Potential Florida Move from NJ

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
Post Reply
Topic Author
jamesdz
Posts: 44
Joined: Fri Aug 10, 2012 5:01 pm

Potential Florida Move from NJ

Post by jamesdz »

Dear Bogleheads,
Will keep this short & can supply more details as requested.
Wife & I are 70 - no immediate family (except for live in son) - in NJ; home paid-off years ago - all in good health;
tired of Northeast winters & paying high property & NJ state Income Tax on pensions (K$97/yr) & soon to be realized RMDs;
Big Issue - son will pay K250-K$300 NJ State Estate Tax if we both pass as NJ resident (confirmed by CPA).
A move to Florida appears logical if we can get past the hassle of selling home & physically moving.
Wife likes AZ or New Mexico - but not as attractive as FL from a tax standpoint.
Major fear is - Fear of the Unknown - how will family adapt, will we make good choices on next home, neighbohood,
establish new network of friends/associates, etc,
Could sell NJ home & rent for a while in FL but seems like an added hassle & two moves vs one move.
Would like to solicit input from others on this topic.
Thank you.
Jamesdz
Sidney
Posts: 6784
Joined: Thu Mar 08, 2007 5:06 pm

Re: Potential Florida Move from NJ

Post by Sidney »

Rent for a while, whatever you do. Don't get too hung up on taxes. When evaluating cost, look at the whole picture. Spend some time thinking about what is really important to you. Depending on your financial situation, cost may not be high on the list.
I always wanted to be a procrastinator.
jennypenny
Posts: 9
Joined: Thu Jun 07, 2012 3:42 pm

Re: Potential Florida Move from NJ

Post by jennypenny »

Could you buy a place in Florida and establish residency there, while keeping the place in NJ for a while? (I think the rule used to be 6 months+, not sure now) You could spend 8 months in FL and 4 months in NJ while you decide which you like better and still achieve your tax goals.
User avatar
midareff
Posts: 7711
Joined: Mon Nov 29, 2010 9:43 am
Location: Biscayne Bay, South Florida

Re: Potential Florida Move from NJ

Post by midareff »

I would recommend you rent a furnished condo on the water for six months to a year to determine if you like the area(s). With renting something furnished all you are moving is some clothes and perhaps a trunk full of some small household/personal items. ... very simple. I live in Miami and retired recently. I looked at both Florida coasts to see if there was another location I wanted to be and decided to stay where I am. There are lovely coastal areas throughout Florida, some with still devastated pricing, and you both can have fun with day trips and overnighters to places on art show nights, etc. Have fun... that's what's left.
JDCPAEsq
Posts: 1835
Joined: Mon Mar 05, 2007 2:58 pm
Location: Southwest Florida

Re: Potential Florida Move from NJ

Post by JDCPAEsq »

To pay New Jersey estate tax of that magnitude you are obviously comfortable financially. My impression is that you are too hung up on income, property and estate taxes. As much as I enjoy Florida where I've spent half my life since moving from New York State, I wouldn't recommend moving here for the tax savings alone. If you are happy in New Jersey stay there. Moving for tax savings isn't worth it. You can always visit a warmer climate for a few months in the winter.
John
Grt2bOutdoors
Posts: 25625
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: Potential Florida Move from NJ

Post by Grt2bOutdoors »

Have you considered creating a trust vehicle that may mitigate the NJ estate tax? A CPA can confirm, but can the same CPA suggest a way to reduce the potential tax levy? Perhaps make annual gifts to son of $26K to reduce overall size of estate?

BTW, you are not alone with these thoughts, there are many many more residents of NJ leaving every day to escape the oppressive burden of living, Delaware seems to be a "most favored state" :confused - won't escape the cold though. Arizona is nice: Scottsdale is popular with snowbirds, except in the summer months (May-August) when you can fry two eggs on the sidewalk - with or without butter. :happy
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
Grt2bOutdoors
Posts: 25625
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: Potential Florida Move from NJ

Post by Grt2bOutdoors »

JDCPAEsq wrote:To pay New Jersey estate tax of that magnitude you are obviously comfortable financially. My impression is that you are too hung up on income, property and estate taxes. As much as I enjoy Florida where I've spent half my life since moving from New York State, I wouldn't recommend moving here for the tax savings alone. If you are happy in New Jersey stay there. Moving for tax savings isn't worth it. You can always visit a warmer climate for a few months in the winter.
John
As always, sound advice.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
JDCPAEsq
Posts: 1835
Joined: Mon Mar 05, 2007 2:58 pm
Location: Southwest Florida

