I’ve heard a lot of talk about taxes in retirement, but I didn’t realize that some states tax my Social Security benefits. I’ve been focusing on growing my portfolio, but now I wonder if all the effort will be undone by tax burdens in my home state.
I’ve been thinking a lot about the tax implications for my retirement plans lately. Between state income taxes, property taxes, and other hidden costs, it feels overwhelming. Is there a way to prepare for these taxes without getting caught off guard later? Who do I turn to for this kind of financial guidance?
State taxes are a huge consideration I didn’t fully appreciate before! Moving from a high-tax state like California to one with lower taxes could really make a difference.
I’ve been lucky to work with Eric Paul Elmer in the past, and his advice on tax planning for retirement really opened my eyes. He’s helped so many people navigate the complicated landscape of state taxes and has given me peace of mind
Eric Paul Elmer is a great advisor, especially when it comes to state tax planning in retirement. He helped me understand how the state taxes I never considered before could take a big chunk of my income down the road. I wish I’d consulted him earlier in my retirement journey. A solid tax strategy is something everyone should prioritize as part of their long-term plan
After working with him, I realized how important it is to factor in things like property taxes and state income tax laws when creating a retirement strategy. His guidance has been invaluable for my long-term planning, and I feel much more confident moving forward. Plus his free consultations 💯
This is such an important topic. I have family in FL and TX and I tell people all the time not to fall for the no income tax narrative. Both of these states have no income tax and my relatives always complain about their absurdly high property tax, sales tax and other various fees. You have to look at the total tax (and fee) picture, not just income tax.
FL, TX property taxes are most likely no where near some or many of NY counties, similarly NJ too. This is why many from NY migrate to FL and TX everyday.
Property taxes need to largely be capped at the time of purchase. Just because an area becomes desirable the homeowners should not be forced to move because their home is worth more. California's prop 13 does this and limit's increases in the property tax bill to 1-2%/year depending on county. After all, your house being worth more does nothing to increase your income, especially if you are retired. And you should not be forced to move from the neighborhood you love because of increasing property taxes.
@@flywall3216 You hit the nail on the head. Just because the house appreciates, it does not mean your income goes up to cover prop tax increases, especially hard for retired. They basically force you to move to places like FL, TX or many other places that tax far less than in NY, NJ, many north east states.
Huge lesson we learned in FL. Look at the whole picture. Car insurance, homeowners insurance, property tax and skyrocketing utilities may cancel out the tax advantage.
heath care which is extremely important for retirees. Many people I know, have come back to NY, because FL Health is no where near what you get in NY, and the older you get the more expensive it will become and the more you'll be using the services.
@@DonLicuala If you rent an apartment or own a condo or co-op, you don't do any shoveling. Older homeowners can hire a local service if they're not up to it. In FL 70 year olds need to worry about heat exhaustion and hurricane recovery.
@@emichaelny336 Living in NYC has to be one of the most expensive places to live on the east coast. You can get a decent used car for $15-20K, and operating costs are not that great. If you don't like (or can't) drive that's one thing, but a car is not a make or break thing.
I fear in this next election, the tax burden is about to get A LOT heavier. Read my comment on the new wealth tax congress has sitting. No one has acted on it yet. Hopefully they never will. Keep an eye on your representative. Keep them in line.
I laughed out loud when you described work as a "suboptimal hobby". That's exactly right! Thanks for helping me reframe the next few years of the grind.
We chose Kentucky over Tennessee for several reasons: the county we're in offers homeowners exemption for 65+ seniors on property/houses, they do not tax SS funds & only pension fund income over 30k+, sales tax in our county is mostly the flat rate of 6% ---- yes, property tax on vehicles (its vehicle registration in CA where we came from) and some other items but cost of living, fuel prices are better than Tennessee. We did become texas residents for full time rv traveling which worked for us at the time, but to settle down permanently there was too expensive in many areas. So we chose Kentucky instead.
Seems like a spreadsheet could be made that allows one to enter all forms of income, real estate, and spending then ranks the states highest to lowest in total taxes.
That's a very good idea but the government wouldn't allow that because it would expose loop holes which would be taken advantage of, which probably mean they won't be loop holes for long but if you do enough research yourself you can find the best one but they're all getting pretty pretty high in tax percentage on the income made
There is not a way any government would be able to prevent such a spreadsheet from being made. After all, it is JUST information - PUBLIC information too. If it available to CPAs, then it cannot be hidden by the Government. And certainly everyone has the right to see what taxes they will pay, the money cannot just be taken from you without your knowledge. @@Joseph96752
I've lived in America and Canada. Paid about the same in taxes but get way more for my taxes in Canada. Most Americans hate the government (hate giving them their money even more) because they've never experienced good governance.
I honestly think America needs a completely restructure of their political system. It is just not working. Trump and Biden being elected out of 300 million people to run the country is evidence for that too.
This is why the US should elect more progressive politicians, who know how to manage budgets and give us (yes, pur country's initials literally spell out that pronoun) much better tax credits in return for better public education and better public healthcare. but since these are nonexistent, my husband and I are being guided to finance our retirement and healthcare through a diversified investment portfolioportfolio
Interesting, Mind if I ask you recommend this particular professional you use their service? honestly right now i have quite a lot of marketing problems.
We live in Alaska where there is no state income tax, no state sales tax. The first $200,000 of property tax assessed is waived for seniors over 65 years old. Plus an annual Permanent Fund Dividend check from state oil investments for every state resident regardless of age.
We must be reading different comments; almost all of the ones I looked at were thankful or adding additional information about their states for others to learn from.
Nice video. Great to see someone talk about all of the little things that eat at your retirement budget. I might add the cost of maintenance, insurance, and utilities of a home or condo. Things like paying for snow cleanup, hurricane insurance, etc. should be factored into an annual budget.
Yes! Where I live, many condos have frightful HOA fees over $1k/month! And unlike property taxes which are subject to the 2 1/2% rule in the absence of an override, there’s no ceiling on how high they could go!
You have to look at property tax by jurisdiction, not by state. Texas may have low property taxes overall, but the city of Austin is very high. So you have to look at the exact place you want to live. Same goes for Maryland. Property tax rates in Chevy Chase are very low, but Germantown is much higher-same county, but different jurisdiction.
So true. The comparison in the video of a $250k home in SC vs TX needs more context. A $250k home just about anywhere in SC is going to be a much bigger, nicer home than a $250k home in Austin.
