Poll: Percentage of retiree spending on income + property tax

[Nature Lover]

Total taxes (Income + Ppty) were 26% of total spending in 2018; but total spending was 2x normal after home remodeling and upgrade projects. Excluding the projects from total spending, it would have been 52%. Like Calmloki, could raise style of living, but have no real desire to do so.

[footenote]

Property + income tax clocked in at 5.7% of total spending last year

[GrayHare]

This is the all-too-rare poll here in which the results actually take the shape of a bell curve! Congrats, W2R, on a well chosen range of poll choices.

[Cobra9777]

15% (including Roth conversions)
5% federal income tax (no state income tax)
10% property tax (very high in Texas)

13% (without Roth conversions)
3% federal income tax
10% property tax

2018 spend was higher than normal due to some home renovations. In a more normal spend year, taxes would be in the 17-18% range... same poll answer.

[RobbieB]

My income taxes (fed & state) are almost 10 times my property tax.

[foxfirev5]

2018 - 30%. 2019 - Approx. - 15%. It could range from 10% to over 30% depending on how much income I decide to take. The 10% minimum is basically property taxes on two homes.

[Bir48die]

8% state income tax. Property tax is limited thank goodness due to passed referendum. So maybe 12% total

[ABQ2015]

30% (20% federal income tax, 5% state income tax, 5% property tax)

I'm including federal and state income tax on my Roth Conversion. If not included, 29%.

[sengsational]

Ignoring PTC, I'm at 16%, with my city/county/state getting a bit over half of that, split equally between income and property taxes. So to go back to the "move to save taxes" thing, 1/4th is state income tax, so I could go to 12%, all else being equal (which, of course, it never is).


If I include PTC, it's (19%) (that's a negative tax rate). Ain't America great?

[Sconie]

17.6% Federal income tax, 3.6% AZ state income tax & 4.0% property tax, for a total of 25.2%.

[gooddog]

Primary residence being in California pushed us up over 30%. Calif state income taxes are just too high.

[jayanu]

0%.

Ok, let me explain.
I moved to CCRC (https://www.willowvalleycommunities.org/) and hence there is no property tax, no utility bills, no HOA condo fees/assessments, no fertilizing or cutting grass, cleaning the pool, no maintenance, etc.
Love
Jay Shah

[Independent]

Quote:

Originally Posted by USGrant1962 This is a common mental accounting error. Renters pay property taxes, it is part of their rent. They just don't know exactly what part it is. I see lots of comments about how homeowners have some tax advantage over renters, when it is exactly the opposite. Rent notionally includes the value of property tax deductions, plus deductions for maintenance and repairs that homeowners cannot deduct. Now, this is all modified by market-based rents, but that surely accounts for taxes and other costs among other inputs.

I don't think that's true. You picked up the fact that for landlords, the listed expenses are deductions, but you omitted the fact that rent is income.

Here's a mental experiment. Suppose my brother and I live in economically identical houses - same market value, mortgage, taxes, utilities, maintenance, and repairs expenses.

We decide to take advantage of this renter thing, so we sell our houses to each other. Neither of us moves, we just rent. The rent we pay is the out of pocket costs above plus $x. Now instead of doing my FIT as a homeowner I do it as a landlord and a renter. I think I paid lower FIT as a homeowner.

As a landlord/renter, I have a business profit/loss calculation. On that page, rent is income, all the listed expenses are deductions from that income, and I have a net profit of $x. Now I transfer that net profit to my personal return. Compared to my days as a homeowner, I now have $x of additional income and I've lost my mortgage interest and property tax deductions.

[meleana]

So what is the conclusion of this poll?

[jj]

Quote:

Originally Posted by meleana So what is the conclusion of this poll?

My conclusion would be that every (early) retiree is in a different situation depending on what state they live in and the composition of their income, and to some extent their spending.

I voted 5 - 9%. Our 2018 property taxes were $9,500 and we paid about $2000 FIT on $140,000 spending, for a total of less than 9%. However, our medical expenses were $38,500, what with private HI (without subsidy) and one of us meeting the deductible and a heavy dental year. After itemizing, which I didn't expect us to do this year, and the HSA deduction our income taxes were low. No state income taxes.

[Easy Rider]

silly poll - I'm actually in the top 1 percent on this one.

Fed, state and property tax was 9k,4k(California)and 4k to about 16k total. I only spent about 12k besides this.

Fed and state taxes where zero the last 6 years though ... until the pension kicked in.

[Offgrid Organic Farmer]

I do not think that any 'conclusions' are possible from this.

Someone says that they are paying 10% of their retirement income to taxes, but are you saying that they earn $100k and are paying $10k? Or are we saying that they earn $10k and pay $1k?

I have a military pension so I am not paying income taxes on my $19k/year pension.

My property taxes account for 4.5% of my pension or $850/year. I do not think that $850/year as bad since it gets me 150-acres of land and a huge house.

[mamadogmamacat]

7%, happens to be divided almost equally among property (home plus a piddling amount on my one old car), state income tax, and federal income tax. Would have been less than 5% if not for a lot of capital gains last yr, twice as much as usual in fact. Will also go down once I am 62, with another drop at 65, when most of the state income tax will be gone.

Thanks for the poll. Enjoy seeing the reactions. Seems like the more folks have to pay, the less they like the poll
Ain't human nature ridiculously predictable

[MarieIG]

I did not vote.

I am not retired, but did a ballpark estimate. We live in a HCOL/ High income tax/ high property tax area. Our biggest expense is tax; and our next biggest (single) allocation of income is saving for retirement. As we are still working, we are also paying SS tax and Medicare tax so all told, it was downright ugly

It will improve when we retire.

[MarieIG]

Quote:

Originally Posted by meleana So what is the conclusion of this poll?

That our beloved W2R has found yet another way to analyze her spending.