Geezer magnets for wealth & tax costs

[Nords]

Scott Burns uses the term "Geezer Magnets" for states that attract retirees. I think he puts Nevada near the top of his list.

Bloomberg Wealth Manager recently ranked "wealthy friendly" states, where Wyoming & Nevada were #1 & #2. In what may be a huge surprise to many outside of the state, Hawaii is ranked #1 for retirees' low tax burdens. This takes into account state, locality, property, and sales taxes as an overall package for different income levels.

Bloomberg's 10-page PDF, with huge bloated graphics that took a minute to load even at cable-modem speeds, is at http://wealth.bloomberg.com/wealth/0604/jun_ft_states.pdf . (Nice surf photos, but I don't think they were taken in Hawaii!) A quick-loading summary is in a local newspaper at http://starbulletin.com/2004/05/27/editorial/editorials.html .

 

[John Galt]

Re. "nice surf photos, not from Hawaii", my son was
visiting the Tetons. (Beautiful area - Cut-Throat will confirm this)

Anyway, he made conversation with a photographer
who was here taking pictures for a European ski/
travel publication. Apparently they decided they did not
have any mountains in Europe that looked that good,
soooooooo...............

John Galt

 

[johnblake]

The photo of the wave looks Hawaiian, but the surfers don't wear wetsuits here. Stock photographs for sure.

Hawaii #1 for wealth friendliness? I don't think so.

Income tax is 8.25%, and we have a 4% excise tax on goods and services. Generally, the cost of living is very high. Regular gas is around $2.70/gallon, and a 900-1200 sqft shack costs about $400,000.

Realestate taxes are low, but this just encourages wealthy Californians to buy vacation homes here, and further drives up the cost of housing.

It's unfair to compare realestate taxes in Hawaii vs. Wisconsin. A $2,000,000 home in Hawaii, probably costs about $300,000-$500,000 in Wisconsin. No reasonable difference in realestate tax will make up for that differential.

Having said that, there are many advantages to living here, especially if you enjoy the ocean, beaches, and warm weather. Wealth-friendliness is however a major drawback.

 

[uncleharley]

I think you are close on the differences in real estate prices John. A person can still find those 1,000 sq ft sheds out in the boondocks for under $100,000.00 in Wisc. I still think Wisconsin is a bit high on tax's though.

 

[John Galt]

I lived in Wisconsin for years and the taxes did seem high, but the politics bothered me even more.

Re. "the boondocks" , that's where we like to be,
so it's really a no-brainer for us to hold down
housing costs. In our subdivision there must be
20 homes/cottages with water frontage. Very few would command over $100,000. The last several that
sold went for between 55,000 and 95,000, with
100 feet of water frontage. And these are not fixer-uppers! Of course, we do live in a flood plain.
That tends to hold down prices a bit.

John Galt

 

[Nords]

Re:  Gotta live outside Hawaii to appreciate it.

JohnBlake,

I've paid taxes in PA, CO, VA, MD, FL, NY, SC, CA, & now Hawaii. I'd much rather pay HI taxes, especially property taxes. The excise tax is a pain but it's still a lot lower than many Mainland areas (especially when you add in the infamous "locality" taxes).

Where are you paying $2.70 for gas? Not on Oahu, I hope. CostCo is full of cars at about $2.00-$2.10. At those prices, our total annual gas costs are less than any other state we've lived in (despite their lower prices) because we drive a heckuva lot less. Add in the savings on utilities, clothing, snow removal, car (winter) maintenance, Mainland's rising milk prices, and all the other things I don't miss about winter, and Hawaii is not as expensive as it seems. Surfing without a wetsuit is just a bonus!

I don't know if I'd be saving much at $2.70/gal, though.

I see Oahu trophy homes being bought by non-residents, but I see even more neighborhood homes being bought by locals trying to upgrade on the leverage of low-interest mortgages. A couple of local realtors say the same but I don't know if that trend is statewide. It'll certainly be interesting to watch what Oprah does with Thompson Ranch.

John Galt, waterfront property seems nice until you factor in beach/riverbank erosion (or, on some Pacific atolls, global warming). I'd favor a long walk or a short drive to stay at least a half-mile from the waterfront.

I was driving around Cincinnati a couple years ago and couldn't believe all the great waterfront property along the Ohio river. Most of it was occupied with rusted-out derelicts (cars, houses, AND humans) & other trash. I was mentally totaling the potential profits of scooping up all this cheap real estate until I saw the high-water mark at the 1930s flood memorial-- over 29 feet, which was well above the roofline on these two-story shanties...

