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Is it worth to relocate for retirement?

Posted: Fri Aug 21, 2020 12:23 pm
by augusto
In terms of optimization, is it worth to move to a “retiree friendly” state like Florida, Arizona, etc, from a northern state like Massachusetts?

In your opinion and in general terms, what are the rough factors that determine if one should move from one state to another “retiree friendly” state to get a better value for their money? If there is no heirs, what decides this question net worth or annual income of retiree?

This is not a life style question, it is purely a financial question.

Thank you!

Re: Is it worth to relocate for retirement?

Posted: Fri Aug 21, 2020 12:32 pm
by sport
You may find that from a tax standpoint, it makes little difference. If you save on income taxes, you may spend more on real estate and sales taxes, etc. IMO, what is more important is the cost of living. If you move from a HCOL area to a lower COL area, your money will go a lot further.

Re: Is it worth to relocate for retirement?

Posted: Fri Aug 21, 2020 12:33 pm
by brad.clarkston
Normally I would say no but you mentioned the Tax-assachusetts state which would be a yes in my book.

Re: Is it worth to relocate for retirement?

Posted: Fri Aug 21, 2020 12:34 pm
by Normchad
augusto wrote: Fri Aug 21, 2020 12:23 pm In terms of optimization, is it worth to move to a “retiree friendly” state like Florida, Arizona, etc, from a northern state like Massachusetts?

In your opinion and in general terms, what are the rough factors that determine if one should move from one state to another “retiree friendly” state to get a better value for their money? If there is no heirs, what decides this question net worth or annual income of retiree?

This is not a life style question, it is purely a financial question.

Thank you!
I’m planning to relocate in retirement, although finances aren’t a driving force in that decision.

In terms of cost of living, I expect my next house will be cheaper. But a Toyota Camry will cost the same. My prescriptions will cost the same. So I don’t anticipate a big savings from stuff that I buy.

I hear taxes in MA are very high, so you probably would save a bunch by relocating to TX, FL, etc.

I do wonder though, for regular folks, how great those savings really are. I’ll be retired, I’m not planning to have a lot of taxable income after I retire. (I’m planning to carefully manage my withdrawals to minimize federal income taxes).

It would be good to hear from folks that have done this, how much dollars they actually save in a year by moving.

Re: Is it worth to relocate for retirement?

Posted: Fri Aug 21, 2020 12:36 pm
by drzzzzz
As a retiree, if you can afford to live anywhere - then it's not a financial question, but a personal one about happiness and personal satisfaction. If you need to financially move elsewhere because of taxes or expenses to be able to retire or retire comfortably, then you should. Beyond that, if you have no heirs to leave money to, then your only other option is leaving your assets to charity. I would rather enjoy what I can afford to do during my life rather than saving a few dollars on taxes, especially since your only options at death are either gifting to a charity or deciding which friends/heirs you might want to leave your assets to. I recall a financial advisor once saying that you don't need to be the wealthiest person in the cemetary.

Re: Is it worth to relocate for retirement?

Posted: Fri Aug 21, 2020 12:37 pm
by Sandtrap
UHCOL to LCOL
More than double our living standard and purchasing power on most all areas.

j😀

Re: Is it worth to relocate for retirement?

Posted: Fri Aug 21, 2020 12:48 pm
by kabob
Absolutely! We moved from Boca Raton,Fl (Palmbeach county) to just south a Knoxville (loudon county) Tn and i jokingly say Palm Beach county gives me $24 Thousand a year just to leave and never come back!
Actually that's the diff in property tax and homeowners ins per year.

And the move was not that we didn't like FLa, or financial, we both really like Florida - it was because we just wanted to get away from the high density population and traffic hassle for retirement. Plus we found a just as nice place (or better < half the price) on a TVA lake in TN...
We like it, retirement Life is Great...

Re: Is it worth to relocate for retirement?

Posted: Fri Aug 21, 2020 12:49 pm
by FIREchief
Don't forget to consider availability of medical care. That nice hospital with access to highly skilled specialists that is only 30 minutes away doesn't mean anything.....until you need it. 8-)

Re: Is it worth to relocate for retirement?

Posted: Fri Aug 21, 2020 12:51 pm
by terran
I grew up in Massachusetts. I'll never spend another winter there in my life if there's anything I can do about. But if you like where you live and can afford to retire there, then no, I wouldn't move only for financial reasons.

Re: Is it worth to relocate for retirement?

Posted: Fri Aug 21, 2020 1:00 pm
by Jack FFR1846
This is actually a big "it depends". Sure, if you live in Back Bay, your home is worth millions and you're paying a ton in property tax. But if you live in Lee, the medium home is worth $257k with a property tax rate of $14.68/$1,000 value. My mom pays $11.16/$1,000 value in Orlando, where home medium price is higher at $275k so it's more in Mass, but do the research and the math.

Quality of life is difficult. My mom is a traditional snow bird with a place in western Ma and one in Orlando. She is about to put her Orlando place up for sale and make the western MA home permanent and just deal with winter. She's split the year for about 11 years.

I'm sure you could find a very poor town in a very poor state and spend nothing and if you just want to watch TV all day, you'd be fine.

For myself, I'm in eastern MA, where it's more expensive. I've been in Florida, Texas and Arizona extensively over the years. I'd want nothing to do with the southern end of any of them. Northern Arizona (where they get snow) is actually quite nice, but there are big cultural trade offs in some locations that you'd notice once you're there for a little bit.