Re: Potential Florida Move from NJ

Post by JDCPAEsq »

I note in an earlier post you have a portfolio of over $3 million. Even if the State of New Jersey takes a slice of that, your son will inherit a substantial sum. Why move from an area you seem to enjoy to avoid having 10%~ lost to estate taxes?
John
l2ridehd
Posts: 261
Joined: Sat Sep 10, 2011 5:18 am

Re: Potential Florida Move from NJ

Post by l2ridehd »

Go rent a home in Florida for a month in the spring summer time frame. Maybe April or May. See if you like it. Try The Villages, lots to do, easy to meet and make new friends, and enjoy the lifestyle there. If it works out consider buying a place. If it doesn't you not invested a lot to try it out. Example of rental I am suggesting, but there are many available there that time of year.

www.ourhome4rent.com/2266
NYBoglehead
Posts: 1588
Joined: Fri May 25, 2012 9:38 am

Re: Potential Florida Move from NJ

Post by NYBoglehead »

You can also gradually gift your assets to your son while still living.

If I'm not mistaken (and somebody PLEASE correct me if I am, I am not an accountant/tax attorney) by split-gifting you and your wife can each gift 13k/annually for a total of 26k.

That should help you download your taxable estate as that appears to be a concern. If you are financially comfortable (which it appears you are) I recommend not moving for tax purposes alone, but being from the high tax state of NY I completely understand the desire to keep more of what you earned/accumulated and not have it taxed away.

I think the best course of action, as others have noted, is to rent in Florida and maybe stay there long enough each year to meet the residency criteria re: taxation. You don't want to have to find ALL new friends in FL, nothing wrong with keeping your current crew up in NJ and finding some seasonal friends down in FL.
carolinaman
Posts: 5463
Joined: Wed Dec 28, 2011 8:56 am
Location: North Carolina

Re: Potential Florida Move from NJ

Post by carolinaman »

If you are still serious about moving after reading earlier posts, I highly recommend renting in the new location first. Perhaps you could rent a condo in the winter months in a place you think you would like. I live in Charlotte NC area. The statitician at the Chamber of Commerce told me the top 3 states people come to Charlotte from are New York, New Jersey and Florida. I was a little surprised at Florida but he explained most of these are people from Northeast who moved to Florida and found they really missed four seasons of weather. They moved to Carolinas because it has four seasons but winters are milder and summers not as oppressive as Florida. He calls those folks halfbacks and we have a lot of them.

I am not recruiting for Carolinas but just pointing out that you should spend some time in a radically different place before buying home. Best wishes.
User avatar
bottlecap
Posts: 6906
Joined: Tue Mar 06, 2007 10:21 pm
Location: Tennessee

Re: Potential Florida Move from NJ

Post by bottlecap »

I second renting. You can probably rent a condo for six months to a year, or even a trailer in a retirement community (don't scoff, some of the trailers are nice - not as big as a house, but nice). That will give you an idea of the area and where you want to buy. Who knows, maybe you'll even decide to try AZ after a year.

That's what my folks did and it worked out well. Property taxes in Florida aren't low and neither is insurance, but the weather is great, along with the other advantages you mention.

Good luck,

JT
rec7
Posts: 2369
Joined: Tue Oct 28, 2008 7:22 pm

Re: Potential Florida Move from NJ

Post by rec7 »

Have you thought about other states with weather closer to NJ but taxes like FL. You are moving for taxes not weather if I am reading you right. Looks like you have a lot of choices http://wills.about.com/od/stateestateta ... etaxes.htm
Calm Man
Posts: 2917
Joined: Wed Sep 19, 2012 9:35 am

Re: Potential Florida Move from NJ

Post by Calm Man »

Grt2bOutdoors wrote:
JDCPAEsq wrote:To pay New Jersey estate tax of that magnitude you are obviously comfortable financially. My impression is that you are too hung up on income, property and estate taxes. As much as I enjoy Florida where I've spent half my life since moving from New York State, I wouldn't recommend moving here for the tax savings alone. If you are happy in New Jersey stay there. Moving for tax savings isn't worth it. You can always visit a warmer climate for a few months in the winter.
John
As always, sound advice.
I have been contemplating this for years. And admittedly NJ has "cold" winters, but not horrible. The summers in FL form what I've seen outweigh that. Life is short and as we get older it gets shorter. I would not move for these reasons of taxes and I think your situation with family will be better than having to get on a plane periodically when you are 80 to visit kids, etc for a few days or a week at a time. Also, who knows what will happen with taxes down the road? States probably will gravitate more towards one another as they all have similar issues.
Cialo
Posts: 15
Joined: Thu Jul 26, 2012 10:36 am

Re: Potential Florida Move from NJ

Post by Cialo »

My in-laws moved down to FL more than a decade ago from MA. Same reasons-taxes, cost of living, better weather.

