If you are like many soon-to-be-retirees in America, you’re looking forward to getting away from your cold, northern, probably-high-tax state and settling down in retirement in a southern locale with low taxes and warm winters. But, how can you know where you’ll like it best in your Golden Years?
I encourage you to do some A/B testing. Live short-term or spend a vacation in some of the places you’d potentially move to during retirement. Without actually staying there for a month or more, it can be hard to judge whether or not you’ll be happy.
There’s another way to get a feel for new territory. Get an RV and travel the country until you find the right place for you. GoRVing.com has some tips about RVing that could help get you started on that adventure. Chief among the decisions you’ll need to make if you plan on traveling the country in an RV is whether you should rent or buy your vehicle. According to GoRVing.com:
- Many RV models allow a family of four to save up to 59% on vacation costs over other forms of travel. That’s a calculation that takes into account RV ownership costs, including payments, insurance, maintenance, tires, tax breaks, registration and depreciation.
- In today’s economy, there are great deals available on new RV models. Consider pre-owned units for more savings.
- Financing is readily available for qualified borrowers.
- You may qualify for a tax deduction because the interest on your RV loan is generally deductible as second-home mortgage interest. Check with your financial advisor to see if you qualify for the deduction.
Read more here.
Where to Live to Make a Living? Try this Southern Gem
If you are looking for a place in the South to live and work, it’s hard to beat Charleston-North Charleston, South Carolina, ranking 4th for mid-sized cities in the report by Joel Kotkin of newgeography.com and Dr. Michael Shires: 2017 Best Cities for Growth.
A huge bonus for South Carolina is that it’s a right to work state. Workers can’t be forced to join a union as a condition of their employment. It’s the reason Charleston-North Charleston has welcomed Boeing’s 787 Dreamliner assembly plant, Mercedes-Benz’s $500 million plant, and Volvo’s first North American manufacturing plant—another $500 million investment which could add 4,000 jobs, notes Kotkin.
The city of Charleston is a gem and has the largest percentage of residents aged 25 to 34 of any midsize city. It would be at the top of any of my lists for places to work.
The South’s Best City: Charleston, S.C. | Southern Living
Maine’s Governor wants to Live in Florida, Here’s Why
Even Maine’s former governor, Paul Le Page is heading south. The low taxes and warm weather of Florida have enticed millions of retirees to the Sunshine State. Maine’s former governor, Paul Le Page has told the Portland Press Herald that he’ll be the next Northeasterner to become a snowbird (heading south in the winter and spending summers in the north). When asked about his plans, Le Page answered in a way that many retirees would understand, according the Press Herald he stated:
“I’ll tell you very, very simply: I have a house in Florida. I will pay no income tax and the house in Florida’s property taxes are $2,000 less than we were paying in Boothbay,” said LePage, 70. “At my age, why wouldn’t you conserve your resources and spend it on your family instead of on taxes?”
The LePages sold their Boothbay home in June for $397,500 just four years after they purchased it during a foreclosure sale for $215,000. The 2019 real estate taxes on that house were just under $3,500, according to town tax records. It was unclear how much the couple pays in taxes on their Florida home. However, during his 2010 run for governor, it was revealed the couple were wrongly – and accidentally, they said – receiving a resident-only property tax exemption in both states.
I’ve written to you regularly about the benefits of moving to a state that respects you and your money the same way you do (see here, here, here, and here for starters). Governor Le Page is expressing that sentiment himself.
You owe it to yourself to investigate your state’s tax policies, and those of other states, and to determine if you might be better off somewhere else. Here’s how to get started on your search.
Best and Worst Tax States in 2019: A Quick List Retirees Need to See
In retirement, there’s nothing that can affect your standard of living more than taxation. Property taxes, taxes on your investment income, and even sales taxes can make all the difference in your ability to pursue the retirement dreams you’ve been working toward for years. Each year Kiplinger releases a ranking of the best and worst states for taxation. Here they are:
The Best States for Taxation in 2019
- South Dakota
- North Dakota
- New Hampshire
The Best State for Taxation in 2019
The best state for taxation was Wyoming. With no individual or corporate income tax rates, low property taxation and a reasonable sales tax rate, Wyoming captured the top spot for tax-friendly states in 2019.
Since 2010, Wyoming has experienced population growth of 2.5%, which isn’t bad for a mountainous, somewhat colder, inland state.
The Worst States for Taxation in 2019
- New York
- New Jersey
The Worst State for Taxation in 2019
Illinois fared worst in the rankings thanks to its high property taxes. Illinois residents have faced property taxes that have grown faster than the national average, and only New Jersey has higher property taxes today.
Illinois also has high income taxes for corporations, high sales taxes, and high estate taxes. In all, families and small business owners face a gauntlet of taxation. That might explain Illinois’ 0.7% loss of population from 2010 to 2018. Only West Virginia, dying from the federal overregulation of its coal mines has experienced worse declines in population.
How Can You Avoid State Taxation in Retirement?
If you want to avoid state taxation in retirement, you need to choose where you live your retirement life. Whether that’s a ski town, college town, sub-tropical island, or the Live Free or Die state, you have to do your research, and make sure you find the best place for you. Taxes are certainly a variable you should scrutinze. After all, it’s your retirement life.
Live like a Billionaire Here
Montana didn’t make the top ten in Kiplinger’s list, but it was in the top twenty. In the Treasure State, you don’t have to be a billionaire to live like one. In Montana, there are billionaires who own ranches that seem like they’re the size of Rhode Island, but they don’t have a monopoly on: camping, hiking, bike riding, kayaking, fishing or skiing. Nature can be enjoyed by one and all.
As an aside, you know what’s interesting about that rural life? It is alive and well. The same is true of the suburbs. Not everyone wants to live or retire to the city life.
The resurgence by Millennials moving to the burbs is proof of that. For young families, there is something to having a backyard and playing outside with your kids.
But, back to Montana and the rural life. In her piece “Outdoor Recreation Driving Population Boom in Rural Areas,” Jen Fifield of The Pew Charitable Trusts writes:
While many rural counties have been shrinking for years, others with strong recreational industries, such as mountainous western towns where people can take a quick hike or southern states with year-round golfing weather, have been growing rapidly. These populations are growing as it becomes easier to work from anywhere, and as more people retire and move away from the city.
The trend is part of what drove the overall slight growth of the rural population in the United States from 2016 to 2017, for the first time since 2010, according to a Statelineanalysis of census data. (Rural counties are those defined by the U.S. Office of Management and Budget as outside cities and their suburbs.) The population in rural counties grew by only about 33,000 during that time, to about 46 million. While counties with large mining and farming industries shrank, counties with large recreation industries grew the most, by about 42,000, to about 6.3 million.
This includes Flathead County, Montana, and other counties with or near mountains, such as Teton County, Idaho, near Grand Teton National Park, which have seen double-digit population growth; and Eagle County, Colorado, home of ski towns Avon and Vail, which has grown 5 percent since 2010. Rural counties on the edges of suburbs, where land is cheaper and recreation is right out the back door, such as Wasatch and Summit counties in Utah, have also seen double-digit growth.
Read more here.
Incredible Aerial Footage of Grand Teton National Park
E.J. Smith - Your Survival Guy
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