 

[John Galt]

My heavy reliance on waterfront property came about
quite by accident. I recall back in the 80s I owned
about 6 properties of various types, all waterfront,
and it was not planned. It turned out
just fine as I have since sold all of it. Now, we live on the water but our other stuff (although nearby big water) is not
actually waterfront. Anyway, re. erosion, flooding etc,
these can be concerns but we never really suffered
any loss. I even owned a couple of islands at one time
and lots of stuff in the flood plain. The area we live in now
has been very "hot" lately for sellers. Having affordable
and scenic waterfront property within easy drive time
from Chicago is a big advantage.

John Galt

 

[johnblake]

Nord -

I was driving around Maui yesterday and noticed the gas prices are generally $1.65 (regular), $1.75 (plus), $1.85 (premium). Gas on Maui is significantly higher than on Ohau.

I'm not complaining that taxes are too high in Hawaii. Actually, I believe that property taxes should be higher.
(tax rate is now $3.55 per $1000 assessed value.

I just don't think of Hawaii as a 'wealth friendly' place -- especially for high earners, low spender types like myself. The reason is that the cost of living is very high, and taxes are middle of the road. I moved here WA state and found that the cost of living is significantly lower, and so are the taxes.

People look at our property tax rates and the 'wow'! But as I said before, a decent house here on Maui costs over $500K.

 

[Bruce]

I live in Rhode Island, and I was not surprised to see that we were in 51st position in this survey. I am seriously thinking of leaving this state when I retire because of the high housing, land prices and the high tax burden. I just whipped out a spreadsheet and computed the difference between what I would pay in Rhode Island on a 50,000 retirement income and what I would pay in Wyoming (which was number on on this survey).

Just using some of the more common taxes it would be 8% cheaper for me to live in Wyoming than Rhode Island (or to look at it in another way, I could live for one month "free" in Wyoming.

The taxes I used were the sales tax (7% vs 4%), the gasoline tax (31 cents vs. 14 cents) and the property tax (1.63% (Johnston) vs. 1.2% maximum in Wyoming)

I wish there was a calculator that took all the taxes into consideration. I probably would save more:

Electric tax
Telephone tax
Cellphone tax
911 tax
Water tax
Sewer tax
Local restaurant tax (1%)
Property tax on auto's (it was being phased out but this was frozen as it was costing the government too much money.

And so on; they nickel and dime you to death. :

In addition, the car insurance would be lower since Rhode Island is such an urban area.

In addition we have on of the highest electric rates in the country.

In addition, we have the same emmission requirements as California, so this drives up the cost of purchasing a vehicle.

Plus Rhode Island always ranks very high in the state with the most corruption.

So even though my quick calculation showed 8% savings, it is possible that my savings could be closed to 10 or 12%!

Any thoughts?

 

[BusyMom]

I'm in mid-MO at this time with housing and cost of living very affordable....in some areas. Rural/suburban houses on 3-20 acres, nice house, usually around 2000 sf. AND with that testosterone-magnet outbuilding...prices range from $100K to $150K. I just appraised a 200sf 4 BR/2BA house, barn and outbuilding...good ground...that was under contract for $128K. Drive an hour northeast and raw land goes for $15K/acre...but out here...$2-3K/acre. We're 30 min. from 2 larger towns, pop.40-70K, and about 2 hrs. from downtown St. Louis....I see lots of people from St. Louis buying hunting ground out this way....LOTS of mcmansion owners selling and downsizing. Of course, if you want to spend $200K on a 900sf A-frame, there's a place nearby...oy.

 

[John Galt]

Hello Bruce. Man, I can't believe that Rhode Island
is more corrupt than Illinois. I always thought Illinois was in a class by itself.

There are lots of rural areas not too far out where
land and homes look cheap to big city dwellers. That
is why a large percentage of our subdivision is owned
by folks from the Chicago area. Very scenic water front
cottages for under 100K. My Dad just sold a partly
improved half acre lot (beautiful spot) with 100 ft. of frontage for $30,000. You go an hour east
(toward Chicago) and try to find one of those.

John Galt

 

[cute fuzzy bunny]

The other problem with RI is that many noname small countries could kick your butt in a war.

 

[johnblake]

The northeast lifesytle is very different than out west. I'd consider that before $ considerations.

You'll probably drive considerably more miles (in less traffic) out west. In the northeast, a 300 mile trip is far. Out west, it's close.

If you like the northeast lifestyle you shoud consider NH (#12 for wealth friendlines). You'd stilll be a short drive from boston.

 

[sgeeeee]

The other problem with RI is that many noname small countries could kick your butt in a war.

Small countries? Heck, a street gang from Toronto could probably kick their butt.

