Retirement Friendly States

[LiveSimple]

Retirement Friendly States

Folks which states you choose for your retirement and what were the major decisions point for your choosing the state.

Due to retirement income, tax treatment
Due to weather or sue to family and friend
Due to the activities.

As we are thinking on these lines, do want to hear who had the experience or in the planning.

[livesoft]

I think every state is retirement friendly except perhaps New Jersey.

Basically, you are better off eliminating states than trying to zero in now on retirement friendly states.

[Jack FFR1846]

Depends.

There are states that are very tax friendly that you couldn't pay me to live in.

I'll be staying in Massachusetts.

[susa]

Outside the States, several places. All you need is dual passport and you even get almost free healthcare with world class doctors/nurses.

[RickBoglehead]

There are many websites devoted to this, because criteria is in the eye of the beholder. There are clearly states that are not retirement friendly including New Jersey, New York, Massachusetts, Vermont, and more.

For example, "most drivers sit on phonebooks" is not a criteria for me to eliminate Florida...

When you start compiling information, make sure you are thorough. While a state may look good, there may only be a few specific areas of that state where you might want to live due to available resources like the distance to a major hospital.

Also make sure you're comparing apples and apples, not apples and bananas. While I may pay 1/3rd the property tax for a comparable house in South Carolina (once a resident, as non-residents pay 3x the tax rate), I will pay more in annual vehicle taxes including cars, boats, RVs, etc. But my car insurance bill in Michigan is the highest in the nation. And gasoline prices vary widely if you're going to maybe have a boat that burns a lot of gas. Some states exclude all of Social Security income, but just over a dozen don't exclude it. Some exclude more, like $30,000 for a couple. And so forth. Massachusetts has a very low threshold for estate taxes.

Our approach so far is to try and compile info, knowing that a $5,000 or $10,000 per year difference likely won't be a reason to not live in the state during retirement. However, I wouldn't move to Massachusetts because of the estate tax threshold. Or to Vermont because of the income tax.

One of the things that we did first was take a map of the US, with states shown, and cross out states for climate. We want warmer than the northern states, but not the sweltering heat of some states. That eliminated more than 1/2 of the states in the country.

We then cross-referenced the list with top public universities, because we live currently next to the top public university in the country, and it draws culture, development, etc. And, many states give free tuition to people 60+ or 62+ to take any class (in-person classes, for degrees even).

Here's a few sites I have bookmarked:

https://taxfoundation.org/center/state-tax-policy/

https://www.retirementliving.com/taxes-by-state

https://www.kiplinger.com/fronts/channe ... index.html

https://www.kiplinger.com/tool/retireme ... /index.php

https://taxfoundation.org/does-your-sta ... tance-tax/

https://smartasset.com/retirement/

https://money.cnn.com/calculator/pf/cost-of-living/

https://www.nerdwallet.com/cost-of-living-calculator

http://successfulaging.milkeninstitute.org/

https://factfinder.census.gov/faces/nav ... ndex.xhtml

https://www.bestplaces.net/

[vu8]

States with no state income taxes: Washington, Nevada, Texas, Wyoming, South Dakota, Florida and Alaska

[marstaton4]

States with no state income taxes: Washington, Nevada, Texas, Wyoming, South Dakota, Florida and Alaska

Isn't Tennessee on here as well?

[HueyLD]

Retirement friendly is such a vague term.

It depends on what issues are important to you and everyone has different priorities.

There are desirable places that are way too expensive even though I wish I could afford them.

There are cheap places but the quality of life and people is so poor that I wouldn't retire there even if they bribed me.

I don't believe in perfection. So, between the two extremes stated above, there are a lot of places and being flexible enough to compromise can be very helpful.

And it may take more than one move to find out where you want to retire.

[rob]

I have not seen a great way to figure this out ** I'll read thru the links above **

It's far from as simple as which state - need to take into account what type of income and whether that's excluded; Some counties reduce local taxes; Some have exclusions; some have death tax that do not match the federal, so retirement might be ok but not dying. Then on the flip side, what are the costs.

[RickBoglehead]

States with no state income taxes: Washington, Nevada, Texas, Wyoming, South Dakota, Florida and Alaska

Now cross reference that against two criteria. Three of these states have most of their population around only a few cities (Wyoming, South Dakota, and Alaska). Now drop out the ones that have a very hot or very cold climate. Take out rainy and nothing is left.