Re: Is it worth to relocate for retirement?

Posted: Fri Aug 21, 2020 1:06 pm
by delamer
I don’t understand how this purely can be a financial question. There aren’t enough cost-of living savings in the world to get me to move to some states/areas.

That said, housing costs take up (by far) the largest percentage of retirees’ benefits. Those costs vary widely by location.

Transportation is next. These costs don’t vary nearly as much by locale.

Unfortunately, while there are lots of articles about tax-friendly retirement states, I haven’t been able to find any retiree budget data that includes income taxes.

But then again, federal income taxes aren’t dependent on state location.

Finally, so much depends on your personal income. A retired couple with $35,000/year is going to have different tax considerations than one with $135,000.

I don’t see how net worth comes into play, if you aren’t concerned about state inheritance taxes.

Re: Is it worth to relocate for retirement?

Posted: Fri Aug 21, 2020 1:10 pm
by adamthesmythe
augusto wrote: Fri Aug 21, 2020 12:23 pm In terms of optimization, is it worth to move to a “retiree friendly” state like Florida, Arizona, etc, from a northern state like Massachusetts?

In your opinion and in general terms, what are the rough factors that determine if one should move from one state to another “retiree friendly” state to get a better value for their money? If there is no heirs, what decides this question net worth or annual income of retiree?

This is not a life style question, it is purely a financial question.

Thank you!
I don't see why it ISN'T a lifestyle question. At least in part.

Re: Is it worth to relocate for retirement?

Posted: Fri Aug 21, 2020 1:11 pm
by TomatoTomahto
terran wrote: Fri Aug 21, 2020 12:51 pm I grew up in Massachusetts. I'll never spend another winter there in my life if there's anything I can do about. But if you like where you live and can afford to retire there, then no, I wouldn't move only for financial reasons.
We moved to MA less than 3 years ago, so early days...
We upgraded insulation on our house, put in a sauna, put in ground based heat pump, etc., and it’s as comfy as could be. Looking forward to hunkering down by the fire :sharebeer

Re: Is it worth to relocate for retirement?

Posted: Fri Aug 21, 2020 1:20 pm
by Watty
augusto wrote: Fri Aug 21, 2020 12:23 pm If there is no heirs, what decides this question net worth or annual income of retiree?
Your net worth or annual income will be the same no matter where you live, at least before taxes.

What will likely change will be your standard of living and quality of life.

This may be something like the difference between living in a modest but expensive condo in a HCOL area or living in a McMansion in a low cost of living area.

There are also a lot of other factors that also determine your standard of living like the climate, available cultural activities, access to nature, compatibility with the local culture(like living in the rural bible belt or Las Vegas), etc.

For many people who retired with modest savings moving to a lower cost of living area may make their retirement a lot more secure.
augusto wrote: Fri Aug 21, 2020 12:23 pm If there is no heirs.....
Everyone has heirs even if they will be leaving money to a charity. Some people may not really care just how much is leftover but they would still have heirs.

Re: Is it worth to relocate for retirement?

Posted: Fri Aug 21, 2020 2:13 pm
by phxjcc
Sandtrap wrote: Fri Aug 21, 2020 12:37 pm UHCOL to LCOL
More than double our living standard and purchasing power on most all areas.

j😀
In Hawaii?

Re: Is it worth to relocate for retirement?

Posted: Fri Aug 21, 2020 2:19 pm
by Watty
Normchad wrote: Fri Aug 21, 2020 12:34 pm It would be good to hear from folks that have done this, how much dollars they actually save in a year by moving.
When I was in my late 40s I did a cross country job relocation during a merger from an area with a medium cost of living to an area that had lower costs. Our original plan was to work here until I retired then move somewhere else since we did not have any ties to the area. We were even working on a list of possible places to retire to.

It did not work out that way though since by the time I retired my kid had grown up and was married with kids that live near us. Now that we have family ties here we will be staying here in retirement.

I suspect that a lot of people that plan on moving when they retire don't actually end up moving for one reason or another.

Anyway just by mostly dumb luck we ended up in an unusually low cost of living area but housing costs have been increasing especially the last two years. Since we have a paid off house that does not impact us in a negative way.

Anyway our situation is that we have a pretty middle class lifestyle and a paid off house. Some of the major expenses are;

1) Property tax: $780 a year for a pretty average house (that is not a typo). We live in one of the few counties that exempts seniors from paying school property taxes. It varies a lot but in other nearby counties without the senior exemption the property tax on a similar house would likely be around $3,500.

2) Most years we should need to pay little or no state income taxes. The state has a senior income tax exemption of $65K($130K for a couple). That is in addition to the state not taxing Social Security.

3) Sales tax is about 6%, but a bit less for some things like food. Car purchases are subject to about a 7% one time combined sales tax and registration fee but after that car registration is less than $100 a year.

4) Once we both start Social Security we may have years when we pay little or no federal income tax. For example an over 65 couple with $40K in Social Security and $20K in taxable income would owe no Federal income tax. With a paid off house $60K a year is enough for an above average middle class lifestyle here. (The typical Boglehead poster may have a skewed opinion of what a middle class lifestyle is.)


I did not do a detailed calculation but I would guess that altogether it costs us $10k to $15K less a year compared to where we used to live. With a 4% safe withdrawal rate it would require a retirement nest egg that was $250K larger to spend an additional $10K a year.