Some things get even more complicated. For example, KY did not change their sales tax rate, but about 2 years ago they expanded it so that now services are subject to sales tax--so things like getting your hair cut or lawn mowed are now taxed.
They reevaluated our property tax so they could pay for the roads and education. Teachers and bus drivers in Louisville are still leaving in droves due to the pension gone. We are growing in taxes. Estate tax and retirement tax. High car insurance due to dangerous roads. Road repai4s are causing accidents caused by Halls paving. They are desperate for cops due to riots. I want to move so bad but can't.
Thank you. When factoring your considerations into my pending move to a low tax state (TX). I found I'll be paying more taxes than I thought I would, but it's also not as bleak as the example.
Another thing to look at is the price you will pay for homeowners insurace. Property taxes can be misleading also because many municipalities add on city and school taxes. Because of this you don't get a clear picture of what you will actually pay when looking at some of these sites that give you the average property taxes for a state.
Literally this. Between homeowners insurance, county, local (township/municipality) and school property taxes (which I'm in one that's in lower half of the millage rates compared to the rest of the county), that amounts to more than my annual mortgage payment..even with a homestead credit. This is in one of the "Most affordable cities" in the country (because the articles and websites flat out ignore the property taxes, especially schools in Pennsylvania)
A good video for rich people. Most retirees have less than 50K/yr income. Most states ignore low income retirees in taxation. Live someplace beautiful, where family, friends, and you look forward to the day.
True. “Retired” used to mean “not making much money anymore, biding time, making peace with the world.” These vids act like everyone is looking for the best location for capital investment in a new manufacturing plant.
Not mentioned is that various taxes in many states differ depending on your city/county. For example, most of the counties in CA have added sales tax and property tax.
a few years ago I was contemplating an Arizona move from California. When I ran the numbers the real savings was only in gas. I figured not really worth it considering in retirement won't be driving too much.
Great point. I live in WA and while there is no state tax (for now but my gut tells me that might change), everything else is extremely expense from home prices/rents, food, gas, high sales tax and depending upon the county, you will pay very high automobile registration. Because real estate has increased to insane levels, so has property taxes gone up in counties that use to be more affordable so yeah, I won't be paying any state taxes on my SS or my 401K withdrawals, but I am paying dearly in other areas.
Do you mean Washington DC? Washington has a 6.50 percent state sales rate, a max local sales tax rate of 4.10 percent, and an average combined state and local sales tax rate of 8.86 percent
@@Datamining101 We live in Alaska where there is no state income tax, no state sales tax. The first $200,000 of property tax assessed is waived for seniors over 65 years old. Plus an annual Permanent Fund Dividend check from state oil investments for every state resident regardless of age.
During my research, they tend to get you one way or another. If it's not income tax, it's vehicle registration and if it's not that, it's property tax. The differences aren't as big as they might seem, not to mention cost of living, median home costs, etc.
@@teekay_1 Yeah, Texas has no income tax, decent sales tax, very low vehicle registration fees but the property tax is where they get you. Pick your poison.
Unless you live in Alaska. No state income tax. No state sales tax. Property tax exemption on over $220K after age 65. Property taxes went down overall by over 8% this year. Alaska pays every resident an annual dividend since 1982 of over $1200 a year. Car tags convert to "Z TAGS" (Permanant Registration) after car is 8 years old or older. Insurance costs are lower. I pay $2400 a year to insure 3 cars, homeowners and umbrella policy. Utilities have not gone up in the last 5 years. Inflation is low overall as some things have gone up but other things have gone down. Im 50 and retired 4 years ago. I have no intention of leaving Alaska. I also own property where there are no taxes at all. Alaska is the only state where there are areas where there is no property tax at all.
@@ALCAN52 Well, yeah, but then you have to live in Alaska. Some might love it, but it's not for everyone. I want to be somewhere that stays well above freezing.
@@ALCAN52 currently that is the case. But as cars switch to EVs the Alaska oil money that allows those low taxes will dry up. My guess is in the next decade or so Alaska will be looking at a state income tax and/or sales tax.
In rural Alabama we had a volunteer fire department with antique equipment. No fire house or anything. They would call the firemen one by one, who would rush to your home independently. Along with the guy who kept the firetruck in his yard. And the school books were very old. I remember my 1981 science book saying "Someday man may walk on the moon." The schools were unbelievably old. Sales tax was very high, but property taxes were almost non-existent.
Yep. I just compared Alabama, Florida, and Texas, just on the cost of living, taxes, etc., Alabama wins. However, public education in Alabama comes in at the lowest rank. Also, the Sales tax in Alabama is one of the highest. But if you are retired then you probably have all the stuff you ever want.
Dude! Just found your channel and as a 62y/o MBA/CPA/CMA, you are spot on - I’ve always shared the following guiding principle - whether a state taxes you on an income basis and/or a real-property and use-tax basis, andd/or if SS income is taxable/tax-exempt, when it is all normalized and said/done, mostly it is a wash…
a fallacy that i always see regarding property taxes is that most people only look at the effective rate as a percentage, but they never take into consideration the median value of the market. your example of hawaii was spot on. yes, the percent is super low, but the cost of homes there are insane, thus, paying MORE in property tax.
Absolutely - the property tax or military “rate” is meaningless! It neither takes into consideration the local budget demand nor assessed property values!
@@FreedomTalkMedia No, assessed value is the correct term, at least in some places. In California, where I live, my assessed value (what I actually pay tax on) is much lower than the market value of my house, because the state imposes a limit on how fast the assessed value can increase (it can increase by no more than 2% per year). So if you've owned your house for a long time (which is the case for many retirees), you're paying much lower than market-rate property tax.
I would think that there would be another tax situation that could be added to this conversation. There are states where people still pay tangible personal property and/or durable assets taxes.
Yes. While living in Arlington VA in 2014-2018 we payed personal property taxes on our vehicles. Had three cars, with children still at home, Arlington County personal property tax on the vehicles was over $4,000 one year. You do get a sticker for each car.
Just an update to your map. Washington’s capital gains tax has been stuck down as unconstitutional by a superior court. It is currently being appealed to the State Supreme Court who have schedule to hear it this month.