[notice how I managed to insult both our Canadian and RI members with a single sentence?]

 

[cute fuzzy bunny]

Hey RI isnt that far from the canadian border. Those bastards are trying to annex carribean islands. Can Rhode Island be that far behind?

 

[Bruce]

I am not a typical Rhode Island. A typical Rhode Island thinks a 10 minute drive is to far. No place in Rhode Island is more than 30 minutes from the center of the state (except for Block Island and only because you need to take a ferry). Many people in Rhode Island have never traveled to any other cities in their own state. I had a friend who lived in Woonsocket (in the northern part of RI) and had never seen the ocean (40 minute drive) until I took him.

As for the Canadians, Rhode Island has a very large French Canadian population, mostly from Quebec. Most of these Canadians came down to work in the textile mills over 100 years ago and their ancestors have stayed on here. When I was growing up in Woonsocket, more people spoke French than English.

Rhode Island has one of the highest population densities of the United States - 1003 persons per square mile. Because of this a good lot to build a home can cost $50,000 an acre or more. Of course most of the best buildable land is already taken. There is a lot of ledge and swamp land. And if you enjoy Astronomy, forget Rhode Island because between the light pollution and the constant clouds and storms there is not much you can really see.

The longer drives do not bother me, it is more important I find a place where I can retire and do the things I like to do. I do want to have a good size piece of land - say at least 10 acres. (I think part of the reason I want a big piece of land is that I grew up on a dairy and horse farm (in Rhode Island) with about 100 acres - and it was great with the open land and the wildlife and the trees. And it was all buldozed to make parking lots and commercial buildings - What a waste.

New Hampshire is nice and it is an option, but it can become overcrowded with the tourist crowds in the summer and winter - however there are still a few places there off the beaten path!

All I have been told by my spouse that where ever we move, we have to have four seasons - so this knocks out most of the southern United States. (Its too bad too because I really liked the White Mountain region of Arizona which would be too hot)

 

[Skylark]

Take a look at Traverse City, Michigan. Or the towns along the Lake Michigan coast north of there.

 

[John Galt]

Ah............. Traverse City, Mich. What a great place! I used to
live there (I know what you are thinking. No I have
not lived everywhere...........it just seems that way)
Anyway, it's a beautiful spot and the coast north
is just as pretty. Really fabulous. Alas, there is that pesky thing called winter. Seemed like it lasted
forever.

John Galt

 

[yakers]

I know I like 4 seasons too but one thing folks from the wet heartlands forget to tell you is that they have more than 4 seasons. In addition to the ususal 4 there is also misquito season, black fly season, deer fly season and a few more. I'm a Chicago boy (now living in California) but that seemed to be true of Michiigan, Wisconsin, Minnisota and the like whenever I visited one of their lake areas, which is most of the area of those states.

 

[John Galt]

Yakers is absolutely right and I should have mentioned
it. Along with the gorgeous areas, woods and water,
you also have a whole variety of pesky critters trying
to suck out your bodily fluids. When I lived in northern Wisconsin, for most of the summer before we all went to
bed I actually had to patrol the entire house (large ranch) and swat mosquitoes on the walls. This was
every night and you could not go outside without
spraying yourself down, for much of the year. So, this
is another downside in addition to the brutal winters.
When I first moved to north Texas, I hardly ever saw a
mosquito, and when I did I just laughed. They were
about 1/5 the size of a Minnesota mosquito in its prime.
Texas does have its share of pests (fire ants, etc.).
Nothing like Minn/Wisc/Michigan though. One more thing
about the winters. In the Upper Peninsula of Michigan,
along Lake Superior, the snow drifts so high it reaches
the rooftops of the houses. They quite literally run out of room
to put the snow.

John Galt

 

[cute fuzzy bunny]

you also have a whole variety of pesky critters trying
to suck out your bodily fluids

John...c'mere...I have something to put on the back of your neck...

 

[John Galt]

Well TH, Northern Wisconsin mosquitoes are almost that
big. We are still missing a small dog from the time we lived up there

John Galt

 

[Martha]

I have lived only in Minnesota and Wisconsin. I just came back from a road trip from California though the southwest to Minnesota. On the way back our dogs got bit by fire ants and almost killed by a snake. And they kept getting these little sharp burrs in their feet. I'm sorry, but the southwest was brown, hot and and not much fun in early July.

It was so nice to come back to 70 degrees and green, green everywhere.

Martha

 

[unclemick]

Reminds me of one of my early posts - on the 'perfect retirement spot' - response was almost as many places as there were posters to the topic. I was amazed.

 

[John Galt]

Well, unclemick, there are a lot of places

John Galt