1 Year in Delaware (moved from Texas)

[Katsmeow]

I will say that I didn't pay a lot of attention to the no sales tax thing before I moved here...but it has been wonderful. I see lots of PA, Md and NJ plates in the shopping centers.

 

[steady saver]

As a current Texan, but having lived in Delaware for 18 short months in grade school, I've really enjoyed reading your update. I'd love to go back and visit some time. It was the absolute best school experience I ever had as a child growing up. And we lived in a new development with woods behind us and woods and a creek across the street so it was heaven for a child. Happy memories indeed.

 

[Katsmeow]

As a current Texan, but having lived in Delaware for 18 short months in grade school, I've really enjoyed reading your update. I'd love to go back and visit some time. It was the absolute best school experience I ever had as a child growing up. And we lived in a new development with woods behind us and woods and a creek across the street so it was heaven for a child. Happy memories indeed.

You should visit Delaware in the summer. I was laughing when people were freaking out here when a few days it went into the low 90s. That is definitely hot and it isn't when I would go for an outdoor walk. But, honestly, coming from Texas is not anything remarkable. I was talking to a friend in Texas the same week and it was 105! The weather here is just so much better....

 

[Kings over Queens]

Great write up. can't believe its been a year.

we're in NJ and DE is on our list. I like the trip through the middle of the state, and the beaches are great.

 

[Dranoel]

Great recap. I'm a U of D alum living in Florida. But, thinking of a move to N. Delaware for many of the benefits you cited. Thanks!

 

[Diogenes]

So last year I posted about moving from Texas to Delaware ...

Cost of Living - Far less expensive in Delaware. In Texas we paid about $6500 in property tax (with an over 65 exemption) and right before we left our home insurance had increased to almost $6000 a year (with us never having had a claim before that). We bought a house in Delaware close in price to what we had in Texas. Our property tax is about $2400 and home insurance is just under $1200. Utilities are also less. Delaware has no sales tax which is a huge thing. Yes, Delaware has a state income tax. But, due to SS not being taxed and other exemptions we have so far not needed to pay it. Even if there is a year or two where we have to pay it will be far less than property tax and sales tax are in Texas. Our overall expenses are just much less here.

Excellent summary! The above-quoted particularly caught my eye. It looks like the finances definitely worked out in your situation. I do however wonder about folks who have lots of on-paper taxable income and few expenses (housing, shopping, healthcare,...), who are too young for senior-citizen exemptions/deductions. 6.6% marginal income tax (for anything above $60K/year) is... a factor. To your example, if we wisely structure our finances pre-retirement, we'll have more options post-retirement!

 

[Out of Steam]

Takes a long time to get places - This one is the one I didn't really understand before we got here. It has its good part and bad part to it. There are not many freeways in Delaware. Also to get from Delaware to the Philadelphia suburbs takes a long time since you are mostly not on freeways. I went somewhere the other day that was 30 miles away. It took an hour to get there. Why? Lots of twisty turning roads where you couldn't drive very fast.

This is a general issue in the Northeastern and Mid-Atlantic states of the US, basically anything from Fredericksburg or Culpeper, VA north. It certainly was the case in the Maryland suburbs of Washington, DC we lived in for over 25 years.

Even on a trip that is all interstate highway, averaging 55 mph with stops over a substantial distance is unusual.

 

[Out of Steam]

I do however wonder about folks who have lots of on-paper taxable income and few expenses (housing, shopping, healthcare,...), who are too young for senior-citizen exemptions/deductions. 6.6% marginal income tax (for anything above $60K/year) is... a factor. To your example, if we wisely structure our finances pre-retirement, we'll have more options post-retirement!

The downside of Virginia is that the highest state income tax rate of 5.75% applies to all income over $17K, and there are few retirement tax breaks. Overall, with the sales tax on food, there does not appear to be significant savings over "high-tax" Maryland.

 

[USGrant1962]

The downside of Virginia is that the highest state income tax rate of 5.75% applies to all income over $17K, and there are few retirement tax breaks. Overall, with the sales tax on food, there does not appear to be significant savings over "high-tax" Maryland.

Maryland's state and local tax burden is about 17% higher than Virginia (2021 data below). Maryland income tax includes a local component that averages about 3% from the first dollar (this is on top of normal property tax rates) that is rarely shown on state tax comparisons. So after only $3K income* you are paying ~7.75%, then on up to ~8.75% over $250K/$300K (single/MFJ).

How High Are State and Local Tax Collections in Your State?

Contrary to initial expectations, the pandemic years were good for state and local tax collections, and while the surges of 2021 and 2022 have not continued into calendar year 2023, revenues remain robust in most states and well above pre-pandemic levels even after accounting for inflation.

taxfoundation.org

But Virginia is not particularly cheap - #20 on the referenced data versus MD at #10. PA is interesting because it excludes all IRA/401(k) from taxation, so it's #19 ranking above doesn't really reflect retiree taxes.

*Yes, for some stupid reason MD has 3 tax brackets between 0 and $3K. And it is the only state with both inheritance and estate taxes.

 

[Koolau]

How High Are State and Local Tax Collections in Your State?

Contrary to initial expectations, the pandemic years were good for state and local tax collections, and while the surges of 2021 and 2022 have not continued into calendar year 2023, revenues remain robust in most states and well above pre-pandemic levels even after accounting for inflation.

taxfoundation.org

An interesting and mostly useful site from what I can see. However 2 things struck me about the "per capita" tax numbers.

1) The numbers are dependent upon individual earnings to some extent. That is to say: High cost of living sates tend to have higher individual incomes (or else people flee.) Keep in mind that the ratings are based on what people actually pay per person - not their overall percent of income. The former is a useful number but the latter has it's place as well when determining where to settle IMHO.

2) The total of taxes is SO dependent on a variety of factors other than total income. For instance, I pay WAY less than the average for my state because of my mix of income. I'm actually above average in income in my state, but a lot of my income is not taxed in my state - primarily because none of my income is "earned." Most or at least many sources of income in my state are not taxed or only partially taxed.

Not a criticism of the site but just a caveat in how to use it.

 

[Pellice]

Delaware Bay is wonderful to explore. A series of devastating storms in the 1950s set back any large scale plans for development. Nature organizations bought up the cheap land and established large refuges. There are so many places - and when you get through them, you can swing around to the NJ side either via the Turnpike or the ferry from Cape Henlopen to Cape May and start there. You should try to do the auto loop through the vast National Wildlife Refuge at Bombay Hook, which is good even in winter.

 

[Out of Steam]

Delaware Bay is wonderful to explore. A series of devastating storms in the 1950s set back any large scale plans for development. Nature organizations bought up the cheap land and established large refuges. There are so many places - and when you get through them, you can swing around to the NJ side either via the Turnpike or the ferry from Cape Henlopen to Cape May and start there. You should try to do the auto loop through the vast National Wildlife Refuge at Bombay Hook, which is good even in winter.

We get to the Delaware shore at least once a year and the refuges on the Delaware side have been on my to-do list for some time. I'll keep your recommendation in mind.

 

[EastWest Gal]

Lots of places to go not too far from where you are. Longwood Gardens in Kennett Square is magnificent, and closer than King of Prussia. They have a Christmas display inside the greenhouses and also outside that is very nice, and of course it will be beautiful in the spring. It is a very large garden and nearly impossible to do in one day. The National Aquarium in Baltimore is a must see as well. Annapolis is a bit farther but has some really interesting historic houses. Then there is Gettysburg and Amish country in PA. I live in central PA and having moved from California, I've enjoyed visiting NYC and Washington DC. In 2023 I spent a week in each city. Get out and enjoy the fall weather here.