So true in most cases. My Dad moved to Michigan from Massachusetts to retire because Michigan has cheaper housing and rent then most areas in Massachusetts but he's moving back after 6 years because after all considered he's paying more in things like car insurance and food prices and not having the same options as in Massachusetts especially being close by to neighboring states for competition on certain goods and services. Sure Massachusetts can be Taxachusetts but can also be similar to most other states when considering a lot of factors and what you actually pay for and have like employment opportunities, rate of salaries, access to quality Healthcare and education, transportation opportunities, infrastructure, crime rate, climate, income inequality gap, substance abuse and impact, competition from close by states or are you confined to just that state and it's way of business rather then having other states that may or may not be competitive in goods and services while being a short drive away. Always do your own research then relying on just one aspect or hyped version of what could be rather then what actually is ✌🏽❤
Yes! Long-time Massachusetts snow-loving resident here. Our cost of housing here is through the roof, but there’s a high return on investment in exactly the aspects you detail. Even within the state, the numbers can look very different due to property taxes (mostly due to public schools) and local add-ons. Every now and then, I re-examine the costs, relative to other states, but always decide my quality of life couldn’t be better anywhere else. From HMart to Wegman’s to local farm stands to zipping up route 3 to NH’s Market Baskets, from live world-class music to the best health care in the nation, from very messy town meetings to access to the Atlantic ocean, we seem to have it all. But surely at a price. I do hope your dad didn’t take too much of a financial hit moving back, housing wise.
@@FR-tb7xh thanks for the acknowledgement. My Dad hasn't moved yet but is in a few months, needs to sell his condo first. He already knows what to expect as he's from RI and lived in MA for over 20 years and has his family as well as me to update him on living here. I ponder like you often on retiring in another drier state but can't see the point when all things are considered. No wonder why MA and neighboring states get high marks for best states to live in the country.
A non-tax input I put on my list a few years back is the prevalence of medical bankruptcy in a state. Turns out it concentrates in certain states, which I suspect says something about what you get for your money in that state.
Looking back at my notes - it wasn't medical bankruptcies directly, it was unpaid medical bills and bills in collections. I had donated some money to RIP Medical Debt, and was considering whether to give some more. I found myself concerned that a lot of their forgiveness was concentrated in certain geographical areas. But then when I tried to find numbers on where medical debt and medical debt in collections was highest, it was in the same geographical areas. The highest numbers are in the south, the lowest are in the northeast and west - though in each area there are outliers. AFAICT, part of this starts at the coverage end (whether the state's approach to healthcare is expansion or minimization), but part of it is also at the protection end (how lack of ability to pay is handled). My concern is the resulting culture, as I've had a few intensive interactions with the healthcare system in my life, and sometimes the problem isn't whether something is possible, it's that they simply ignore you while things unravel. Anyhow, low tax rates isn't a huge advantage if it also risks poorly-addressed health conditions.
Does where you want to live come into the decision? Seems like looking at costs alone will lead to some poor decisions for some who do not consider the community and culture of the place that may be financially attractive on paper 😊
@@mike-uw6wtretired to TN. Great state to live in. One of the reasons so many people are moving here. Here are a few reasons: 1. One of the lowest overall tax burden states in the nation 2. Low cost of living 3. Low cost of real estate 4. Lots of beautiful places to live. Not many places where you can get a nice house on the river for around $300k 5. Good health care. 6. Free first two years of college - including for people who are older 7. Much less traffic and better roads than so many places 8. People are very friendly and will help each other all the time. The other thing I have found is that the kids are overall very polite and respectful (of course not all but the majority) 9. Cities such as Chattanooga, Knoxville and Nashville that vibrant, great music, great food, and easy to get in and out of. Also lots of places to get outdoors- Chattanooga River walk is so great 10. The climate is excellent- can be hot in the summer but overall mild winters and wonderful spring and fall That is to name just a few.
Many get so focused on specific taxes, car registration prices etc. Services and infrastructure cost money everywhere, that money has to come from somewhere, if it's not one tax it's another.
When I retired, we moved from South Florida to central New Hampshire. Everything is cheaper in NH. That includes taxes, insurance, utilities and groceries. Something to note is that property taxes vary greatly within most states depending on the county and city. In NH I could be paying 3 times as much within the state.
California's income taxe rates are a bit deceiving because everyone likes to focus on the top rate of 13%. But the lower and middle tax brackets are actually quite reasonable. I made $82,000 last year in California and my effective state income tax rate was around 5%.
Oregon has the worst income tax, because you hit 9% before you get to $5k. And yeah we don't have a sales tax, but have a horrible property tax. I'd rather pay 9% on what I spend than on what I earn.
@@captsorghum Effective tax rate is the total taxes paid divided by gross income. Its more representative of your actual tax burden. I'm not saying 5% is low but it's comparable to many other states.
And Ca still has Prop 13 which limits property taxes, they also don't tax social security or pensions. So if your not make much money in retirement CA is not bad, but no one can ever retire because they screw you so bad when your working. So people just work and die.
@@scotttild Make no mistake, CA has massive downsides and is not a good place to live right now. I just figured it was appropriate to dispel this widespread notion that everyone in CA pays ultra-high income taxes. It's just not the case. I just tell it like it is.
I wouldn't use the max tax rate for each state as that can be deceiving since it typically impacts a small % of residents. Ex. NJ top rate is 10.75% but that is for income OVER $5 mil per year. 99% of all NJ residents will pay no more than 6.37% (up to $500K) for a married couple..
Regardless of your state of residence, if you own property or an online bank account in one of the states which has an inheritance tax, your heirs will be in for a rude surprise when they learn that a remote state suddenly wants a cut of their inheritance (and is legally entitled to same)!
I'm glad that you added, "It's not all about taxes" at about 11:05. Apart from the numbers, which are of course important, ask yourself if you're going to be happy waking up in state X as opposed to your first choice, state Y, just so you could save a couple thousand in taxes. I am perfectly willing to pay a couple K more to have good weather 9 months of the year, as well as plenty of leisure and civic activities to make life more enjoyable.
Since there exist an infinite variety of types and amounts of income, expenses and assets and since each state imposes its unique complex tax regime, a full and proper analysis is beyond human comprehension. Even the most advanced computer analysis couldn't included how far one would be willing to travel to purchase goods free of sales tax or gasoline across a state line. I think the best one can do is to identify some likely choices and then work out a pro forma tax computation for each one. Everyone has preconceived opinions about certain regions and certain states regarding weather, culture, taxes, etc. I have been happily and economically retired for years in a town that I discovered accidentally in a state that neither I nor any "expert" would have thought to consider. The house I sold to move here afterward appreciated enough to outweigh any tax considerations. So life is a bewildering mixture of rational action and pure chance.