There are a lot more factors but the lower cost here likely allow me to retire 3 to 5 years earlier.

Re: Is it worth to relocate for retirement?

Posted: Fri Aug 21, 2020 2:21 pm
by mkc
Normchad wrote: Fri Aug 21, 2020 12:34 pm
I hear taxes in MA are very high, so you probably would save a bunch by relocating to TX, FL, etc.
We left Texas in retirement in a large part due to property/school taxes. While TX may not have an income tax, they make up for it in property taxes. We opted for TN for location, climate, and much lower cost of living. True our sales tax is higher than some, but lower costs on other things easily offset it.

Re: Is it worth to relocate for retirement?

Posted: Fri Aug 21, 2020 2:24 pm
by Sandtrap
phxjcc wrote: Fri Aug 21, 2020 2:13 pm
Sandtrap wrote: Fri Aug 21, 2020 12:37 pm UHCOL to LCOL
More than double our living standard and purchasing power on most all areas.

j😀
In Hawaii?
from Hawaii 😩😩

j😳

Re: Is it worth to relocate for retirement?

Posted: Fri Aug 21, 2020 2:30 pm
by Normchad
Watty wrote: Fri Aug 21, 2020 2:19 pm
Normchad wrote: Fri Aug 21, 2020 12:34 pm It would be good to hear from folks that have done this, how much dollars they actually save in a year by moving.
When I was in my late 40s I did a cross country job relocation during a merger from an area with a medium cost of living to an area that had lower costs. Our original plan was to work here until I retired then move somewhere else since we did not have any ties to the area. We were even working on a list of possible places to retire to.

It did not work out that way though since by the time I retired my kid had grown up and was married with kids that live near us. Now that we have family ties here we will be staying here in retirement.

I suspect that a lot of people that plan on moving when they retire don't actually end up moving for one reason or another.

Anyway just by mostly dumb luck we ended up in an unusually low cost of living area but housing costs have been increasing especially the last two years. Since we have a paid off house that does not impact us in a negative way.

Anyway our situation is that we have a pretty middle class lifestyle and a paid off house. Some of the major expenses are;

1) Property tax: $780 a year for a pretty average house (that is not a typo). We live in one of the few counties that exempts seniors from paying school property taxes. It varies a lot but in other nearby counties without the senior exemption the property tax on a similar house would likely be around $3,500.

2) Most years we should need to pay little or no state income taxes. The state has a senior income tax exemption of $65K($130K for a couple). That is in addition to the state not taxing Social Security.

3) Sales tax is about 6%, but a bit less for some things like food. Car purchases are subject to about a 7% one time combined sales tax and registration fee but after that car registration is less than $100 a year.

4) Once we both start Social Security we may have years when we pay little or no federal income tax. For example an over 65 couple with $40K in Social Security and $20K in taxable income would owe no Federal income tax. With a paid off house $60K a year is enough for an above average middle class lifestyle here. (The typical Boglehead poster may have a skewed opinion of what a middle class lifestyle is.)


I did not do a detailed calculation but I would guess that altogether it costs us $10k to $15K less a year compared to where we used to live. With a 4% safe withdrawal rate it would require a retirement nest egg that was $250K larger to spend an additional $10K a year.

There are a lot more factors but the lower cost here likely allow me to retire 3 to 5 years earlier.
Thanks so much for posting this. It’s very informative.

Re: Is it worth to relocate for retirement?

Posted: Fri Aug 21, 2020 2:33 pm
by friar1610
brad.clarkston wrote: Fri Aug 21, 2020 12:33 pm Normally I would say no but you mentioned the Tax-assachusetts state which would be a yes in my book.
I'm a resident of Massachusetts. Although I would not characterize it as a low-tax state, our major sources of retirement income are not taxed at the state level. These are my military pension and SS for two of us. These three income streams exceed all but our most extraordinary and unusual spending needs. Yes, the property taxes are high. I've personally seen no other state whose taxes are so attractive that I'd be tempted to move there solely because of them . (Winter weather is another matter.) :oops:

Edited to add underlined clause.

Re: Is it worth to relocate for retirement?

Posted: Fri Aug 21, 2020 2:33 pm
by Normchad
mkc wrote: Fri Aug 21, 2020 2:21 pm
Normchad wrote: Fri Aug 21, 2020 12:34 pm
I hear taxes in MA are very high, so you probably would save a bunch by relocating to TX, FL, etc.
We left Texas in retirement in a large part due to property/school taxes. While TX may not have an income tax, they make up for it in property taxes. We opted for TN for location, climate, and much lower cost of living. True our sales tax is higher than some, but lower costs on other things easily offset it.
Very fair point. I’m accustomed to paying about $7k annually in real estate tax. I think TX would be similar for me.

But I forgot that there are lots of places in the US where property taxes would be significantly lower.

Re: Is it worth to relocate for retirement?

Posted: Fri Aug 21, 2020 3:52 pm
by phxjcc
Sandtrap wrote: Fri Aug 21, 2020 2:24 pm
phxjcc wrote: Fri Aug 21, 2020 2:13 pm
Sandtrap wrote: Fri Aug 21, 2020 12:37 pm UHCOL to LCOL
More than double our living standard and purchasing power on most all areas.

j😀
In Hawaii?
from Hawaii 😩😩

j😳
:beer

Re: Is it worth to relocate for retirement?