Their children, and their childrens' families, are all in New England and VA. We all have young children, careers, and very active lives. (Read this to mean visits down were not frequent or easy or affordable as they told themselves they would be. And the kids missed their grandparents in their every day lives. But traveling was unexpectedly difficult and expensive for them as well.)

Anyway. They bought a beautiful house, made new friends, tried to become part of the community. MIL hated the summers, though, even though they were in northern FL. And each summer she hated it more and more. And they missed so much of our lives and their grandkids' lives. While they made friends, they didn't seem to make true connections, either. It never completely felt like home, they said.

Then my FIL had a medical emergency. They were alone, and though my sister-in-law managed to get down there, it became a huge issue as he recuperated. Who could fly down and afford to stay? Take time off from work, who'd watch the kids while gone...who'd check in on them...their newfound friends in FL weren't able to help.

Then they both began having medical problems. They're 80 and 78 now, so. Life is not as easy for them as it once was.

Last Nov they sold their FL home. Said goodbye to all the friends they'd made and rerooted AGAIN. They moved to VA, quite close to their son and his wife, so they can all keep an eye on them and help them out. They're now within driving distance of us all, so we can see them more often as well. They're back in touch w all their old friends and see them more often now. They found the winters better, summers more tolerable, and finances not as great as FL, but eh. They're trying to make up for lost time w the grandkids as well, esp the VA crew who are soon off to college. But I'd be lying if I said any of them really believed it was possible.

So. I guess my point. My in-laws moved for taxes and weather, but didn't take into account how much leaving their friends and family would impact their lives. How lonely it would be. How their lives, and health, could truly change over such a short period of time. How they never fell in love w FL. And now they're back north and dealing with a lot of guilt and regret. And I also know many others who have made the move and it all turned out wonderful. It's all food for thought as you weigh and make this decision, I guess. Good luck, and may your choice fall under the wonderful, whatever it may be.
User avatar
G12
Posts: 1598
Joined: Mon Apr 16, 2007 2:35 pm

Re: Potential Florida Move from NJ

Post by G12 »

The comments regarding the potential impact of moving from your friends and possibly relatives is good to consider. I have lived in the deep south my entire life, spent a good amount of time in FL while having lived here in ATL 20+ years, and you would want to go during the worst months to try FL if you are going to sell your home, ie June into September, if thinking about permanently moving there. I am not a fan and also spent a lot of years in Louisiana dealing with heat, humidity, etc. The sand gnats in FL can be nasty if you go inland. I like FL a good deal in cooler months, but would not live there year round, my wife would not consider moving to FL at all. My wife and I continue to discuss moving from GA to NM or other places with less humidity. Heat is one thing, heat index is another, and we have grown to strongly dislike high humidity over the years. We are leaving in a few weeks to visit NM again. It is difficult to make a good decision without spending significant time in what would be good and bad seasons in areas of interest, otherwise it is like being on vacation when most places visited seem great but permanently living there may be a different scenario. Good luck.
jebmke
Posts: 25480
Joined: Thu Apr 05, 2007 2:44 pm
Location: Delmarva Peninsula

Re: Potential Florida Move from NJ

Post by jebmke »

Cialo wrote:MIL hated the summers, though, even though they were in northern FL
Northern FL is no better than central FL unless you are over on the east coast -- and on the water.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
rec7
Posts: 2369
Joined: Tue Oct 28, 2008 7:22 pm

Re: Potential Florida Move from NJ

Post by rec7 »

delete
rec7
Posts: 2369
Joined: Tue Oct 28, 2008 7:22 pm

Re: Potential Florida Move from NJ

Post by rec7 »

tired of Northeast winters & paying high property & NJ state Income Tax on pensions (K$97/yr)



What is your total NJ state tax bill every year? That might help us give you a better answer also.
Last edited by rec7 on Thu Oct 18, 2012 3:06 pm, edited 2 times in total.
rec7
Posts: 2369
Joined: Tue Oct 28, 2008 7:22 pm

Re: Potential Florida Move from NJ

Post by rec7 »

How about Nevada no income tax and weather your wife would like more. No estate tax either.
http://wills.about.com/od/stateestateta ... etaxes.htm
User avatar
Watty
Posts: 28860
Joined: Wed Oct 10, 2007 3:55 pm

Re: Potential Florida Move from NJ

Post by Watty »

If you do move then you will likely want to go ahead and sell your house if you have been in it for a long time and the price has appreciated. The problem is that if you rent it too long you will lose the homeowners capital gains tax exclusion.