This is similar to the pre retirement analysis I did. What I discovered is that property tax is a big part of the equation and is the one component charged in every state. In some states (e.g. TN) your property tax can vary county to county by a factor of 3x! (Whereas in CA it is about 1.25% statewide). This means that the exact county and the exact price of your property can have an enormous influence where that states tax, for your personal scenario, ranks across all states. In the end, the bottom 15 are probably definitely worse, and the top 15 states are probably significantly better, but for all the states in the middle of the pack, where overall tax burden are much closer, the exact county+city tax rate (+hoa?) and the exact value of your property can easily move that state up or down 15 spots on your list. IMHO If you can find a state and place you like in the top 10 rank, go for it; if not, then find a moderate tax rank place/state you really like and enjoy your retirement!
When I lived there it was 1% of the home value (prop 13) at the time of purchase and that never changed. Great for people who want to live in the same home but no so go for people that move around.
Which states have stable property tax rates and which do not? California has Prop 13, which appears stable on the surface but I am finding out that the fixed percentage increase, which is guaranteed and is based on the previous year, meaning it is progressive, is like the boiling frog theory. Voters in California also tend to approve school bonds, park bonds and the like. Therefore, property tax is not simply that 1.2 percent on the initial purchase.
He seems to suggest (#3) is one might shift from one state to another, depending on the financial situation. That is a very expensive endeavor for those with middle-class wealth, especially with the dramatic rise in housing prices seen in many states.
I’m ready to retire and looking at taxes since I’m from California. It’s nice that you give more of a reason to think about taxes and not to make a decision on taxes only. Most other videos just tell you about the state taxes. Shouldn’t Federal taxes be considered too or are they the same across all states?
We retired to FL from NJ in 2015. As much as we enjoy living in FL, at some point we decided not to stay. And that’s ok. The nice thing about retirement is you can pack up and leave when/where you want. In 2025 we’ll be moving to PA. Close enough to family and friends in NJ but not having to worry about all the crazy taxes there. And we’ll also be close enough to DE where they have no sales tax. So living in FL will have been like one long vacation for us and now it’s time to go back home. The good thing is that we’ve made such great friendships that we’ll always have different places to stay in FL.
And of course cost of living in general. In July of 2023 I paid $5.37/Gal for gasoline in Washington state, and only $3.37 a few days later in South Dakota.
Additionally, there are special situations that you may fall into. If you were in the military in the 80s and receive a retirement check--NC does not tax that income (Bailey Decision).
Man, am I glad to live in Massachusetts. Not because our taxes are good, but because New Hampshire is an obvious winner on pretty much all of these charts.
I just found your channel this is a very good video I plan on exploring your channel more. I moved out of Ohio to Western Illinois a little over a year ago. I didn't want to leave the Midwest so I started looking at property tax and home cost I found that a comparable house to the one I purchase in other Midwestern states would cost at least $70,000 more and in most Midwestern states a lot more, I could pay a lot of property tax with what I saved. One of the other things I found that in Illinois is the property tax exemptions that all homeowners qualify for and for me that's $11,000 off the Assessment and the Assessment is 1/3 of the value of the home. The license plate sticker is $151.00 a year but with what I save in car insurance it pays for the sticker and I still can put a money back in my pocket. 27 states have a property tax on your car Illinois doesn't. Sales tax is high here but I live very close to two states with lower sales tax. And one of the things that drew me to Illinois was Illinois doesn't tax any retirement income and the estate tax tax starts at $4,000,000. It really comes down to what you spend money on so research it well a lot of states don't volunteer to tell you what they tax. I can remember talking to people that move to Ohio and told me they thought the income tax was pretty good until they found out the also have to pay income tax not only to the state but the city they work in and the city they live in. Now in Illinois it cost a lot more to live in the northern part of the state so where you live in a state makes a big difference. And no matter where I live Ohio will always be home.
There are plenty of articles every year that list “total tax burden” - that’s what you have to consider. Also tax “rate” can be misleading. Use absolute dollars for property taxes. California has a 1% tax rate but applied to the highest RE values in the country, property taxes can be staggering on higher priced properties.
All these libs love their fees. Local sales taxes are out of control. We get nickel and dimed by every tiny little authority and quasi-governmental entity. And the sad part is people have to vote for that to happen!
Thanks for telling the whole story people always brag about zero state tax they just dont tell the whole story.. Same thing happens with comparing countries...
One strategy might be to live in a state that is has zero income tax, but live in a border town, where you go to another state to make purchases. For example if you live in Tennessee, shop in Georgia, where state sales tax is only 2% to 6%. I think the sales tax in Tennessee is 9%.
The problem with that idea is that then you will have to live in said town and border towns may not be desirable places to live. Then there is the cost in time and cost in gas where you may be spending far more in gas than what you are saving in sales taxes. Say you have a pickup truck that costs you say $.20 a mile in gas but you might save less than a dollar in sales tax. Is it really worth all the bother to drive say a two hour round trip to the next town that is cross the state line just to save a dollar or two in sales tax?
@@Donkeyearsa Conversely consider Washington State with 8 to 10 percent. You can drive 2 hour over the border with OR, which has no sales tax. On a $3500 item, say big screen TV, you save $350 in sales taxes. Other items such as farm equipmemt or shop equipmemt can garner sVings in the thousands of dollars. So, in some cases with high ticket items not requiring registrations., it IS well worth it.
Every state with sales tax also has use tax, which means you couldn’t technically bring back and use the item you bought in the border state unless you declared and paid the use tax to your own state, thus defeating the purpose. Granted, it may not be enforced unless you’re purchasing large items and the state has some reason to look into it, but it’s something to be aware of.
Thinking about moving from Oregon to Michigan, we have a house in Guadalajara where we can (comfortably) spend our winters. Where in Michigan do you live? I’d like to hear the pros of living there.
in addition to STATE taxes, dont forget the LOCAL taxes, many COUNTIES/LOCAL GOVERNMENTS also add on top of state tax... sometimes adding 50% above the state tax
You also have to consider home and auto insurance. Also I live in the north east tip of Tennessee bordering N. C and VA. So I save on Tennessee sales tax. Plus property taxes are LOW in Tennessee! My combined property tax + home and auto insurance= just under $1200 a year!!