Posted: Fri Aug 21, 2020 4:23 pm
by 7eight9
Why limit yourself to living in the United States? Your dollar will go farther in a lot of other places in the world.

Re: Is it worth to relocate for retirement?

Posted: Fri Aug 21, 2020 4:32 pm
by cantabtim
friar1610 wrote: Fri Aug 21, 2020 2:33 pm
brad.clarkston wrote: Fri Aug 21, 2020 12:33 pm Normally I would say no but you mentioned the Tax-assachusetts state which would be a yes in my book.
I'm a resident of Massachusetts. Although I would not characterize it as a low-tax state, our major sources of retirement income are not taxed at the state level. These are my military pension and SS for two of us. These three income streams exceed all but our most extraordinary and unusual spending needs. Yes, the property taxes are high. I've personally seen no other state whose taxes are so attractive that I'd be tempted to move there solely because of them . (Winter weather is another matter.) :oops:

Edited to add underlined clause.
I agree with so many of the wise posts in this thread. Your mileage may vary. It depends entirely on your personal circumstances. At a basic level, income tax is progressive and levied more heavily on people with large earned income (hence the name :happy ) whereas sales tax and especially property tax tend to be regressive, and folks with smaller incomes end up paying a larger percentage of that income in tax. Many retirees (though not a lot of the people represented on this forum) have a lower income in retirement so may be better off in a state that derives more of its tax revenue from income than sales or property. Of course residential exemptions and sales tax exemptions on essentials, like food, skew things as well.

I doubt we'd ever relocate JUST for tax reasons.

P.S. its fun to say "Taxachusetts", but a google search on "tax rates by state" turns up an article putting MA at #25, which by my reckoning is pretty average!

Re: Is it worth to relocate for retirement?

Posted: Fri Aug 21, 2020 5:28 pm
by pahkcah
If “worth” equates to expenses, sure it can be worth it to relocate. Someone can really save money by moving to a state that does not have a state income tax or tax 401(K)’s, IRAs, and pensions. If a lot of your net worth is in non-Roth 401(k)’s, IRAs, etc., it could be very beneficial. If this is the case, and you don’t mind the weather in Massachusetts (MA), just move to southern NH. Of course, one would have to hope that property taxes, sales taxes, etc. would not add too much back on the expense side. As others have said, this needs to be weighed against the value of being near family, good health care, recreational opportunities, educational opportunities, etc.? Some of these may not matter. Some, like access to quality health care, might matter quite a bit for a retiree

As far as “Taxachusetts”, I agree with cantabtim, it may sound catchy but there are quite a few states that are less tax-friendly than MA. Although we have a 6.25 percent sales tax on most tangible items, grocery food, healthcare items, and clothing items up to $175 are not taxed. Individual items of clothing above $175 are only taxed on the amount that exceeds $175. As retirees, we aren’t buying a lot of expensive clothes anymore, which is also a plus.

DW and I moved back to Massachusetts (MA) after having lived in Ohio and Virginia for most of our working careers. We both receive Federal pensions and Social Security and pay no state income tax on any of our pension income. As a result of not having to pay state income tax (a good thing), we are able to claim all of our property taxes as a Federal deduction (another good thing). Property taxes in MA are dependent on the town/city where you live. Ours are quite high, but we get to live on a ridge (300 feet above sea level) that looks out onto the ocean about two miles away. Love all four seasons. I just can’t believe there are people who don’t like winter! (heavy sarcasm here) :happy

cantabtim, greetings from another cantabridgian! North Cambridge for me. :beer

Re: Is it worth to relocate for retirement?

Posted: Fri Aug 21, 2020 5:38 pm
by CenTexan
mkc wrote: Fri Aug 21, 2020 2:21 pm
Normchad wrote: Fri Aug 21, 2020 12:34 pm
I hear taxes in MA are very high, so you probably would save a bunch by relocating to TX, FL, etc.
We left Texas in retirement in a large part due to property/school taxes. While TX may not have an income tax, they make up for it in property taxes. We opted for TN for location, climate, and much lower cost of living. True our sales tax is higher than some, but lower costs on other things easily offset it.
Ha! We left Texas for Tennessee for the same reasons - plus the beautiful country side (and rain) here. :P

Re: Is it worth to relocate for retirement?

Posted: Fri Aug 21, 2020 5:53 pm
by rockstar
I'm a hiker, so I like to be out west. I also have a lot of friends out west. Neither of these are really financially driven.

I think, you want to establish yourself and make friends before you retire wherever you decide to live.

Re: Is it worth to relocate for retirement?

Posted: Fri Aug 21, 2020 7:03 pm
by stan1
I invested for decades so I could retire to a place I enjoy. I'd want to put family and enjoyment of location ahead of cost in retirement factors. There are some places I would enjoy retiring that are lower than very high cost, but I like good weather. I like places with 300 plus days of sunshine, no bugs, and lower humidity. Most of the low cost places get filtered out in that screen.

Re: Is it worth to relocate for retirement?

Posted: Fri Aug 21, 2020 9:26 pm
by Pugs1351
1) Property tax: $780 a year for a pretty average house (that is not a typo). We live in one of the few counties that exempts seniors from paying school property taxes. It varies a lot but in other nearby counties without the senior exemption the property tax on a similar house would likely be around $3,500.


Property tax $750 a MONTH for me here for a pretty average house. Lol

Re: Is it worth to relocate for retirement?