State income taxes aren't everything, just one factor.

[RickBoglehead]

There are cheap places but the quality of life and people is so poor that I wouldn't retire there even if they bribed me.

If the people are poor, how could they bribe you to retire there?

[HueyLD]

I indicated that I didn't like poor quality of life and poor quality people.

There are places where residents are very much anti outsiders and very clickish and I consider such people of poor quality.

[coffeeblack]

Outside the States, several places. All you need is dual passport and you even get almost free healthcare with world class doctors/nurses.

Can you name those countries? Your post is very general. Also, no healthcare is free. Citizens in those several places pay for it with taxes. But I would ask that you disclose the location of those "several places".

[Jack FFR1846]

States with no state income taxes: Washington, Nevada, Texas, Wyoming, South Dakota, Florida and Alaska

New Hampshire

who also has no sales tax

and also has no limit on property tax increases

[stinkycat]

New Hampshire does have a tax on interest and dividend income, which does cause a bit of concern as a potential retiree. Property taxes are steep as well. In the case of New Hampshire one really does have to do the math.

[RickBoglehead]

New Hampshire does have a tax on interest and dividend income, which does cause a bit of concern as a potential retiree. Property taxes are steep as well. In the case of New Hampshire one really does have to do the math.

Right. Perfect example of comparing apples to apples.

We expect to have interest and dividend income of such a level that taxes will matter. Then excluding Social Security income from taxes adds to that.

[SchruteB&B]

States with no state income taxes: Washington, Nevada, Texas, Wyoming, South Dakota, Florida and Alaska

There are other states that are effectively no state income tax for retirees because they don’t tax retirement income, like Illinois and Pennsylvania (there are others I believe, these are just the two I can recall).

[cadreamer2015]

We moved from New Jersey to California. Reasons: climate, family, friends, activities, general quality of life. Taxes were not a major consideration, but they are lower here than they were in NJ, especially property taxes. YMMV

[mnnice]

States with no state income taxes: Washington, Nevada, Texas, Wyoming, South Dakota, Florida and Alaska

Now cross reference that against two criteria. Three of these states have most of their population around only a few cities (Wyoming, South Dakota, and Alaska). Now drop out the ones that have a very hot or very cold climate. Take out rainy and nothing is left.

State income taxes aren't everything, just one factor.

South Dakota residency only requires you to be in the state the night before you get your ID/driver’s license.

[RickBoglehead]

South Dakota residency only requires you to be in the state the night before you get your ID/driver’s license.

That's great for an RV'er, but those with physical homes are going to run up against whether they meet the residency requires of the state with the home in it.

[mnnice]

South Dakota residency only requires you to be in the state the night before you get your ID/driver’s license.

That's great for an RV'er, but those with physical homes are going to run up against whether they meet the residency requires of the state with the home in it.

I think the likelihood of me being a South Dakota resident in the future is high. The odds that I would spend a winter there are approaching nil. Being a nomad sounds much better.

[vu8]

States with no state income taxes: Washington, Nevada, Texas, Wyoming, South Dakota, Florida and Alaska

Isn't Tennessee on here as well?

Tennessee taxes dividends and interests that's the problem

[Glockenspiel]

Couldn’t pay me to live in almost any of the southeastern states. I’ll be staying in Minnesota, where it’s beautiful, but just cold enough to keep out the riff-raff.

[Alaric]

States with no state income taxes: Washington, Nevada, Texas, Wyoming, South Dakota, Florida and Alaska

Isn't Tennessee on here as well?

Tennessee taxes dividends and interests that's the problem

It is being phased out, though. It is only 2% this year, 1% next year, and 0% in 2021 and forward.

https://www.tn.gov/revenue/taxes/hall-i ... rates.html

[vu8]

Best South American countries for retirees: Mexico(High crime rate, fantastic immigration policy), Panama, (Florida), Dominican Republic, Chile (any country with a rentista visa, exclusively designed for relatively wealthy retirees)


Best asia-pacific countries for energetic retirees: Singapore, Hong Kong, Thailand and the Phillippines

High cost, paradise-like but no crime locations: Gated communities of Florida, Key Biscayne Florida, Boca Raton Florida, Naples Florida, Monaco, Iceland, Malta, Cyprus

[jebmke]

States with no state income taxes: Washington, Nevada, Texas, Wyoming, South Dakota, Florida and Alaska

Now cross reference that against two criteria. Three of these states have most of their population around only a few cities (Wyoming, South Dakota, and Alaska). Now drop out the ones that have a very hot or very cold climate. Take out rainy and nothing is left.

