What makes more sense as to where to retire considering taxes, etc? Massachusetts, New York, or Connecticut?

[MrBojangles]

I live in Litchfield County. You couldn't pick 3 worse states to live in unless you looked at California. All 3 have high taxes but it seems all you care about is taxes? All 3 states usurp your rights and highly tax everything but the air you breath, and I am sure they are working on how to do that. So if you like living in a socialist country Europe is full of those.

What town?

No, tell me more, I want to know.

I can only base where to live on taxes, but what else must I know?

I lived in Litchfield County as a child but I never really experienced what it was all about due to having no vehicle and minimum wage income when there and not coming from money, which means you never drove around to see what’s out there. For example, Falls Village is not on Route 44 and I’ve never even been there despite being within 20 minutes of where I grew up.

 

[Retired Expat]

Our vacation home is in Litchfield county CT and it is so pretty, clean and well cared for. Taxes have never been the gating factor for us but how we structure our overall budget and spending.

No point living in a low tax area you hate!

 

[Just_Steve]

Dutchess County has its good and bad, the western part has the stores, hospitals, doctors and such. The eastern part is more rural nearest hospital is in Sharon Connecticut where my son was born. I like living here but would rather be on the shore in South Carolina but kids are all here. My modest house is worth $450k and pay just shy of $7k property and school tax. Any questions about Dutchess I will answer if I can.

 

[aja8888]

Gumby knows best!

Gumby hasn't lived in Waterbury!

 

[Koolau]

Then, there are those fortunate accidents. Because of our mix of incomes, we pay low sate taxes, have the lowest real estate taxes in the country and have a relatively low "sales tax." We didn't know all of that until we actually moved. We thought all those things would be significantly higher than they turned out to be.

Having low taxes wasn't why we moved or why we stay, but it sure can be nice though YMMV.

 

[Flyfish1]

Gumby hasn't lived in Waterbury!

Fair - Waterbury isn't great IMO. As pointed out taxes in CT aren't wonderful , although overall it beats NJ, but that's a low bar. We like it but certainly didn't move here to lower our taxes.

 

[ncbill]

I certainly considered income taxes as the army moved me around the country for 20+ years. But it's just one part of a holistic decision. I'm glad there is no income tax here in WA, but I did pay almost 10% sales tax on the purchase of a new home. Whenever I look into the taxes in another location, I end up being happy with being here. It's not the cheapest, but has other benefits.

Were you able to elect residency in a state w/o income tax back then?

Mu active duty kid has kept his Florida residency through moves to states with income tax.

 

[braumeister]

I can only base where to live on taxes

Shortsighted in the extreme.

 

[mystang52]

Taxes are real. But quality of life matters as well. I live in high COL Bergen County, NJ. I've lived here so long, my kids and grandkids are very nearby, so my roots are too...rooted.... to consider living anywhere else. I'm familiar with Connecticut and New York State, and I can see much in their favor, for the things that matter to me. If I can afford to live wherever I want, in terms of taxes, quality of life is so much more important. I ddon't think taxes should factor in to OP's decision.

 

[Out of Steam]

Dutchess County has its good and bad, the western part has the stores, hospitals, doctors and such. The eastern part is more rural nearest hospital is in Sharon Connecticut where my son was born. I like living here but would rather be on the shore in South Carolina but kids are all here. My modest house is worth $450k and pay just shy of $7k property and school tax. Any questions about Dutchess I will answer if I can.

I've spent some time in Putnam and Dutchess Counties in the past couple of years and been impressed. It feels a little like New England, and I'd enjoy the train access to New York City.

As long as someone can find a place to live they can afford, I don't believe in being overly driven by tax considerations. As for people leaving high-tax regions, Americans have been leaving urban immigrant gateways (generally the same areas) for over 150 years. Retirees are now living long enough to join them, and for now, many can afford to.

 

[wrigley]

Specifically, Berkshire County Massachusetts, Litchfield or Fairfield Counties in Connecticut, or Dutchess or Westchester Counties in New York? Yes, all not great choices, but which areas are the best and the worst?

I should come to my senses and consider West Virginia, but DW and I like visiting these areas.

I don’t even know what state income taxes are in these areas. Other than Connecticut used to not have a state income tax and created one a bit over 30 years ago now and it cost them a lot more in the long run than not having one at all.

It would be nice if these three states would do something to stop the drain of folks out of there, especially when they retire, but they don’t “get it”.

And they will NEVER get it!

 

[imjustawarrior]

I would look at the total cost of living rather than just taxes. Taxes come in lots of different ways. They all affect COL.

I would then take into account as many factors as possible: COL, quality of life, medical care, ....

 

[aja8888]

Fair - Waterbury isn't great IMO. As pointed out taxes in CT aren't wonderful , although overall it beats NJ, but that's a low bar. We like it but certainly didn't move here to lower our taxes.

I grew up in Waterbury and Oakville. My sister still lives in Waterbury and has iron bars on her house windows. I worked in the Brass industry for a good bit, making Plant Manager of Anaconda Metal Hose. Waterbury was once the Brass Center of the World and now the largest employer is the city followed by the two hospitals (both of which are financially on the rocks). Industry has left the area and the great tax base went with it.

I built a house in Southbury in the mid 1970's on three acres, escaping the downfall of Waterbury. I moved to California in 1981 when the state still had no state income tax and I saw what was coming for industry in the area. Crime and drugs are rampant in the larger Connecticut cities, like most big cities elsewhere. Drug gangs are rooted in Waterbury and the Feds and local police departments are in there to try to put them away, but its been a losing battle.

I'm staying in Texas until I die. I just wish my sister and her sons would get out of where they are into a safer environment, but that's not going to happen.

