retirement tax strategy and where to live

[Gumby]

How about Juneau? It seemed quite nice when we were there (although it was in July).

 

[Brat]

It has been about 12 years since I visited - business trip.

Juneau is cute, IMHO, but I hear housing can be quite expensive. I think it would be a great place if you like boating. Maybe find a cabin with a secure tie-up - call it home. Spend the summer around the inside passage on the boat, sail south to Baja before the seas get rough. While in Baja arrange for any boatyard service you think you'll need.

If I weren't a boater or didn't have family or business there I would get bored quickly.

 

[neo]

Here is the data for main cities across the US compiled for $75000 income..
This includes all taxes including property. (2003, data compiled by DC)

Interesting numbers - by "DC" do you mean the fed gov? What agency/report, and do you have a link?

 

[perinova]

The data is collected by the Government of the District of Columbia
http://cfo.dc.gov/cfo/cwp/view,a,1324,q,612643.asp

 

[Brat]

At the "Lucia" forum I sat next to a guy who lives in Olympia WA, has lived all over the US, moving there from TX. I asked him how his living expenses compared. He said that living in Olympia. WA beat them all when you considered utilities, taxes et all. He paid more for his home, but he consumed little for heating or cooling. Local taxes reasonable. For what it is worth... and PLEASE, don't everyone move to WA.

 

[neo]

At the "Lucia" forum I sat next to a guy who lives in Olympia WA, has lived all over the US, moving there from TX. I asked him how his living expenses compared. He said that living in Olympia. WA beat them all when you considered utilities, taxes et all. He paid more for his home, but he consumed little for heating or cooling. Local taxes reasonable. For what it is worth... and PLEASE, don't everyone move to WA.

Having just moved out of WA (east of Seattle area) after 15 years, I'd have to disagree slightly with a couple of points - I don't know how anyone could get by with "little" heating bills (cooling yes) unless they just like 40 deg. damp for 8 months. And r.e. taxes may seem "reasonable" compared to TX (as would most other places), but not reasonable by my definition. A King county judge recently overturned a prop. tax limitation ballot initiatiive that had been passed overwhelmingl several years ago (2001 I think). (It's very common for King county judges come up with a technicality so they can throw out ballot measures that have been passed by large margins, especially measures that would limit taxes in some way. And lets not even mention how the mostly Dem. judges of the state supreme court ruled to allow the votes in the last gubernatorial election to be repeatedly re-counted until the Dem. candidate could somehow come up with a tiny majority.)

 

[2B]

I went to junior/senior high school in Des Moines and college at UW. The living remnants of my family are spread out between there and Bellingham except for me, the lone Texan. Knowing their approximate incomes makes me believe the overall cost of living can't be too high. They all seem to be doing fine on their much less than my income but I know they aren't saving anything for retirement let alone ER.

DW and I have discussed retiring there. I think the Olympia area is beautiful. It's even more temperate than Seattle and it's frequently referred to as the "banana belt." I can't imagine anyone retiring in Seattle.

 

[Brat]

The NW has lots of micro-climates. I live on a small island where the south end is warmer and sunnier than the north. There are 'cuts' in the Coast Range. Those who live east of those cuts get hosed in the winter.

 

[unclemick]

hmmm

Born and raised - 26 yrs, toss in the relatives - Kalama, Kelso/longview, Everett, Seattle, Kent, Auburn, Whidbey(Oak Harbor) and possibly a few I've missed.

Kansas City for me - at least for yr 13/14 of ER.

Washington State is a great place - to be from and visit in summer.

May get back to the old sod when I get 'old' - my sister is talking it up now that they're back (from Kentucky).

heh heh heh heh heh

 

[CyclingInvestor]

How about Juneau? It seemed quite nice when we were there (although it was in July).

Or even a bit further south, in Ketchikan. I have spent a few vacations there
(all seasons) and while it never really gets warm, snow is much less, housing is
quite a bit less then Juneau. Plus, it is only a 37 hour ferry ride from Bellingham
if you get tired of flying), which is actually kind of fun.

 

[perinova]

I added the cost of a high deductible health policy to the list for comparison. The data came from tnhis.com.
And woa bye bye New Jersey -Local Taxes + HealthCare = 34% of $75K.
Hello Florida: Only 8%.