State income taxes aren't everything, just one factor.

South Dakota residency only requires you to be in the state the night before you get your ID/driver’s license.

Often the issue isn't proving you are a resident to the destination state with no tax, but rather proving to the state you left that you are no longer a resident there. These are related but not necessarily mutually exclusive tests.

[rxv]

Couldn’t pay me to live in almost any of the southeastern states. I’ll be staying in Minnesota, where it’s beautiful, but just cold enough to keep out the riff-raff.

Minnesota worked for us for 20+ years while kid was growing up (I think one the best school systems in the country). Now, son going to college, the brutal winters and wet/hot/humid summers with bugs is getting too much. We are thinking Colorado next year. 8 - 10 working years left, then retire.

[Davistax]

Delaware - 1. very low property taxes 2. No sales tax 3. Low income tax rates with full Social Security exemption plus $ 12,000 exemption (per taxpayer meaning $ 24,000 for married couples) for pension income (with pension income defined as pension, distributions from IRA's/401k/403b/457, interest, dividends & rent.

[Isabelle77]

Depends.

There are states that are very tax friendly that you couldn't pay me to live in.

I'll be staying in Massachusetts.

To each his own We'll be running out of Massachusetts as soon as we can, never to return to the Northeast.

Our plan is Washington state with a condo in Arizona for the rainiest months.

[EddyB]

States with no state income taxes: Washington, Nevada, Texas, Wyoming, South Dakota, Florida and Alaska

Now cross reference that against two criteria. Three of these states have most of their population around only a few cities (Wyoming, South Dakota, and Alaska). Now drop out the ones that have a very hot or very cold climate. Take out rainy and nothing is left.

State income taxes aren't everything, just one factor.

Eastern Washington.

[WildBill]

Howdy

Texas as a residence state.

Summers in Colorado, the high country in New Mexico, and Canada.

W B

[Tdubs]

We then cross-referenced the list with top public universities, because we live currently next to the top public university in the country, and it draws culture, development, etc. And, many states give free tuition to people 60+ or 62+ to take any class (in-person classes, for degrees even).

Why would you want to leave Berkeley?

[student]

Depends.

There are states that are very tax friendly that you couldn't pay me to live in.

I'll be staying in Massachusetts.

Funny. I did an exercise about a year ago and found a city that is on paper perfect. But it is not a state that I would want to live in.

[lws]

I worked and retired in California.

I chose in SoCal because:
The weather is good.
Activities are plentiful.
Medical facilities are everywhere.
The people I love are here.

[ohai]

The top criteria I've seen in retired people are:
1) They already live there and don't want moving stress or leaving familiar community.
2) They move close to where their kids or family live. This is even more important when you get very old and need people to care for you.

I barely know anyone nowdays who moved primarily for tax or financial reasons.

[JoeRetire]

Retirement Friendly States

Folks which states you choose for your retirement and what were the major decisions point for your choosing the state.

Due to retirement income, tax treatment
Due to weather or sue to family and friend
Due to the activities.

As we are thinking on these lines, do want to hear who had the experience or in the planning.

We chose Maine.
Because that's where we wanted to live for the rest of our lives.

[JoeRetire]

There are clearly states that are not retirement friendly including New Jersey, New York, Massachusetts, Vermont, and more.

And yet many folks retire there quite happily.

[alpenglow]

If you have a state pension, NY is definitely friendly to retirees.

[tomd37]

Tennessee taxes dividends, capital gain distributions and some interest items. However the Tennessee "Hall Tax" ends in two years. The tax rate is 2% for 2019, 1% for 2020, and is fully repealed as of January 1, 2021. Tennessee has exemption amounts based on marital status and also has exemptions based on income for those 65 or over.

[Dottie57]

Depends.

There are states that are very tax friendly that you couldn't pay me to live in.

I'll be staying in Massachusetts.

Same feeling as above, but will be staying in Minnesota. But may snowbird down south for a month.

[bengal22]

I find that Ohio is very friendly to retirees. When I drive others wave at me and some honk. I feel very welcome. I am glad I chose Ohio where they make you feel your number one

[Jack FFR1846]

Depends.