Posted: Sat Aug 22, 2020 10:07 am
by Retired1809
Many years ago, I considered relocating. But talking with friends and family made me realize that leaving the place where I've lived for 50 years would mean leaving my support network, the fabric of my life: family including two older brothers and their children and grandchildren, our own children, our church including friends and fellow-volunteers, my network of medical providers including my primary care physician, my dentist, my orthopedist, my dermatologist, etc., and our neighborhood of friends. Beyond that, I'm familiar with the stores in my city whether it's Costco or Aldi. I have a network of trusted service providers, be it plumbers, electricians, painters, tree crews, etc. And finally years of knowledge of government and the politics of my state and community make it easier to understand what's going on around me and whom to believe and whom not to believe. In a pandemic, the value of familiarity with where one lives is greater than ever: knowing where to safely get a take-out, knowing where to shop safely and where to get help when needed. And after this pandemic, I'll look forward to vacationing but not relocating; to me that seems preferable. But each to her or his own.

Re: Is it worth to relocate for retirement?

Posted: Sat Aug 22, 2020 11:38 am
by illumination
You need to figure out what your retirement will look like in terms of income, but I don't really buy into the "it all evens out" arguments regarding certain states and how they tax people. There's an ENORMOUS difference between what you will pay in taxes to live in somewhere like CA or MA versus Texas or Florida, especially if you are in a higher bracket. I understand it's not lower on every single thing, but looking holistically, it's simply lower or higher because that's what the voters in those states usually want. And usually higher tax states go hand-in-hand with higher cost of living. If you're not working, you're not getting the benefit of a higher salary in those areas.

Where I think it's splitting hairs are those "middle of the road" states and you make a lateral move to something similar. Or if you see yourself in a lower bracket for most of your retirement. But on the extremes, it makes a huge difference.

Re: Is it worth to relocate for retirement?

Posted: Sat Aug 22, 2020 11:46 am
by MathIsMyWayr
illumination wrote: Sat Aug 22, 2020 11:38 am You need to figure out what your retirement will look like in terms of income, but I don't really buy into the "it all evens out" arguments regarding certain states and how they tax people. There's an ENORMOUS difference between what you will pay in taxes to live in somewhere like CA or MA versus Texas or Florida, especially if you are in a higher bracket. I understand it's not lower on every single thing, but looking holistically, it's simply lower or higher because that's what the voters in those states usually want. And usually higher tax states go hand-in-hand with higher cost of living. If you're not working, you're not getting the benefit of a higher salary in those areas.

Where I think it's splitting hairs are those "middle of the road" states and you make a lateral move to something similar. Or if you see yourself in a lower bracket for most of your retirement. But on the extremes, it makes a huge difference.
As a reference, my CA state tax is expected to be around 1/3 the federal tax in retirement. If I add the property taxes, it will be over 60% of the federal tax.

Re: Is it worth to relocate for retirement?

Posted: Sat Aug 22, 2020 11:58 am
by M.Lee
I'm struggle a lot with making this decision. I am in NJ the most expensive real estate tax state in the country and state taxes are among the highest too.


U.S. states with the highest property taxes in 2018
New Jersey: $8,780
Connecticut: $7,222
New York: $6,947
New Hampshire: $6,253
Massachusetts: $6,019
District of Columbia: $5,480
Rhode Island: $5,368
California: $5,354
Vermont: $5,331
Texas: $5,265

U.S. counties with the highest property taxes
Westchester, New York: $17,392
Rockland, New York: $12,925
Marin, California: $12,242
Essex, New Jersey: $12,161
Bergen, New Jersey: $11,771
Nassau, New York: $11,708
Union, New Jersey: $11,075
Fairfield, Connecticut: $10,754
Morris, New Jersey: $10,507
Passaic, New Jersey: $9,988

Re: Is it worth to relocate for retirement?

Posted: Sat Aug 22, 2020 12:15 pm
by Scooter57
When we looked in moving to other states from Massachusetts we were shocked to discover our taxes and other expenses would go way up! Massachusetts state tax has dropped over the years and it is not tiered to income. This is not the case in many other states where if you have significant investment income you are taxed at a much higher rate than others. New Hampshire which has the reputation for having no income tax has a 6% tax on investment income, which is more than MA's 5% tax on all but short term gains. Bogleheads should love that only short term gains are taxed at a high rate in MA which encourages NOT fooling around with the portfolio.

Property tax depends on where you live. the rates can differ from $14/$1000 assessed value to $26 or more. Ours is about $15. The neighboring town, nowhere as near as nice, is in the 20s. You can still find homes in the $200K range in rural areas but still be near colleges and towns with (in normal times) restaurants and independently owned shops.

Estate tax is the one big issue, which has made us do some large gifting to our kids which has worked out well. I continue to hope that MA will catch up with most other states in revising upward its definition of where the estate tax starts. However, unless you die with a million bucks, it is not an issue. That is where the tax starts.

When things really start making a difference is in the health care costs. Massachusetts has regulated out predatory insurers and long before Obamacare or Romneycare only allowed insurers that paid claims and did not pull shenanigans. Having lived in Connecticut where the insurance we had turned out to be a scam that excluded most of our claims when we needed it, I appreciated this. Medicare Advantage in MA is very affordable and offers superb coverage compared to what I saw in other states. In fact, I was horrified at the cost of Advantage plans elsewhere. We have excellent public schools and care for the elderly, and a culture that does what it can to take care of those who need care.

