxes to consider. Family, friends, things to do, climate, and so on. When I retire, I know I'll enjoy traveling about, but I don't know if I'm ready to give up on Maryland as my home base. Plus, the house I live in has been in the family practically since the dawn of time (Grandmom's Uncle Luther built the original part of the house in 1916, but I'm sure the land was in the family long before that), so giving it up would feel like losing a piece of my history.

I have fantasized about getting a second home somewhere warm, when I retire. But, in the long run, it might be easier to just rent a place for a month or two, rather than get tied down.

 

[killingme]

See that's the difference, we live in an 1800sq ft colonial and drive older cars and or local property tax bill is $7800 a year. Layer in one of the highest gas taxes, state income tax, and taxes on everything from soup to nuts, my family even asks why we would stay here. I see them about a half dozen times a year which I could still do from somewhere else.

What makes it worse is we are settling a relatives' estate down in central Virginia...bigger house with city utilities in a nice neighborhood and the taxes are $1700/yr. That's a BIG difference!

 

[cj]

I was looking for a thread like this - re: taxes & moving. DH & I have been discussing the subject a lot lately. We live in Maryland and we are conservatives, so we are really annoyed at the liberals and their ever-increasing propensity to tax everything they can (have you heard of our new "rain tax"? And the gas tax is being raised 20 cents over the next few years). But it's the 7.5% tax on all of our retirement savings that has us ready to bolt. We are close to the PA line where retirement is not taxed at all, so it would be an easy move to make a 7.5% return on our IRA/401K money. But we have been looking at all the pieces - the cost and hassle of moving, and the fact that we really love our current over-55 neighborhood, our neighbors, and our house. If we moved just over the line, we would still be close to family and friends.

DH still wants to work for another year or two, so we don't have to decide yet, but the subject comes up a lot. Do we stay where we are happy and comfortable, and just grit our teeth when we pay the 7.5% on every withdrawal? Or move to a place we might or might not like as much to save the taxes, which will add up to a LOT over the next 20-30 or more years? We'll see!