Request for Advice on Pennsylvania or Delaware Real Estate and Early Retirement

[nico08]

I live and work in New Jersey. I currently rent. As you may know, real estate and property taxes are very high in New Jersey. When I am ready to retire early, I have been thinking about buying a residence in Pennsylvania or Delaware, where the cost of living is I believe, on average, lower. My relatives and friends will still probably be in New Jersey, so I would like to stay within driving distance to NJ. I have some questions for you:

1) Do you think the average cost of living would be lower in Pennsylvania and/or Delaware?

2) Do you think I could find a modest single family home or a townhouse in Pennsylvania or Delaware in the $200,000 to $250,000 range?

3) I have been thinking of the Rehoboth Beach area in Delaware, the Poconos in Pennsylvania, or a suburb of Philadelphia in Pennsylvania. Do you think these are good early retirement location choices? If not, can you recommend other cities in Delaware or Pennsylvania that are a reasonable commute (about 3 hours one way) to NJ and that meet the requirements that I have identified above?

Thank you for your advice.

 

[aaronc879]

Something like this?
50 Bryan Drive Rehoboth Beach DE - Homes for Sale and Real Estate - MLS #579526 - Realtor.com®

Go to Realtor.com to find more.

 

[Delawaredave5]

I'd guess both PA and DE are cheaper than NJ - but neither are known as "retirement havens"... Lot depends on if you want to live near shore (Rehobeth) or city (Philadelphia) or mountains (Poconos).

PA does not tax private pensions, DE does. RE taxes are cheap in DE vs PA and NJ.

Kiplinger.com

 

[rescueme]

PA does not tax private pensions...

Nor Social Security benefits or any type of public pensions. Neither does it tax distributions from 401(k)s, IRAs, deferred-compensation plans or other retirement accounts.

I can't speak of somebody moving in to PA and drawing from their TIRA's or 401(k)'s. While I don't get taxed in retirement, I did pay state/local tax on my contributions during my wor*ing years (I don't pay for any gains accumulated over many years). A person moving into the state probably did not get taxed on their contributions and now could possibly bypass both on the contribution and withdrawl phase. I don't know what the rule would be for somebody just moving here to retire. BTW, to bypass state/local income tax on retirement sources, you must be 59.5.

We have a lot of folks that moved from NJ/NY in the past decade+ but that has slowed down due to the cost of travel from PA (no train service, but bus transport). However, if you are retired and no longer need to travel to NY/NJ for a j*b, that's not a problem.

If you want to see what houses were sold for recently, you can always use Zillo to pick a town.

Here's another resource for taxes:

http://retirementliving.com/RLtaxes.html

 

[Andre1969]

I have a friend whose parents retired and initially moved to PA, just above the Maryland border. Shrewsbury, I think it was. Fairly modest house, and cheaper than Maryland, but property taxes were still a killer. A couple years ago they sold that place and moved to Delaware, but not sure where, in DE. Bigger house, similar price, but the property taxes went way down.

I dunno how true this is, but I've heard cancer rates are pretty high in Delaware. At least, that's what my cousin's boyfriend said, and he quoted that as one of their main reasons for moving from Delaware back to MD. I have a feeling that being out of work, and having family to move in with probably had more to do with it than cancer rates though.

 

[Amethyst]

We visit the Lewes/Rehoboth Beach area nearly every year and have driven through neighborhoods of modest homes like this one. Also, I know a couple of retirees from Maryland who have settled in this area, and like it very much.

Of course we ourselves do not live in this area, so there may be drawbacks we know nothing about, but I will say that these neighborhoods give a good impression - well cared for, etc. The beaches are lovely, too.

As for property taxes, you'd want to check the state and county property tax assessors' web sites for any area where you are considering moving. I did check, a while back, and thought the property taxes were rather high. I figured this was because DE has no state sales tax, and exempts Social Security income from state income tax.

Amethyst

Something like this?
50 Bryan Drive Rehoboth Beach DE - Homes for Sale and Real Estate - MLS #579526 - Realtor.com®

Go to Realtor.com to find more.