Poll: Percentage of retiree spending on income + property tax

[W2R]

Retirees, what percentage of your total spending last year was due to income and property taxes?

This question was inspired by the thread on moving to another state for lower taxes.

I'm ignoring sales taxes and other taxes since it's easier to determine exactly what income and property taxes cost us.

YOU can define "retired" for this poll. If you aren't retired (in your opinion), or if the poll choices don't fit you for any other reason, there's a choice at the bottom for you if you wish.

 

[CardsFan]

About 16%, including personal property tax. Would be a lot lower if we did not do Roth conversions (maybe 5%?). But in 7 years, when we hit RMD's, I expect 25-40%.

 

[Doribe]

I estimate my income and property tax is about 25% of my income.

 

[W2R]

I estimate my income and property tax is about 25% of my income.

This poll has nothing to do with percent of income.

The question asked, is what percent of SPENDING was the sum of your income tax spending plus property tax spending, last year?

 

[Doribe]

This poll has nothing to do with percent of income.

The question asked, is what percent of SPENDING was the sum of your income tax spending plus property tax spending, last year?

My income and property tax are about 25% of my spending.

 

[davebarnes]

So, the original question should be about state income taxes?

 

[W2R]

So, the original question should be about state income taxes?

All income taxes (state and federal), and all property taxes (including school taxes).

 

[Dtail]

Voted 5-9% on expected 2019 spending, since didn't own a house last year, plus don't expect to pay any income taxes this year.

 

[pb4uski]

We are about 21%... 2018 federal and state income taxes and property taxes (including school taxes) for two homes in relation to total 2018 spending.

 

[jollystomper]

2018 was a "hybrid" year, as I retired at the end of June. Federal, state, and property taxes were 33% of our expenses. For this first full year of my retirement, we expect it to be between 16-20% of our total spending.

 

[USGrant1962]

Voted 5-9% on expected 2019 spending, since didn't own a house last year, plus don't expect to pay any income taxes this year.

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.

 

[pb4uski]

We are about 21%... 2018 federal and state income taxes and property taxes (including school taxes) for two homes in relation to total 2018 spending.

I also wanted to add that our federal and state income taxes are arguably discretionary.... absent our doing tIRA withdrawals or Roth conversions to the top of the 12% tax bracket because our tax rates are currently lower than what they will be once SS starts, our federal and state income taxes would be negligible... in effect we currently voluntarily pay federal and state income taxes because we think it is beneficial in the long run.

Omitting discretionary taxes would reduce our percentage to 10%.

 

[Retire52]

As far as post retirement taxes go, 2017 and 2018 were anomalies as I retired mid 2017 and lived abroad for portions of both years as well as cashing out nearly $200K in stocks for a home purchase in latter part of 2018 when I relocated to Florida...Steady-state tax percentage of overall spending will be approximately 5% going forward.

 

[audreyh1]

Voted 5-9% on expected 2019 spending, since didn't own a house last year, plus don't expect to pay any income taxes this year.

Confused since she was asking for 2018.

 

[Dtail]

Confused since she was asking for 2018.

Wasn't applicable for me in 2018, but was in 2019. For purposes of this poll, it is just another data point......

 

[CyclingInvestor]

25% (17% federal income, 6% state income, 2% property)

 

[Sunset]

As a percentage of spending money, it was 39%.

 

[Col. Klink]

This poll makes me glad to live in Florida... exactly 5% income + property taxes

 

[scrabbler1]

I have been in the 20%-30% range over the last few years. I would have pierced the 30% mark last year due to a big cap gains distribution at the end of the year, but that was offset by a second and unexpected state property tax rebate.


With more and more of my income falling into the 0% bracket in the last few years, my state income tax burden has been exceeding my federal one. Also, for expense purposes, I count the ACA subsidy as a reduction of my HI premiums, not a decrease in my federal taxes.

 

[DayDreaming]

I'm not sure what the poll results will reveal here since one's spending isn't really related to income taxes + property taxes.


For example my taxes last year were 16% of my total spending.
But if I had bought the new car I was thinking about, then my taxes would have been about 10% of my total spending.

 

[RunningBum]

I'm not sure what the poll results will reveal here since one's spending isn't really related to income taxes + property taxes.


For example my taxes last year were 16% of my total spending.
But if I had bought the new car I was thinking about, then my taxes would have been about 10% of my total spending.

It's for retirees. Income isn't that meaningful anymore. If I have all of my money in a Roth, my income is 0. Dividing by that income might have brought this site down. So it makes more sense to show these specific expenses, which is what they are, as a % of total expenses, which is also spending. Sure, it can be skewed by a large one-time expense. If you're looking for any meaningful information from any of these polls here, you'll be sorry, but this poll is as good as any.

 

[wmc1000]

Voted 5-9% - 2018 Spending was $52K, Taxes, (Fed, State & Property), $3.8K

 

[FIREd]

I am just below 14%.

It was a strange year spending-wise and tax-wise. On the spending side, I had to pay for a divorce and an international move. On the tax side, I realized quite a bit of extra income by cashing in my US investments ahead of the move. So my number is not very meaningful for 2018.

2019 won’t be any more typical as my spending is going to be huge and my tax liability almost null. I bought a car, a condo, and I am spending some money on renovating the latter. Meanwhile I expect to have zero income tax liability (by design, to avoid international tax complications during my transition out of the US).

 

[youbet]

I included fed and state income tax, property tax and IRMAA. (IRMAA is based on income.) RMD's have really added to our tax burden.

 

[Alan]

15.6% of spending in 2018 was income tax and property tax. I need to up our spending to get that percentage lower (In 2017 it was 12.6%)