Our public libraries will get you any book anywhere in the state that you want to read for free and have lots of free ebooks too. I have researched extremely obscure topics from my small town drawing books from university libraries at no cost.

The weather sucks. I will agree to that, but after various trips all over the US we came home and realized we could not give up the stuff we loved about our region for better weather or a fancier home. Our modest home has over 3 acres of beautiful untouched forest, only 3 miles from shopping. There is natural beauty of all kinds within a day drive, rivers, seashore, mountains, forests. Once out of cities our traffic is benign, but we still have rich opportunities that most other rural areas don't provide. As an older person I discovered could not drive safely in most of the places with nicer weather because the roads were all 4 lanes going 60 MPH in the suburbs, everyone driving like maniacs, and in some places filled with retirees, the 80 and 90 year olds driving 60 scared the hell out of me because I know what has happened to my vision and reflexes even though I'm totally legal to drive without glasses!

All this points out that there are all kinds of low cost areas with a huge range in available culture, services, health, etc.

Re: Is it worth to relocate for retirement?

Posted: Sat Aug 22, 2020 12:40 pm
by delamer
Retired1809 wrote: Sat Aug 22, 2020 10:07 am Many years ago, I considered relocating. But talking with friends and family made me realize that leaving the place where I've lived for 50 years would mean leaving my support network, the fabric of my life: family including two older brothers and their children and grandchildren, our own children, our church including friends and fellow-volunteers, my network of medical providers including my primary care physician, my dentist, my orthopedist, my dermatologist, etc., and our neighborhood of friends. Beyond that, I'm familiar with the stores in my city whether it's Costco or Aldi. I have a network of trusted service providers, be it plumbers, electricians, painters, tree crews, etc. And finally years of knowledge of government and the politics of my state and community make it easier to understand what's going on around me and whom to believe and whom not to believe. In a pandemic, the value of familiarity with where one lives is greater than ever: knowing where to safely get a take-out, knowing where to shop safely and where to get help when needed. And after this pandemic, I'll look forward to vacationing but not relocating; to me that seems preferable. But each to her or his own.
One thing to keep in mind is that life is not static, even if you try to be. Doctors retire, friends move away, family members die, etc.

Hopefully, these changes are over time and therefore are relatively easy to adapt to. But your life in 10 years can look a lot different than it does today, even in the same town.

Somone argued on another thread that people shouldn’t move because you might get bad neighbors in the new location. Well, you can live happily for years in a home, and then the crappy neighbors find you. It’s the same idea.

Re: Is it worth to relocate for retirement?

Posted: Sat Aug 22, 2020 12:47 pm
by Broken Man 1999
Retired1809 wrote: Sat Aug 22, 2020 10:07 am Many years ago, I considered relocating. But talking with friends and family made me realize that leaving the place where I've lived for 50 years would mean leaving my support network, the fabric of my life: family including two older brothers and their children and grandchildren, our own children, our church including friends and fellow-volunteers, my network of medical providers including my primary care physician, my dentist, my orthopedist, my dermatologist, etc., and our neighborhood of friends. Beyond that, I'm familiar with the stores in my city whether it's Costco or Aldi. I have a network of trusted service providers, be it plumbers, electricians, painters, tree crews, etc. And finally years of knowledge of government and the politics of my state and community make it easier to understand what's going on around me and whom to believe and whom not to believe. In a pandemic, the value of familiarity with where one lives is greater than ever: knowing where to safely get a take-out, knowing where to shop safely and where to get help when needed. And after this pandemic, I'll look forward to vacationing but not relocating; to me that seems preferable. But each to her or his own.
This! Certainly a reason to stick close to the current locations if you are happy where you are.

Fortunately, I already live in a popular destination state for retirees. Gets a little windy sometimes, but there seems to be no avoidance of some natural disaster no matter where one lives.

Family is where I want to be, and so far DDs haven't moved outside the county where they were born.

Broken Man 1999

Re: Is it worth to relocate for retirement?

Posted: Sat Aug 22, 2020 12:48 pm
by KlangFool
OP,

How old are you? Do you qualify for Medicare yet? Are you early retired? Health insurance and MEDICAID qualification could make a significant difference.

https://www.kff.org/medicaid/issue-brie ... ctive-map/

https://www.healthcare.gov/medicaid-chi ... n-and-you/

KlangFool

Re: Is it worth to relocate for retirement?

Posted: Sat Aug 22, 2020 12:52 pm
by surfstar
augusto wrote: Fri Aug 21, 2020 12:23 pm
This is not a life style question, it is purely a financial question.

Thank you!
That seems to be the wrong priority. Figure out where you want to live (i.e. where you'll be happy-er -est) then figure out if you can afford it. If yes, done. If no, look into downsizing, reducing expenses, working longer, or the next place on the list where you'd want to live.

Re: Is it worth to relocate for retirement?

Posted: Sat Aug 22, 2020 12:56 pm
by smitcat
Scooter57 wrote: Sat Aug 22, 2020 12:15 pm When we looked in moving to other states from Massachusetts we were shocked to discover our taxes and other expenses would go way up! Massachusetts state tax has dropped over the years and it is not tiered to income. This is not the case in many other states where if you have significant investment income you are taxed at a much higher rate than others. New Hampshire which has the reputation for having no income tax has a 6% tax on investment income, which is more than MA's 5% tax on all but short term gains. Bogleheads should love that only short term gains are taxed at a high rate in MA which encourages NOT fooling around with the portfolio.