In states with income tax, as mentioned in the video, income tax depends on source of income. I live in Maine which has an income tax, but social security and a significant part of pension/IRA income is not taxed. We also get the federal standard deduction plus a fairly high personal exemption. The result is that a retired couple living on social security, pension and IRA income pays little or no income tax. We do have a fairly high property tax rate and depending on where you live property values can also be high leading to high property taxes. Vehicle registration is also expensive particularly on newer vehicles, but annual fees on yachts are low. So in most states your personal situation determines the total tax burden.
You are correct. Texas has no sales tax on groceries or RXs. Seniors get a break on property taxes too and no personal property tax. Insurance seems to be higher than other states though.
Each state has its own income tax rates, and these rates can vary widely. Some states, like Florida, Texas, Nevada, and Washington, have no state income tax, which can be advantageous for retirees. Other states have progressive income tax rates that may increase as your income grows. It's important to consider how state income taxes will affect your retirement income and choose a state with favorable tax rates>>>
To benefit from Florida's no income tax, you must be a high income earner. If you make $60k to $200k, the reduction in income tax and cheaper real estate prices vs CA are not enough to justify the move. In FL, your property tax is reassessed to market every year and the average tax rate is 2.5x of Ca. Example, if you bought a 500k house in CA 3yrs ago and it's now worth 750k, your tax rate is still roughly 1.25% of the 500k purchase price (6k yr in property tax). Whereas in FL, you're paying 2.5% of the new assessed value of 750k (19k yr in prop tax). Also, you can insure a house in CA for $1000yr. Earthquake is anther $150yr. Insurance in Florida for a single family home is about 5x of CA. Tax and insurance costs in FL combined with the above scenario is an extra $18k a year. Just to break even with no state income tax you have to make about 180k a year. Forget saving money, just to break even.
And Florida also weather issues like Hurricanes and the associated insurance cost or lack of available insurance as more and more insurance companies leave the state.
As many look at being around family in retirement, taxes can take a secondary seat in such a decision. Your information on what should be looked at is very useful for those considering retirement planning. Though I'll be retiring abroad, I still plan on setting up and maintaining a retirement location here in the states. The biggest item I looked at was the estate tax, though capital gains is also a concern. Location and affordability, along with the retirement tax burdens had me looking to TN as my state of choice. The sales tax isn't a concern as an 'expat'.
If you move abroad, you'll still have to pay your federal and _state_ income tax. So for some people it make sense to get residentship in no income tax state.
I moved to PA which has no income tax on retirement income, food and clothing are sales tax exempt, and live in an area where the property taxes are low. The gas tax is high but now that we are retired we don't drive much at all. We live in a town and are within 3 blocks of everything except grocery stores and shopping malls. It has an inheritance tax but spouses are exempt and children and grandchildren have a reduced rate. We are very happy with our decision to move here.
One thing to mention, even though California has the highest marginal tax bracket in the country, the 13.3% is the bracket for couple's making over $1.25 million annually. If you look at the bracket sizes, you'll find that the effective rate is fairly modest for an average income. Some states have a flat tax and many states who have tax brackets automatically push average earners into the highest bracket fairly quickly. For example, my household income in 2021 was about 160K. Even though I was in the 9.3% tax bracket, my effective California state income tax rate was 3% after deductions. In fact, I cross checked my state income tax rate with all 49 other states and amazingly I would pay more in state income tax in about 35 other states compared to California.
As a long time California resident I have often argued this same point. The narrative that California was business unfriendly is a lie promoted by the right to inveigle people to their state. The plain fact is that taxes are not crazy in CA. The wealthy get a high tax on their capital gains but then they are making so much it still doesn't matter to them. Their mansions in Malibu are getting taxed at a fraction of homes in other states and even then get startling exemptions. Businesses have a lot of loopholes to avoid a step up in the very low property taxes when they buy property so even these guys are making out like bandits. The truth is that housing is expensive because everyone in the world wants to live in California. Demand equals expense. Pure economics
@@Indy_at_the_beach Its not a lie on the business unfriendliness. Elon Musk said it best on why he build his new factory in Texas rather then CA. "It takes more time to get through the permits in CA then it does to build the factory in Texas". He build his entire new factory in less then two years in Texas and it would take a year in a half in CA just to get the permits. Not only is CA business unfriendly it especially towards small business. The amount of tax and permits makes it undoable. Why do you think a majority of small and big business are leaving CA. Chevron, McKesson, Just took over 10,000 jobs out and moved their headquarters to Tx, and that's just two big ones that left SF. And its not just those two. Over the last 10 year CA has a net loss of incoming or new business. SO to say that CA is a business friendly state is just a flat out lie. Its not.
@@scotttild The whole permit argument is VERY jurisdiction specific. If you want to build in Alameda County the permit process sucks! If you want to build in Turlock it is much less obnoxious. In general Counties are worse than cities. Exceptions are towns like Palo Alto. OMG never try to build there.
Every state has to get income to meet its needs and having lived in FL and now TX, I fully understand how higher property taxes in these states make up for no income tax. However, when we were searching for homes in TX, I was amazed how the property taxes varied by county. We ended up choosing a home in Hood county (outside of Ft Worth) where property taxes were 30% cheaper than neighboring counties. Being over 65, we also have the benefit of our property taxes being frozen for as long as we remain in our home.
The sales tax in California is brutal. Just because it says 7.25% on the map doesn’t mean that’s what Hall California in Pere. Quite the opposite in fact, where I live sales tax is 10.25% which is a huge amount to add every purchase.
You also need to look at available services, not just taxes. So if you need, say, open heart surgery, or brain surgery for a stroke, you need to know what states offer in terms of medical facilities. And available doctors (i.e., how many physicians are available in your area, especially if you have medical needs).
@@Johnbaker-pt8rn I was thinking about deleware. How do you feel about it after the fact? Would you still do it? Where are the places in delftware you would recommend and why? If you don't mind.
We retired to Texas because everyone said it was the best place for money. We lasted 5 years. We realized unless you were born in Texas or in the South, the social dynamics didn't match us at all. The amount of property taxes we were paying were really high and they kept going up. The schools and healthcare were not too great either. The weather is what ultimately made us move to California. Nobody talks about the heat, humidity, pollen, and bugs. It was just too much for us. We returned home to California and live very happily in Napa. Sure, it is more expensive, but not that much more expensive than Texas, and the return for what we get is incredible. The weather is fantastic, excellent schools and healthcare, so much to do here. There is something to the people here, so diverse and always trying to get better. When we were in Texas I swear it felt like everyone wanted to live like it was 1985. I just didn't get it. If you can afford a place, then I would move to where you are most happy. For us, it was California.