There are states that are very tax friendly that you couldn't pay me to live in.

I'll be staying in Massachusetts.

Same feeling as above, but will be staying in Minnesota. But may snowbird down south for a month.

To me, the first question on any place I'd consider to be "retirement friendly" would be "How friendly is the state for use of snow machines?". To me, anything over 70 degrees is too hot.

[almostretired1965]

Moved to Washington state, just outside of Seattle, and we are likely to stay here for retirement, though possibly moving further south to Vancouver, WA near Portland.

Advantages:

1. Taxes. No state income tax. Overall the state/local tax structure here is somewhat regressive (e.g. 10% sales tax), in my assessment, so that helps anyone with high current/expected income. (Note that this is not a comment about whether it is good public policy.)

2. Weather. Not much humidity and the summers are very mild. Near the coast the winters are mild as well. Not much snow, though when you get more than 6 inches and it does not melt right away, something that happened last winter, it's a complete disaster.

3. Outdoor recreation. Close to both ocean and mountains.

4. Cultural amenities, from museums to sports to higher ed.

5. Diversity. High levels of immigrant population, both from overseas and the rest of the country. This results in the one necessary factor for me when choosing a place to settle permanently, the presence of good quality, inexpensive, ethnic cuisine.

6. Good access to quality medical care.

Disadvantages

1. Weather. It's not Palo Alto. Gloomy with persistent drizzle from late Fall through Spring, and very short days in winter. There are some negatives, compared to other locations further south on the West Coast, but having lived here for a year, I prefer it to basically anywhere else east of the Rockies.

2. Not quite as bad as San Francisco, but the Puget Sound area has some serious issues dealing the the homeless, drug addicts, etc. that are having a significant impact on the quality of life. My favorite example is the proliferation of locked mailboxes in middle class suburban neighborhoods with single family homes, something that is more or less unheard of in Northern Virginia, where I resided before moving here.

3. High cost of living, particularly housing. In my suburb, the cost of a 4bdm SFH with ~ 2500 square feet is around $1M. Everything that includes a service component seems to cost 10 to 15% more than what I was used to in the DC suburbs. If you rent, not so bad relative to the market value of the house. Someone on the forum told me that an expected monthly rent of at least 1% of the purchase price of the home is a reasonable rule of thumb for whether to consider a rental real estate investment. The going rate in my neighborhood (in Bellevue), is around 0.3% to 0.4%.

A

[Count of Notre Dame]

The top criteria I've seen in retired people are:
1) They already live there and don't want moving stress or leaving familiar community.
2) They move close to where their kids or family live. This is even more important when you get very old and need people to care for you.

I barely know anyone nowdays who moved primarily for tax or financial reasons.

My father in law moved from Southern California to Fairhope, Alabama, but his situation is unique. He is on his second marriage, and does not see his kids more than once per year (and is willing to fly to see them now). He was also tired of California politics as he worked for the city for years and still follows local government.

[HueyLD]

To me, anything over 70 degrees is too hot.

OTOH, anything under 70F is too cold for me. I don’t want to have to wear down jackets all the time.

[stan1]

So much is personal. My Florida in-laws are moving out because they are tired of hurricane evacuations and humidity. They are moving to a mountain state where there are brush fires and cold winters. Will they be happier there? I doubt it because I haven't known them to be happy in the 20 years I've known them. Ooops, did I just write that?

[Blake7]

The best State tax comparison I’ve found (but only considers taxes):

https://taxfoundation.org/publications/ ... d-figures/

[marcopolo]

To me, anything over 70 degrees is too hot.

OTOH, anything under 70F is too cold for me. I don’t want to have to wear down jackets all the time.

+1
Hawaii is the only right answer

[RickBoglehead]

I find that Ohio is very friendly to retirees. When I drive others wave at me and some honk. I feel very welcome. I am glad I chose Ohio where they make you feel your number one

Wrong thing to push, especially this week..

OHOWIHATEOHIOSTATE.

GO BLUE!

[bengal22]

I find that Ohio is very friendly to retirees. When I drive others wave at me and some honk. I feel very welcome. I am glad I chose Ohio where they make you feel your number one

Wrong thing to push, especially this week..

OHOWIHATEOHIOSTATE.

GO BLUE!

That state up north.