Property tax depends on where you live. the rates can differ from $14/$1000 assessed value to $26 or more. Ours is about $15. The neighboring town, nowhere as near as nice, is in the 20s. You can still find homes in the $200K range in rural areas but still be near colleges and towns with (in normal times) restaurants and independently owned shops.

Estate tax is the one big issue, which has made us do some large gifting to our kids which has worked out well. I continue to hope that MA will catch up with most other states in revising upward its definition of where the estate tax starts. However, unless you die with a million bucks, it is not an issue. That is where the tax starts.

When things really start making a difference is in the health care costs. Massachusetts has regulated out predatory insurers and long before Obamacare or Romneycare only allowed insurers that paid claims and did not pull shenanigans. Having lived in Connecticut where the insurance we had turned out to be a scam that excluded most of our claims when we needed it, I appreciated this. Medicare Advantage in MA is very affordable and offers superb coverage compared to what I saw in other states. In fact, I was horrified at the cost of Advantage plans elsewhere. We have excellent public schools and care for the elderly, and a culture that does what it can to take care of those who need care.

Our public libraries will get you any book anywhere in the state that you want to read for free and have lots of free ebooks too. I have researched extremely obscure topics from my small town drawing books from university libraries at no cost.

The weather sucks. I will agree to that, but after various trips all over the US we came home and realized we could not give up the stuff we loved about our region for better weather or a fancier home. Our modest home has over 3 acres of beautiful untouched forest, only 3 miles from shopping. There is natural beauty of all kinds within a day drive, rivers, seashore, mountains, forests. Once out of cities our traffic is benign, but we still have rich opportunities that most other rural areas don't provide. As an older person I discovered could not drive safely in most of the places with nicer weather because the roads were all 4 lanes going 60 MPH in the suburbs, everyone driving like maniacs, and in some places filled with retirees, the 80 and 90 year olds driving 60 scared the hell out of me because I know what has happened to my vision and reflexes even though I'm totally legal to drive without glasses!

All this points out that there are all kinds of low cost areas with a huge range in available culture, services, health, etc.

"Medicare Advantage in MA is very affordable and offers superb coverage compared to what I saw in other states. In fact, I was horrified at the cost of Advantage plans elsewhere"
You have posted this before and I just dont get it - please post a link which supports the statement.
Here is a recent link that has mostly the opposite information...

https://www.healthmarkets.com/content/m ... osts-index

"When we looked in moving to other states from Massachusetts we were shocked to discover our taxes and other expenses would go way up!"
Which taxes? Which States?

Re: Is it worth to relocate for retirement?

Posted: Sat Aug 22, 2020 1:05 pm
by beyou
States that have high sales tax but no or low income tax and low property tax are the best from a tax perspective. Nobody can force you to spend and pay sales tax, you control that somewhat but prop and income tax you have no control at all.

That said, my hcol state (NY) gives tax prop and income tax breaks to retirees, closing the gap. We still have high sales tax, but again, less of a concern to me.

But....taxes are not the only expense and they can change.
Utilities, housing, services like home and auto repair, groceries, restaurants, medical care, insurance can be much more costly in NY or MA than say FL. I can’t see how one could stay in MA or NY and spend same as in FL or other LCOL states.

Given we have family and friends in both NY and MA, not leaving the northeast anytime soon, but I realize it will cost me to stay.

Re: Is it worth to relocate for retirement?

Posted: Sat Aug 22, 2020 1:08 pm
by sport
M.Lee wrote: Sat Aug 22, 2020 11:58 am I'm struggle a lot with making this decision. I am in NJ the most expensive real estate tax state in the country and state taxes are among the highest too.


U.S. states with the highest property taxes in 2018
New Jersey: $8,780
Connecticut: $7,222
New York: $6,947
New Hampshire: $6,253
Massachusetts: $6,019
District of Columbia: $5,480
Rhode Island: $5,368
California: $5,354
Vermont: $5,331
Texas: $5,265

U.S. counties with the highest property taxes
Westchester, New York: $17,392
Rockland, New York: $12,925
Marin, California: $12,242
Essex, New Jersey: $12,161
Bergen, New Jersey: $11,771
Nassau, New York: $11,708
Union, New Jersey: $11,075
Fairfield, Connecticut: $10,754
Morris, New Jersey: $10,507
Passaic, New Jersey: $9,988
I would not make any decisions based on these statistics. In my area, real estate taxes vary a great deal depending on the community. You do not even have to go far to find this variation. In the Cleveland area, most real estate taxes go to the schools. In some suburbs, there is a large amount of commercial/industrial real estate which pays a lot of taxes thus allowing for lower tax rates. In other communities, the tax base is mostly single family homes. These cities will have higher rates. If you look at the more rural areas of the state, the COL is much lower, and thus the taxes are as well. I suspect this is true in other states as well.

Re: Is it worth to relocate for retirement?

Posted: Sat Aug 22, 2020 1:21 pm
by Sandi_k
MathIsMyWayr wrote: Sat Aug 22, 2020 11:46 am
illumination wrote: Sat Aug 22, 2020 11:38 am You need to figure out what your retirement will look like in terms of income, but I don't really buy into the "it all evens out" arguments regarding certain states and how they tax people. There's an ENORMOUS difference between what you will pay in taxes to live in somewhere like CA or MA versus Texas or Florida, especially if you are in a higher bracket. I understand it's not lower on every single thing, but looking holistically, it's simply lower or higher because that's what the voters in those states usually want. And usually higher tax states go hand-in-hand with higher cost of living. If you're not working, you're not getting the benefit of a higher salary in those areas.