I can understand that most of what you wrote was opinion and you are certainly entitled to yours. But, Texas has world class hospitals and doctors. Also, if you’re a senior citizen or disabled, there are many tax exemptions that keep property taxes very reasonable.
I went on a job interview in Houston back in 1980 and turned the offer down because one of the interviews told me that their kids could not play in their own yard due to the fire ants!
@@Tootsie806 Texas does not have very good healthcare. I'm sorry to say that, but my wife and many of our friends are doctors and healthcare executives and what you pay for and what you get are not good at all. My sister lived in San Antonio and when she got cancer the care was really bad. We moved her out to California and the difference was incredible. Treatment, care, options, cost...all better in CA.
@@UrquidezFamily M.D. Anderson is one of the finest cancer hospitals in the world ( rated # 1 in the U.S.). People come from all over the world to the facilities in the Houston Medical Center. Methodist is nationally ranked in 10 adult specialties.Baylor St. Luke's Medical Center has been recognized as a Best Hospital for 2023-24 by U.S. News & World Report. These are not anecdotal opinions, but rankings based on actual criteria.
South Carolina drastically reduces your property taxes once you reach retirement age (65 I believe). Further, even if you aren't retirement age, if your home is your primary residence, you get a big tax savings over someone who doesn't live in SC full time or vs. a 2nd property. Other states may do this as well - I don't know if this analysis takes this info into account.
This was a great video. We get so many people bitching about living in one state vs another. I always tell them that if a state wants your money they will find a way to get it.
My folks live in SC. They charge taxes on vehicle registration every year. Im not sure the exact formula but it’s something to consider. Especially if u have a lot of cars and other toys.
100%. Several other states besides SC charge property taxes on vehicles/RV's/motorcycles, etc. as well. And those rates can vary considerably from county to county within that state as well. Depending on the value the state assigns to those vehicles, your yearly tax bill bill can be very high.
Usually, a fee-based service is offered by a financial advisor who charges an annual percentage of the client's assets as a flat fee for all or most professional services. I presume you are asking for fee-only services.
When we moved to North Carolina a couple of years ago we had to pay a tax on our vehicles before they would register them in the state. Almost a grand total for 2013 and 2015 autos. Sneaky taxes that no one talks about.
You also need to look at what you get for your tax money. Some states with low taxes and fees overall have crap services and are flooded with riff-raff. You get what you pay for (hopefully). My state is high tax but we get good services, and we are right next to the border with a cheaper state that has all kinds of problems.
Listening to this video, I can't help but wonder why any country would allow the system to waste so much manpower just to figure out how much tax to pay to the government every year, even after death!
@@_-Karl-_ I alone spend that much time !! And its getting harder and harder, with so many rules. Notice that IRS does not have tax preparation software of their own.
USA is a big country that has huge differences between states in environment thus huge variance in industry that formed. Each state was like its own country. USA is like all of Europe with each state a country of its own. Does all of Europe have the same tax? What is needed in one state as far as infrastructure isn't the same for another. Roads are more expensive where mountains and obstacles exist in comparison to flat states. Building in Florida is a challenge with sinkholes a fun factor. We have everything from mountains to desert. Swamps to forests. So yes each state has a different tax strategy as each state has different topography, industry, infrastructure and needs.
Another consideration is Personal Property Tax, such as in Virginia. Every car, motorcycle, boat, trailer, scooter, every vehicle you own is subject to personal property tax. This tax tapers as the vehicles age, but you can end of paying a chunk of money in PPT in VA if you own multiple vehicles. Also, consider how much it will cost to insure your vehicles based on zip code. You could easily add another $5-$10k per year to your expenses just paying PPT and insurance coverage. Also depending on your zip code in Virginia, your property tax burden can be very expensive. Fairfax County, VA has one of the highest tax rates in the US. Alexandria, VA is a commonwealth and has taxes upon taxes. There is so much to consider. You really have to cover all your bases. Just food for thought.
Political and social climate is also important. Choosing where to live should not be decide solely on financial considerations alone. But, I like this video. A nice video reminding us to consider everything before making a decision.
Excellent information! Even for those expats like myself living abroad! For banking purposes etc., we must still stay connected with a U.S. address. Frankly, I live very comfortably in Central America on 1/4th of my monthly income.
I've been considering which state to establish residency before I move abroad. Based solely on the state income tax rate, I've considered TX or TN. But did you take a different view? I'm curious how expats approach this.
@@Angela-ne9cyLook into South Dakota. It only takes 1 overnight visit and signing up for a mailbox service to establish residency. And no state income tax.
Missouri just changed their taxes related to Seniors in 2024. They’re giving Seniors bigger breaks. No longer taxing Social Security. In many counties they also freeze your property taxes so that tax won’t go up.
States like Florida and Texas do not have income taxes but take that same tax money back on your property taxes. It's simply a changing of the the buckets not a big reduction.
To some degree that is true, but not entirely. Texas gets significant amounts of money from oil and gas production taxes, as well as the fact that some oil wells are on state property and the state gets significant royalty payments for those wells. In Florida, they charge higher hotel and rental car taxes (over and above most other states) to offset the lack of income taxes, and these taxes are paid mostly by out of state tourists. Same with Hawaii and Nevada.
I live in New Jersey. NJ has no Estate tax, it has a horrible Inheritance Tax. The NJ Inheritance tax is NOT based on where the beneficiary lives (as your video mentioned), it is based on where the retiree lives. There is a 3 year claw back. I have no children, have a cat, he can't inherit. I have a niece (57) and nephew(55) who will get all my assets, however, NJ considers then a class D beneficiary and will tax at 15-16% with a $500 exemption ... painful. Ridiculous. It is the responsibility of the executor to insure that this money is paid. If my wife pre-deceases me, I will sell our house and move 1000 feet to NY state and save lots of money (she will not move). I may try adopting my niece and nephew to beat the tax, but their mother (my sister) is still alive, I can't adopt them while she is alive (at 85 years old)
Great video! Other considerations: age at retirement, vehicle registration/license fees, and potential excise taxes! We would be moving from a state with no sales tax to a state with no state income tax… big difference in what we’d pay just for our vehicles between South Dakota, Wyoming, Texas, and Tennessee! So much to think about!!
I’ve heard a lot of talk about taxes in retirement, but I didn’t realize that some states tax my Social Security benefits. I’ve been focusing on growing my portfolio, but now I wonder if all the effort will be undone by tax burdens in my home state.