I would agree with the suggestion of renting first.

A lot of people from the northeast move to Florida to retire and find they don't like it there so some of them end up moving to retirement areas in the North Georgia mountains or North Carolina.

They even have a nickname, "Halfbacks" because they moved halfway back.
diasurfer
Posts: 1855
Joined: Fri Jul 06, 2007 8:33 pm
Location: miami-dade

Re: Potential Florida Move from NJ

Post by diasurfer »

One word:

snowbird
User avatar
Toons
Posts: 14467
Joined: Fri Nov 21, 2008 9:20 am
Location: Hills of Tennessee

Re: Potential Florida Move from NJ

Post by Toons »

Since I moved to Tennessee about a year and a half ago,I certainly have met a lot of Northerners who moved to Florida,then "up to Tennessee",they are referred to as "halfbacks". I always ask why?.Answers I get are insurance,heat,bugs,among a few. :happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
Calm Man
Posts: 2917
Joined: Wed Sep 19, 2012 9:35 am

Re: Potential Florida Move from NJ

Post by Calm Man »

rec7 wrote:tired of Northeast winters & paying high property & NJ state Income Tax on pensions (K$97/yr)



What is your total NJ state tax bill every year? That might help us give you a better answer also.
I too was surprised by this so I checked as I am a New Jersey taxpayer. OP states that the pension income is 97K. I do not know if there is other income. at 100K, a couple pays $2700 in NJ state income tax. But there is a 10K exclusion per person from pensions, so at 80K, the tax is 1700 a year. Now any amount higher will be taxes at rates of about 5% until the max of 6.37% at about 150K. This seems rather small compared to a few plane trips. Property taxes are high but insurance costs are low relative to Florida.
rec7
Posts: 2369
Joined: Tue Oct 28, 2008 7:22 pm

Re: Potential Florida Move from NJ

Post by rec7 »

NJ income taxes 2.45%
NJ Property taxes $29.76 per thousand
One cities example

Most states income taxes are twice that if they have one and most states property taxes are about 1/3 of that.
dennygt
Posts: 73
Joined: Wed Feb 29, 2012 3:00 pm

Re: Potential Florida Move from NJ

Post by dennygt »

I retired last year and wanted to go to Florida to play softball. Wife a bit unsure so we rented for three months. Went great, going back this year, again for three months, but different park. I also spent a lot of time researching the subject and found a number of knowledgable web-sites/forums, etc:

http://www.topretirements.com/Home.html

http://www.early-retirement.org/forums/

http://gotoretirement.com/

Hope something here helps.
User avatar
nvboglehead
Posts: 489
Joined: Tue Feb 20, 2007 11:44 am

Re: Potential Florida Move from NJ

Post by nvboglehead »

I second the recommendation for retiring in Nevada. We moved from SF 15 years ago and love the suburban life of Las Vegas. Away from the Strip, it is like living in Phoenix. If you do not want to deal with summer dry heat, consider Reno. No state income tax and the real estate is inexpensive now in the state.


Dale
Learn from the Bogleheads! Do you want to work for your money or have your money work for you?
Valuethinker
Posts: 49038
Joined: Fri May 11, 2007 11:07 am

Re: Potential Florida Move from NJ

Post by Valuethinker »

JDCPAEsq wrote:To pay New Jersey estate tax of that magnitude you are obviously comfortable financially. My impression is that you are too hung up on income, property and estate taxes. As much as I enjoy Florida where I've spent half my life since moving from New York State, I wouldn't recommend moving here for the tax savings alone. If you are happy in New Jersey stay there. Moving for tax savings isn't worth it. You can always visit a warmer climate for a few months in the winter.
John
John

I'd agree with you about 'too hung up' BUT if their son has special needs, that money could be important (and some kind of trust arrangement is probably essential).

I think the more germane thing is whether Florida is really the right place. Some love it, some hate it.

For me, if I were moved to the SE USA, I'd consider North Carolina. OK summers are dreadful (but better in mountains?) but you have the coast there, you have mountains, it's not too too crowded, you have a good hub airport.

New Mexico sounds neat but I'd worry about being quite isolated.

There are probably nice bits of Arizona (Tucson? Flagstaff?). Phoenix sounds like my idea of hell-- big sprawling, 'no there there'.

