How much do state Taxes matter?

[sterlingmossy]

I am considering moving from Illinois to Either Wyoming or Utah. As far as I can tell taxes in Utah are around:

Park City
Property 0.46%
State Income 5%
Sales Tax 7.95%

and Wyoming:

Jackson
Property 0.67%
State Income 0%
Sales Tax 6%

All else aside, how much impact do you think this has on say 40 years of retirement?

 

[Ready]

I think it depends on how much income you are earning and how expensive a property you are planning on buying. But in general I would not recommend moving to a location based on taxes. You should live where you want to live and then work to minimize taxes as best as possible at that location.

 

[sterlingmossy]

I think it depends on how much income you are earning and how expensive a property you are planning on buying. But in general I would not recommend moving to a location based on taxes. You should live where you want to live and then work to minimize taxes as best as possible at that location.

Thanks. If it helps annual Income is $250k+ range and we are looking a properties around $1m

 

[exnavynuke]

I'm not sure I understand what you're asking... the obvious answer is "the place where you're paying more in taxes costs more to live there in taxes". The less obvious answer is "the total cost of living comparison is what matters for a fixed income, not just one piece of the equation (taxes)".

 

[Ready]

At that income level I can see why Wyoming would be attractive. But if your heart is set on living in Park City I would still live there and pay the taxes. You can see the difference in your finances by running Firecalc with two different expense levels - one with the state tax and one without. See what your 100% success numbers look like under each scenario. I suspect you will be more than fine either way.

 

[sterlingmossy]

I think it depends on how much income you are earning and how expensive a property you are planning on buying. But in general I would not recommend moving to a location based on taxes. You should live where you want to live and then work to minimize taxes as best as possible at that location.

This was my first stab at calculation

[url=https://flic.kr/p/EFYhnM]Picture1 by David Rabjohns, on Flickr[/URL]

 

[sterlingmossy]

At that income level I can see why Wyoming would be attractive. But if your heart is set on living in Park City I would still live there and pay the taxes. You can see the difference in your finances by running Firecalc with two different expense levels - one with the state tax and one without. See what your 100% success numbers look like under each scenario. I suspect you will be more than fine either way.

Actually my heart is set on Jackson and I am trying to persuade my wife to agree

 

[Senator]

If you are over five years away from retirement, keep looking. Your mind will change.

Look for access to healthcare, good weather and how far you will be to do routine shopping. That will have more of an impact than taxes.

 

[Ready]

Actually my heart is set on Jackson and I am trying to persuade my wife to agree

OK, now the full picture is coming together. You want to live in Wyoming, DW wants to live in Park City. So you built a spreadsheet showing how it will cost $12K more per year to live in Park City to justify your selection. And you were hoping the forum would tell you that state taxes REALLY matter in retirement to help build your case.

 

[sterlingmossy]

OK, now the full picture is coming together. You want to live in Wyoming, DW wants to live in Park City. So you built a spreadsheet showing how it will cost $12K more per year to live in Park City to justify your selection. And you were hoping the forum would tell you that state taxes REALLY matter in retirement to help build your case.

Exactly my friend, exactly

 

[sterlingmossy]

If you are over five years away from retirement, keep looking. Your mind will change.

Look for access to healthcare, good weather and how far you will be to do routine shopping. That will have more of an impact than taxes.

Thanks for the perspective. Looking to retire at the end of 2019. Want to have the location picked before then.

 

[sterlingmossy]

I'm not sure I understand what you're asking... the obvious answer is "the place where you're paying more in taxes costs more to live there in taxes". The less obvious answer is "the total cost of living comparison is what matters for a fixed income, not just one piece of the equation (taxes)".

I was trying to get a read on the total cost of the choice. perhaps my spreadsheet below will help.

The cost of living is similar for both places (neither is cheap).

 

[Big_Hitter]

how are the medical facilities in Jackson?

 

[Big_Hitter]

have you looked at Driggs, ID? I gather it is a much cooler ski town and closer to medical

 

[sterlingmossy]

how are the medical facilities in Jackson?