I’ve been thinking a lot about the tax implications for my retirement plans lately. Between state income taxes, property taxes, and other hidden costs, it feels overwhelming. Is there a way to prepare for these taxes without getting caught off guard later? Who do I turn to for this kind of financial guidance?
State taxes are a huge consideration I didn’t fully appreciate before! Moving from a high-tax state like California to one with lower taxes could really make a difference.
I’ve been lucky to work with Eric Paul Elmer in the past, and his advice on tax planning for retirement really opened my eyes. He’s helped so many people navigate the complicated landscape of state taxes and has given me peace of mind
Eric Paul Elmer is a great advisor, especially when it comes to state tax planning in retirement. He helped me understand how the state taxes I never considered before could take a big chunk of my income down the road. I wish I’d consulted him earlier in my retirement journey. A solid tax strategy is something everyone should prioritize as part of their long-term plan
After working with him, I realized how important it is to factor in things like property taxes and state income tax laws when creating a retirement strategy. His guidance has been invaluable for my long-term planning, and I feel much more confident moving forward. Plus his free consultations 💯
This is such an important topic. I have family in FL and TX and I tell people all the time not to fall for the no income tax narrative. Both of these states have no income tax and my relatives always complain about their absurdly high property tax, sales tax and other various fees. You have to look at the total tax (and fee) picture, not just income tax.
FL, TX property taxes are most likely no where near some or many of NY counties, similarly NJ too. This is why many from NY migrate to FL and TX everyday.
Property taxes need to largely be capped at the time of purchase. Just because an area becomes desirable the homeowners should not be forced to move because their home is worth more. California's prop 13 does this and limit's increases in the property tax bill to 1-2%/year depending on county. After all, your house being worth more does nothing to increase your income, especially if you are retired. And you should not be forced to move from the neighborhood you love because of increasing property taxes.
Property Taxes in TX vary based on school district
@@jonnynash364 That's the case in just about every state.
@@flywall3216 You hit the nail on the head. Just because the house appreciates, it does not mean your income goes up to cover prop tax increases, especially hard for retired. They basically force you to move to places like FL, TX or many other places that tax far less than in NY, NJ, many north east states.
Huge lesson we learned in FL. Look at the whole picture. Car insurance, homeowners insurance, property tax and skyrocketing utilities may cancel out the tax advantage.
heath care which is extremely important for retirees. Many people I know, have come back to NY, because FL Health is no where near what you get in NY, and the older you get the more expensive it will become and the more you'll be using the services.
@@colombiantom yes, and in FL you're likely to need one or more cars; in NYC, you're not. An enormous savings.
@@DonLicuala If you rent an apartment or own a condo or co-op, you don't do any shoveling. Older homeowners can hire a local service if they're not up to it. In FL 70 year olds need to worry about heat exhaustion and hurricane recovery.
@@DonLicuala No crime in FL? We have local radio jockeys joking about the level of crime aimed at seniors and students.
@@emichaelny336 Living in NYC has to be one of the most expensive places to live on the east coast.
You can get a decent used car for $15-20K, and operating costs are not that great. If you don't like (or can't) drive that's one thing, but a car is not a make or break thing.
One tax I never see anyone discuss is “personal property tax” which can be a surprise when licensing vehicles and campers and/boats
VA is one of them.
So is NC
And MO
it’s a “fee” not a tax is the ruse
CA hits you here, plus gas taxes, tires, batteries...
Bravo. You are the first person to correctly analyze tax burden.
I fear in this next election, the tax burden is about to get A LOT heavier. Read my comment on the new wealth tax congress has sitting. No one has acted on it yet. Hopefully they never will. Keep an eye on your representative. Keep them in line.
I laughed out loud when you described work as a "suboptimal hobby". That's exactly right! Thanks for helping me reframe the next few years of the grind.
It depends on what you do for work, doesn't it? Some people actually enjoy what they do, so there is that to consider in financial planning 😊
We chose Kentucky over Tennessee for several reasons: the county we're in offers homeowners exemption for 65+ seniors on property/houses, they do not tax SS funds & only pension fund income over 30k+, sales tax in our county is mostly the flat rate of 6% ---- yes, property tax on vehicles (its vehicle registration in CA where we came from) and some other items but cost of living, fuel prices are better than Tennessee. We did become texas residents for full time rv traveling which worked for us at the time, but to settle down permanently there was too expensive in many areas. So we chose Kentucky instead.
Seems like a spreadsheet could be made that allows one to enter all forms of income, real estate, and spending then ranks the states highest to lowest in total taxes.
That's a very good idea but the government wouldn't allow that because it would expose loop holes which would be taken advantage of, which probably mean they won't be loop holes for long but if you do enough research yourself you can find the best one but they're all getting pretty pretty high in tax percentage on the income made
There is not a way any government would be able to prevent such a spreadsheet from being made. After all, it is JUST information - PUBLIC information too. If it available to CPAs, then it cannot be hidden by the Government. And certainly everyone has the right to see what taxes they will pay, the money cannot just be taken from you without your knowledge. @@Joseph96752
@@path4061how did that work out?
@@path4061 nothing wrong with that at all, glad to hear that it was rather lucrative! 👍 and thanks for replying back.
@@path4061Fabulous! And exactly the kind of thing I’d do!
I've lived in America and Canada. Paid about the same in taxes but get way more for my taxes in Canada. Most Americans hate the government (hate giving them their money even more) because they've never experienced good governance.
I honestly think America needs a completely restructure of their political system. It is just not working. Trump and Biden being elected out of 300 million people to run the country is evidence for that too.
This is why the US should elect more progressive politicians, who know how to manage budgets and give us (yes, pur country's initials literally spell out that pronoun) much better tax credits in return for better public education and better public healthcare. but since these are nonexistent, my husband and I are being guided to finance our retirement and healthcare through a diversified investment portfolioportfolio
Interesting, Mind if I ask you recommend this particular professional you use their service? honestly right now i have quite a lot of marketing problems.
'Rebecca Nassar Dunne’ is the manager I use. Just research the name. You'd find necessary details to set up an appointment.
I searched her full name online and found her page. I emailed and made an appointment to talk with her; hopefully, she gets back to me.
Enjoyed your vid. As my econ prof said decades ago, "no such thing as a free lunch so you better look at the back of the menu". Thx
LOL! So true!!!