***************

Rank Income Property Sales Auto HSA Policy Total %of75k Index
1 Newark NJ $1,041 $8,581 $971 $296 $14,928 $25,817 34% 2.5
2 NewYorkCity NY $5,020 $3,928 $1,265 $277 $8,808 $19,298 26% 1.8
3 Burlington VT $1,640 $3,971 $890 $305 $12,120 $18,927 25% 1.8
4 Boston MA $3,318 $3,448 $597 $516 $10,872 $18,750 25% 1.8
5 Providence RI $1,613 $6,144 $1,052 $918 $7,500 $17,227 23% 1.6
6 Bridgeport CT $2,665 $8,605 $1,112 $890 $3,108 $16,380 22% 1.6
7 Portland OR $4,842 $4,145 $0 $287 $3,900 $13,173 18% 1.3
8 Atlanta GA $2,521 $4,029 $1,328 $383 $4,848 $13,109 17% 1.2
9 Portland ME $3,083 $3,258 $888 $560 $5,160 $12,949 17% 1.2
10 Philadelphia PA $5,242 $3,197 $977 $341 $2,172 $11,929 16% 1.1
11 Charleston WV $3,232 $1,395 $1,141 $577 $5,436 $11,780 16% 1.1
12 Chicago IL $2,010 $3,574 $1,584 $622 $3,696 $11,486 15% 1.1
13 Washington DC $3,913 $2,157 $1,131 $392 $3,552 $11,146 15% 1.1
14 Louisville KY $4,826 $1,713 $1,047 $367 $3,144 $11,098 15% 1.1
15 Baltimore MD $3,870 $3,598 $1,144 $311 $2,160 $11,083 15% 1.1
16 LosAngeles CA $1,345 $4,426 $1,180 $536 $3,528 $11,016 15% 1.0
17 Manchester NH $0 $4,399 $461 $398 $5,628 $10,887 15% 1.0
AVERAGE $2,845 $2,836 $1,194 $440 $3,264 $10,843 14% 1.0
18 SaltLakeCity UT $3,348 $1,904 $1,341 $561 $3,624 $10,777 14% 1.0
19 Milwaukee WI $2,993 $3,948 $1,096 $403 $2,208 $10,647 14% 1.0
20 Omaha NE $2,517 $2,823 $1,309 $489 $3,492 $10,630 14% 1.0
21 Indianapolis IN $2,788 $2,856 $1,073 $209 $3,588 $10,513 14% 1.0
22 Minneapolis MN $2,936 $2,582 $997 $447 $3,528 $10,490 14% 1.0
23 Detroit MI $4,292 $2,570 $1,006 $389 $2,160 $10,417 14% 1.0
24 Honolulu HI $3,399 $1,781 $824 $388 $3,936 $10,329 14% 1.0
25 Charlotte NC $3,314 $2,021 $1,207 $519 $3,252 $10,313 14% 1.0
26 Columbia SC $2,986 $2,214 $968 $601 $3,504 $10,273 14% 1.0
MEDIAN $2,901 $2,501 $1,144 $398 $3,264 $10,273 14% 1.0
27 NewOrleans LA $2,518 $2,231 $1,668 $382 $3,384 $10,182 14% 1.0
28 Boise ID $3,298 $2,176 $1,170 $399 $3,036 $10,079 13% 1.0
29 KansasCity MO $3,368 $1,595 $1,325 $517 $3,264 $10,069 13% 1.0
30 Birmingham AL $3,453 $988 $1,344 $396 $3,804 $9,985 13% 1.0
31 Albuquerque NM $2,172 $2,517 $1,415 $265 $3,444 $9,813 13% 0.9
32 OklahomaCity OK $3,178 $1,538 $1,533 $345 $3,012 $9,605 13% 0.9
33 Wichita KS $2,556 $1,309 $1,221 $597 $3,876 $9,559 13% 0.9
34 Columbus OH $3,936 $2,038 $1,128 $333 $1,812 $9,246 12% 0.9
35 Billings MT $3,118 $1,864 $0 $628 $3,540 $9,150 12% 0.9
36 DesMoines IA $2,978 $2,617 $1,197 $470 $1,812 $9,074 12% 0.9
37 Denver CO $2,354 $1,362 $1,215 $604 $3,204 $8,739 12% 0.8
38 Jackson MS $2,060 $1,971 $1,421 $745 $2,508 $8,705 12% 0.8
39 Wilmington DE $3,153 $2,416 $0 $276 $2,844 $8,689 12% 0.8
40 LittleRock AR $2,953 $1,648 $1,529 $464 $2,028 $8,622 11% 0.8
41 VirginiaBeach VA $2,901 $1,918 $1,136 $456 $2,064 $8,475 11% 0.8
42 SiouxFalls SD $0 $2,228 $1,406 $296 $4,452 $8,382 11% 0.8
43 Phoenix AZ $1,454 $1,248 $1,652 $429 $3,204 $7,986 11% 0.8
44 Seattle WA $0 $3,114 $1,415 $348 $3,060 $7,936 11% 0.8
45 Fargo ND $995 $3,111 $996 $314 $2,412 $7,828 10% 0.7
46 Anchorage AK $0 $3,058 $0 $150 $4,440 $7,649 10% 0.7
47 Memphis TN $0 $2,501 $1,830 $376 $2,424 $7,132 10% 0.7
48 LasVegas NV $0 $2,225 $1,026 $551 $3,168 $6,970 9% 0.7
49 Houston TX $0 $2,861 $1,426 $325 $2,256 $6,868 9% 0.7
50 Cheyenne WY $0 $1,108 $1,340 $451 $3,204 $6,103 8% 0.6
51 Jacksonville FL $0 $1,744 $1,158 $333 $2,448 $5,683 8% 0.5