 

[Teacher Terry]

It depends on whether you are still working or not. We were paying six figures in Fed taxes for a couple of decades while we were working. Now we are in the beginning of 24% tax bracket and consider ourselves middle class.

No offense, but after reading about your home, your lifestyle and other posts you made you are definitely not middle class.

 

[38Chevy454]

I am of the opinion that a state will get money out of you someway. No income tax may have higher property taxes, or high vehicle registration, or school taxes, or sales taxes. There are states with a total lower bite than others. Many previous replies mentioned that your individual case is what matters and what you need to evaluate in each location.

Another wise old saying: don't let the tax tail wag the dog.

 

[Coaster4Now]

In CT (I'm a Connecticotian - what a word), many areas are nice. Great parks. The Goodspeed and The Kate for shows, just to mention a few that I'm familiar with.
But like other states mentioned (which all are nice), some areas are nicer than others, depending on what you are looking for. Coastal areas are kind of fun, some towns are quiet most of the year and get busy with vacation folks.
Taxes are what they are, but at least the income tax cliff on IRAs and pensions is being phased out depending on your income.

 

[MrBojangles]

Shortsighted in the extreme.

I get that, what I should have stated that IF you are going to live in this tri state area and if the lifestyle in these five counties is similar, which one makes the most financial sense? Most folks move to Florida for tax reasons, or move to other states for tax reasons, so this seems like a biggie. But, having said that, I’m FIRE so I can choose where I want to live because I like it and the taxes I pay are a lesser consideration.

 

[MrBojangles]

In CT (I'm a Connecticotian - what a word), many areas are nice. Great parks. The Goodspeed and The Kate for shows, just to mention a few that I'm familiar with.
But like other states mentioned (which all are nice), some areas are nicer than others, depending on what you are looking for. Coastal areas are kind of fun, some towns are quiet most of the year and get busy with vacation folks.
Taxes are what they are, but at least the income tax cliff on IRAs and pensions is being phased out depending on your income.

Can you explain that last paragraph? I wasn’t aware of that.

 

[Coaster4Now]

MrB,
To the best of my (basic knowledge):
In the past, the only CT income tax exemption for IRA and pension income was that it was exempt if your income was below 75k single, 100k joint filers.

Beginning in 2024 (for tax year 2023), filers with incomes above those amounts are having exemptions being phased in.

Singles with less than 100k income and joint with less than 150k income now get at least a partial exemption.

It's been phasing in for a few years, the first year was tax year 2023, at 25%, then 2024 50% and so on.
So in Tax year 2026 100% is exempt - but depending on that sliding scale of income (over those 75K and 100k limits). See doc below, Table 2 IRA exemption Phase-Out Schedule.

I hope I'm explaining this with some clarity (other posters, please correct me if I'm wrong). It's taken me a long time to wrap my head around. it, especially with trying to do Roth conversions (trying to stay in certain CT taxable brackets).

https://www.cga.ct.gov/2023/rpt/pdf/2023-R-0129.pdf

 

[Al18]

I disagree with your take on taxes in NJ. I've been retired for 6 years and NJ income taxes have been less than 1% of AGI each year. I'm in the 12% tax bracket and there's a huge tax break if your AGI is less than 150K per year and you are at least 62 years old.

 

[Gumby]

MrB,
To the best of my (basic knowledge):
In the past, the only CT income tax exemption for IRA and pension income was that it was exempt if your income was below 75k single, 100k joint filers.

Beginning in 2024 (for tax year 2023), filers with incomes above those amounts are having exemptions being phased in.

Singles with less than 100k income and joint with less than 150k income now get at least a partial exemption.

It's been phasing in for a few years, the first year was tax year 2023, at 25%, then 2024 50% and so on.
So in Tax year 2026 100% is exempt - but depending on that sliding scale of income (over those 75K and 100k limits). See doc below, Table 2 IRA exemption Phase-Out Schedule.

I hope I'm explaining this with some clarity (other posters, please correct me if I'm wrong). It's taken me a long time to wrap my head around. it, especially with trying to do Roth conversions (trying to stay in certain CT taxable brackets).

https://www.cga.ct.gov/2023/rpt/pdf/2023-R-0129.pdf

I was just about to post a link to that document. The elimination of the $100k cliff has been quite welcome, although the phase in process has made tax planning more complicated during the last few years.

 

[bltkmt]

You could consider places other than Connecticut, but why? It is, by far, the best place to live in the USA.

Agreed!

 

[SnowballCamper]

Were you able to elect residency in a state w/o income tax back then?

Mu active duty kid has kept his Florida residency through moves to states with income tax.

When stationed in WA I changed it to WA. By default it's the state you live in when you come on active duty, but you can change it along the way. There are trade offs on this too, like getting in state tuition rates when you leave service.

 

[SecretlyFI]

I disagree with your take on taxes in NJ. I've been retired for 6 years and NJ income taxes have been less than 1% of AGI each year. I'm in the 12% tax bracket and there's a huge tax break if your AGI is less than 150K per year and you are at least 62 years old.

Fellow NJ resident here. I agree there's ways to keep your income tax low. But the property taxes are the highest in the country and sales tax at 6.625% takes a bite also. When I've read the threads here about property taxes across the country, it really highlights how insanely high ours are. I have a 60 year old 1,800 square foot house and pay over $10,000 a year. Taken all together, this is not a tax-friendly state.

 

[Al18]

SecretlyFI,
Sounds like you live in the north NJ or near the shore. My house is very similiar to yours, but my property taxes are $5700. I live in south NJ, not to far from Philly. My homeowners insurance is very reasonable at $1100 - hasn’t changed in 3 years.