Whatever OP decides to do, renting for a year, and particularly the bad bits of the year (summer, hurricane season etc.) seems to be essential.
JDCPAEsq
Posts: 1835
Joined: Mon Mar 05, 2007 2:58 pm
Location: Southwest Florida

Re: Potential Florida Move from NJ

Post by JDCPAEsq »

Valuethinker wrote:I'd agree with you about 'too hung up' BUT if their son has special needs, that money could be important (and some kind of trust arrangement is probably essential).
I was just emphasizing the point, later stated by others, that one shouldn't let taxes completely dictate one's state of residence. Also, OP has indicated in another thread that he has a net worth over $3 million which would seem plenty adequate for an only child. I also didn't see any mention of "special needs", although living at home with 70 year old parents might indicate that.
John
DoWahDaddy
Posts: 319
Joined: Sat Jul 02, 2011 9:32 am

Re: Potential Florida Move from NJ

Post by DoWahDaddy »

rec7 wrote:NJ income taxes 2.45%
ummm... No.
"I've worked in the private sector. They expect results." - Dr. Raymond Stantz
rec7
Posts: 2369
Joined: Tue Oct 28, 2008 7:22 pm

Re: Potential Florida Move from NJ

Post by rec7 »

DoWahDaddy wrote:
rec7 wrote:NJ income taxes 2.45%
ummm... No.
You are right OP would be - 6.37 percent on taxable income between $75,001 and $500,000
Dandy
Posts: 6701
Joined: Sun Apr 25, 2010 7:42 pm

Re: Potential Florida Move from NJ

Post by Dandy »

A lot of enjoying where you live is what you like and what you are used to. I understand saving money/taxes is a big deal. I don't enjoy the NJ winters much either. I would strongly suggest renting. Florida is very different from NJ not just in climate and taxes. Make sure you like the area and climate/culture etc then buy.
rec7
Posts: 2369
Joined: Tue Oct 28, 2008 7:22 pm

Re: Potential Florida Move from NJ

Post by rec7 »

I thought OP would love this map Where Not To Die In 2012
http://www.forbes.com/sites/ashleaebeli ... e-in-2012/
Topic Author
jamesdz
Posts: 44
Joined: Fri Aug 10, 2012 5:01 pm

Re: Potential Florida Move from NJ

Post by jamesdz »

Thanks to all Bogleheads for your thoughtful replies.
Based on the majority of responses - and my wife's opinion as well - we will rent a condo in the St. Augustine, FL area for the
month of January, 2013. This will give us our first extended taste of the area. Could argue that planning for an extended stay in July/August might be a better "test" - however, if we keep delaying any action to move forward we will never escape from NJ. Best Regards to all !
jdruz
JDCPAEsq
Posts: 1835
Joined: Mon Mar 05, 2007 2:58 pm
Location: Southwest Florida

St. Augustine in January

Post by JDCPAEsq »

Do you know that the avergage high in St. Augustine in January is 67 and the average low is 46? January is the coldest month of the year in Florida. You won't be doing much swimming.
John
Valuethinker
Posts: 49038
Joined: Fri May 11, 2007 11:07 am

Re: Potential Florida Move from NJ

Post by Valuethinker »

JDCPAEsq wrote:Do you know that the avergage high in St. Augustine in January is 67 and the average low is 46? January is the coldest month of the year in Florida. You won't be doing much swimming.
John
Most people seem to like living in Florida in January.

Peak holiday periods and summers are another matter.
JDCPAEsq
Posts: 1835
Joined: Mon Mar 05, 2007 2:58 pm
Location: Southwest Florida

Re: Potential Florida Move from NJ

Post by JDCPAEsq »

Valuethinker wrote:Most people seem to like living in Florida in January.
Almost always, the worst weather of the year. Nevertheless, I like living in Florida 12 months a year but don't tell anyone else.
John
PreemieNurse
Posts: 57
Joined: Fri Oct 26, 2012 1:19 pm

Re: Potential Florida Move from NJ

Post by PreemieNurse »

I can't answer the financial aspects of your question, but can tell you a bit about about living in Florida for 30 years. That's great that you are going to try out St. Augustine in January, but before committing fully to the idea, I recommend that you stay during the summer, especially when hurricane season gets active and the humidity is unbearable. Maybe August-September. There's a reason why so many elderly are snowbirds and not year-round residents.

Great choice on St. Augustine though. If we buy a beach condo, that's where I'd like it to be. It's touristy, but has more secluded beaches nearby and I like the historical sites.
Post Reply