In its most recent release of Hospital Compare Overall Hospital Quality Star Rating, the Centers for Medicare & Medicaid Services (CMS) awarded St. John’s Medical Center (Jackson's hospital) its highest five-star rating. The last time the ratings were published, only 83 hospitals in the nation – fewer than 2% -- earned five stars. Of the over 4,000 Medicare-certified hospitals in the U.S., the average overall rating is three stars.

 

[sterlingmossy]

have you looked at Driggs, ID? I gather it is a much cooler ski town and closer to medical

Actually I have, great suggestion. I am liking Driggs for the cost of living and Grand Targhee gets great grades for the skiing. We plan to stop there on our way back from Park City at the beginning of April.

 

[HillCountry]

So why your wife want Park City?

Finance is only one factor when choosing retirement locations. Maybe not even the most important one.

And 250 expense does not equal 250 income.

Good luck.

 

[RenoJay]

I moved from CA to NV for tax savings about 13 years ago and never regretted it, but at the time my taxable income was very high so the numbers penciled out in an easy way.

 

[sterlingmossy]

So why your wife want Park City?

She thinks Park City will have more sunny days (actually 229 vs 212 or 8%).

Finance is only one factor when choosing retirement locations. Maybe not even the most important one.

Of course, I was just looking at Taxes today

And 250 expense does not equal 250 income.

Understood. I was quoting my projected post retirement annual income (as I believe that is what the income taxes will be assessed on).

Good luck.

Thanks

 

[Senator]

So why your wife want Park City?

She thinks Park City will have more sunny days (actually 229 vs 212 or 8%).

Minnesota has a lot of sunny days, unfortunately many of them are -20 degrees.

Look for the temperature too.

 

[sterlingmossy]

Minnesota has a lot of sunny days, unfortunately many of them are -20 degrees.

Look for the temperature too.

Average temp
Jackson 39.5
Park City 42.05

6% warmer. Shhhh don't tell my wife.

 

[stepford]

A digression (sort of on topic):

Coldest ski day I ever had was in Jackson. 25 below the night before and still about 15 below the next morning in the lift line. Fortunately the valley temperature inversion meant it was a balmy +5 at the top of the mountain. Good times, but unless I absolutely loved skiing all the time I might think twice about relocating to the icy winters of Jackson.

 

[Luck_Club]

OK, now the full picture is coming together. You want to live in Wyoming, DW wants to live in Park City. So you built a spreadsheet showing how it will cost $12K more per year to live in Park City to justify your selection. And you were hoping the forum would tell you that state taxes REALLY matter in retirement to help build your case.

Been there done that. I just added a line item for her hair!

 

[RunningBum]

I wouldn't put much weight on taxes. It sounds like you've got enough money to afford either. If not, housing costs are much more of a factor. And like someone said, is $250K really your taxable income in retirement? Remember, no tax on a Roth, and in taxable accounts you only pay on the gains, not the gross sale amount.

Driggs would be a lot cheaper, but you should spend a couple weeks there and imagine living there. There's actually a really nice grocery store, and a couple of good restaurants, but not a whole lot else. You're an hour to an hour and a half from any Walmart, Target, Home Depot, etc. Nearest airports are Jackson (a hard drive over a pass, from what I hear) or Idaho Falls, an hour and a half away.

Park City, on the other hand, has a lot nearby, and Salt Lake City is just down the hill.

I haven't been to Jackson, so I can't say what that'd be like to live in.

Depends what you want from these places.

 

[gerntz]

I am considering moving from Illinois to Either Wyoming or Utah. As far as I can tell taxes in Utah are around:

Park City
Property 0.46%
State Income 5%
Sales Tax 7.95%

and Wyoming:

Jackson
Property 0.67%
State Income 0%
Sales Tax 6%

All else aside, how much impact do you think this has on say 40 years of retirement?

Don't care what property tax rate is. Care what the size of the tax bill is.