Where I think it's splitting hairs are those "middle of the road" states and you make a lateral move to something similar. Or if you see yourself in a lower bracket for most of your retirement. But on the extremes, it makes a huge difference.
As a reference, my CA state tax is expected to be around 1/3 the federal tax in retirement. If I add the property taxes, it will be over 60% of the federal tax.
Well, we're staying in CA. With Prop 13, our increases in property taxes are capped. CA does not tax SocSec income.

And I will have retirees health care here, instead of a $6k lump sum each year to buy it in any other place. FWIW, a bronze plan in CA's ACA marketplace is $35k annually for us. So that's a $29k ANNUAL swing which makes California *cheaper* for us than other states.

Re: Is it worth to relocate for retirement?

Posted: Sat Aug 22, 2020 1:36 pm
by randomguy
beyou wrote: Sat Aug 22, 2020 1:05 pm States that have high sales tax but no or low income tax and low property tax are the best from a tax perspective. Nobody can force you to spend and pay sales tax, you control that somewhat but prop and income tax you have no control at all.
No states with low sales taxes and high income taxes are the best when retired:) They don't tax SS and I have a lot of control over my "income" in retirement. Between SS, ROTHs, and return on capital, I will be spending 120k with an income down around 20k. Can't avoid sales taxes as I like to eat:). In the end you always have to look at your exact situation as far as income, spending patterns, desired housing arrangements, and so on to figure out what is best for you.

I do expect the rest of the stuff matters more than taxes. Being able to live in nice 200k house instead of an 800k one, pays for a lot of years of taxes. If the savings are worth it depends on if you need the money to live how you want, will miss the old location, and what else you can do with the money. Those really aren't financial questions as much as lifestyle ones. Money is no object and I am finding a nice town outside of SF. If money is an object, I would rather spend 4k/month on trips, golf, fancy car, expensive dinners and so on, and live elsewhere. But that is a pure lifestyle choice.

Re: Is it worth to relocate for retirement?

Posted: Sat Aug 22, 2020 1:43 pm
by sport
randomguy wrote: Sat Aug 22, 2020 1:36 pm Can't avoid sales taxes as I like to eat:).
Groceries are tax free in Ohio. :mrgreen:

Re: Is it worth to relocate for retirement?

Posted: Sat Aug 22, 2020 2:10 pm
by augusto
Thanks everybody that commented in this thread.  :happy Very insightful and valuable opinions shared to all of us that makes this forum and its people great!  Yes, of course this is a lifestyle decision.  I just wanted to focus my question on the financial aspect.

Re: Is it worth to relocate for retirement?

Posted: Sat Aug 22, 2020 4:16 pm
by dang1
All these mentions of what folks are paying in property tax has made me jealous! I pay $14k/year here in Calif and that is with the increases capped due to prop. 13. We've been in this house for ~20 years, but someone moving in now would pay even more. It was a bit more bearable before SALT went away, but now..uggh.

Re: Is it worth to relocate for retirement?

Posted: Sat Aug 22, 2020 4:26 pm
by MathIsMyWayr
dang1 wrote: Sat Aug 22, 2020 4:16 pm All these mentions of what folks are paying in property tax has made me jealous! I pay $14k/year here in Calif and that is with the increases capped due to prop. 13. We've been in this house for ~20 years, but someone moving in now would pay even more. It was a bit more bearable before SALT went away, but now..uggh.
Your neighbors may be jealous of you for your pop. 13 capped bargain.

Re: Is it worth to relocate for retirement?

Posted: Sat Aug 22, 2020 4:45 pm
by dang1
MathIsMyWayr wrote: Sat Aug 22, 2020 4:26 pm
dang1 wrote: Sat Aug 22, 2020 4:16 pm All these mentions of what folks are paying in property tax has made me jealous! I pay $14k/year here in Calif and that is with the increases capped due to prop. 13. We've been in this house for ~20 years, but someone moving in now would pay even more. It was a bit more bearable before SALT went away, but now..uggh.
Your neighbors may be jealous of you for your pop. 13 capped bargain.

Good point! :D

Re: Is it worth to relocate for retirement?

Posted: Sat Aug 22, 2020 5:01 pm
by Gnirk
We've talked about moving for financial and/or weather-related reasons, but in reality there is no way I will leave family and friends who are our support network. Besides, most of the warm-weather areas have things I want nothing to do with: alligators, poisonous snakes, humidity, very hot summers, high traffic (San Diego area). Did I say humidity? We've been snowbirds for the past 21 years, and when we are done with that, we will stay in Washington.

Re: Is it worth to relocate for retirement?

Posted: Sat Aug 22, 2020 5:06 pm
by cadreamer2015
That seems to be the wrong priority. Figure out where you want to live (i.e. where you'll be happy-er -est) then figure out if you can afford it. If yes, done. If no, look into downsizing, reducing expenses, working longer, or the next place on the list where you'd want to live.
+1

There is more to life than money. It’s worth it to relocate in retirement if it means you end up living someplace you prefer. I’m not going to move to Nevada to escape income taxes - I like where I live. That’s why we moved to North County San Diego when I stopped working full time in NYC.