 

[Nords]

I added the cost of a high deductible health policy to the list for comparison. The data came from tnhis.com.
And woa bye bye New Jersey -Local Taxes + HealthCare = 34% of $75K.
Hello Florida: Only 8%.

Will you be paying income tax or will you be ER'd, and what does that do the rankings? For example Hawaii hits income earners pretty good but doesn't tax pensions.

 

[neo]

50 Cheyenne WY $0 $1,108 $1,340 $451 $3,204 $6,103 8% 0.6
51 Jacksonville FL $0 $1,744 $1,158 $333 $2,448 $5,683 8% 0.5

What kind of house can you buy in FL with prop. taxes of only $1744?
(Cheyenne's prop. tax number I can believe, having lived there for awhile.)

 

[2B]

Will you be paying income tax or will you be ER'd, and what does that do the rankings? For example Hawaii hits income earners pretty good but doesn't tax pensions.

Nords, some of us PBs have most of our stash in taxable IRAs. My marginal tax rate will probably not change. I do agree that my taxes will go down because I won't be paying income tax that I am now on my social security/medicare payments.

Does Hawaii hit pensions and SS with income taxes? That's probably a big question when it comes to taxation.

 

[73ss454]

What kind of house can you buy in FL with prop. taxes of only $1744?
(Cheyenne's prop. tax number I can believe, having lived there for awhile.)

I'm moving to Fla. next month and have watched my taxes on a house I bought there 4 years ago go from 2800 to 8000. Once I homestead the taxes will drop a bit but not much.

I don't think you would want to live in the house with 1744 taxes. Not that taxes that low aren't a good thing I just think the house would not be what most folks would want.

 

[Nords]

Does Hawaii hit pensions and SS with income taxes? That's probably a big question when it comes to taxation.

No-- exactly. I know it's considered one of the nation's more tax-friendly states for retirees (sshhhh, we have scorpions too!!) and that these survey rankings included taxable incomes (presumably from paychecks).

 

[perinova]

Will you be paying income tax or will you be ER'd, and what does that do the rankings? For example Hawaii hits income earners pretty good but doesn't tax pensions.

Nords
I am looking at those issues to decide where to move in the prospect of ER. What I don't know at this time is whether I will still work (for some time) or not after the move. That much depends on the budget I think I can hold after the move. Today I am living in NJ so it is easy to find a better tax/health insurance treatment.

I will not have a pension so I haven't looked at this issue. I haven't looked at the Social Security exemption issue either but the earlier you retire the less it is relevant as SSI will be a smaller portion of income.

I think it is a very good point though and I started to look at that a bit this morning. I found this AARP document from 2000.
http://assets.aarp.org/rgcenter/econ/ib55_sstax.pdf
Not too easy to read and not too recent. (I anyone has a better document please provide a link.)

From the document: 15 states tax social security "to some degree":
CO CT IA KS MN MO MT NB NM ND RI UT VT WV WI

 

[perinova]

It just dawn on me that any tax treatment and health insurance laws may change very significantly in the course of a 40 years retirement. But anyway what choice do we have? This is completely unpredictable and we have to do with current information.

 

[Nords]

"Wealth Manager" magazine publishes an annual ranking of the most tax-friendly states. They break it down by both workers & retirees. The magazine was recently sold by Bloomberg to Highline Media but hopefully they'll continue the tradition.

Today I am living in NJ so it is easy to find a better tax/health insurance treatment.

It just dawn on me that any tax treatment and health insurance laws may change very significantly in the course of a 40 years retirement. But anyway what choice do we have? This is completely unpredictable and we have to do with current information.

With apologies to Brewer, considering that you're starting from NJ, going almost anywhere else is an improvment!

 

[perinova]

What kind of house can you buy in FL with prop. taxes of only $1744?

timo
I can't answer the question but remember that the above data relates to life in the largest metro area in each state (here Jacksonville). Not necessarily representative of the whole state.