We live in Alaska where there is no state income tax, no state sales tax. The first $200,000 of property tax assessed is waived for seniors over 65 years old. Plus an annual Permanent Fund Dividend check from state oil investments for every state resident regardless of age.
Who would want to retire in AL, polar bears? 😂
The extreme cold, darkness and ice not good for seniors.
@@riverrock335 Cross country skiing is great exercise for seniors.
@@rainacherienne1010 Fishing and Hunting Paradise!
You are going to have to learn to speak Russian soon though.
Commenters seem to want a personally-tailored video and an hour-long consultation. I think you did a damn good job for 12 minutes!
I appreciate this comment. Thanks
We must be reading different comments; almost all of the ones I looked at were thankful or adding additional information about their states for others to learn from.
Nice video. Great to see someone talk about all of the little things that eat at your retirement budget. I might add the cost of maintenance, insurance, and utilities of a home or condo. Things like paying for snow cleanup, hurricane insurance, etc. should be factored into an annual budget.
Yes! Where I live, many condos have frightful HOA fees over $1k/month! And unlike property taxes which are subject to the 2 1/2% rule in the absence of an override, there’s no ceiling on how high they could go!
Food is taxed in TN. This was something that I figured out after I moved here from Nevada which does not tax food. Great information thank you.
You have to look at property tax by jurisdiction, not by state. Texas may have low property taxes overall, but the city of Austin is very high. So you have to look at the exact place you want to live. Same goes for Maryland. Property tax rates in Chevy Chase are very low, but Germantown is much higher-same county, but different jurisdiction.
So true. The comparison in the video of a $250k home in SC vs TX needs more context. A $250k home just about anywhere in SC is going to be a much bigger, nicer home than a $250k home in Austin.
What part of Texas has low property taxes?
@@lisamccoy6167 why don't you do some research instead of expecting everything to be handed to you?!?
@@TwilightxKnight13 I don't expect anything to be handed to me. I have worked HARD for everything I have. Speak want you KNOW. HAVE A NICE DAY
Some things get even more complicated. For example, KY did not change their sales tax rate, but about 2 years ago they expanded it so that now services are subject to sales tax--so things like getting your hair cut or lawn mowed are now taxed.
and still has a big income Tax
KY also has a Income Tax
@@dknowles60 They used to exempt %40K of retirement income, and decreases that to $31K.
CT also does the same though.
They reevaluated our property tax so they could pay for the roads and education. Teachers and bus drivers in Louisville are still leaving in droves due to the pension gone. We are growing in taxes. Estate tax and retirement tax. High car insurance due to dangerous roads. Road repai4s are causing accidents caused by Halls paving. They are desperate for cops due to riots. I want to move so bad but can't.
In Maryland, you need to add about 3% local county income tax to the state income tax.
Thank you. When factoring your considerations into my pending move to a low tax state (TX). I found I'll be paying more taxes than I thought I would, but it's also not as bleak as the example.
Another thing to look at is the price you will pay for homeowners insurace. Property taxes can be misleading also because many municipalities add on city and school taxes. Because of this you don't get a clear picture of what you will actually pay when looking at some of these sites that give you the average property taxes for a state.
Literally this. Between homeowners insurance, county, local (township/municipality) and school property taxes (which I'm in one that's in lower half of the millage rates compared to the rest of the county), that amounts to more than my annual mortgage payment..even with a homestead credit.
This is in one of the "Most affordable cities" in the country (because the articles and websites flat out ignore the property taxes, especially schools in Pennsylvania)
So true.
A good video for rich people. Most retirees have less than 50K/yr income. Most states ignore low income retirees in taxation. Live someplace beautiful, where family, friends, and you look forward to the day.
True. “Retired” used to mean “not making much money anymore, biding time, making peace with the world.” These vids act like everyone is looking for the best location for capital investment in a new manufacturing plant.
Not necessarily a video for "rich people", but a video for people who have enough money that it might matter to them where they live.
Not mentioned is that various taxes in many states differ depending on your city/county. For example, most of the counties in CA have added sales tax and property tax.
Yep, some Bay Area cities are 10%+/-
a few years ago I was contemplating an Arizona move from California. When I ran the numbers the real savings was only in gas. I figured not really worth it considering in retirement won't be driving too much.
Would the HVAC costs be high? Arizona summers are brutal. 🥵
@@debbabe2254yes!!! I tried AZ in 95,96’ too brutal couldn’t do 20 plus years there
Great point. I live in WA and while there is no state tax (for now but my gut tells me that might change), everything else is extremely expense from home prices/rents, food, gas, high sales tax and depending upon the county, you will pay very high automobile registration. Because real estate has increased to insane levels, so has property taxes gone up in counties that use to be more affordable so yeah, I won't be paying any state taxes on my SS or my 401K withdrawals, but I am paying dearly in other areas.
Do you mean Washington DC? Washington has a 6.50 percent state sales rate, a max local sales tax rate of 4.10 percent, and an average combined state and local sales tax rate of 8.86 percent
@@RetrieverTrainingAloneobviously not, no one calls DC "WA", and Washington state is well known for not having personal income tax
@@Datamining101 We live in Alaska where there is no state income tax, no state sales tax. The first $200,000 of property tax assessed is waived for seniors over 65 years old. Plus an annual Permanent Fund Dividend check from state oil investments for every state resident regardless of age.
During my research, they tend to get you one way or another. If it's not income tax, it's vehicle registration and if it's not that, it's property tax. The differences aren't as big as they might seem, not to mention cost of living, median home costs, etc.
Tennessee has no income tax, but 10% sales tax (as an example of what you're saying).
@@teekay_1 Yeah, Texas has no income tax, decent sales tax, very low vehicle registration fees but the property tax is where they get you. Pick your poison.
Unless you live in Alaska. No state income tax. No state sales tax. Property tax exemption on over $220K after age 65. Property taxes went down overall by over 8% this year. Alaska pays every resident an annual dividend since 1982 of over $1200 a year. Car tags convert to "Z TAGS" (Permanant Registration) after car is 8 years old or older. Insurance costs are lower. I pay $2400 a year to insure 3 cars, homeowners and umbrella policy. Utilities have not gone up in the last 5 years. Inflation is low overall as some things have gone up but other things have gone down.
Im 50 and retired 4 years ago. I have no intention of leaving Alaska. I also own property where there are no taxes at all. Alaska is the only state where there are areas where there is no property tax at all.
@@ALCAN52 Well, yeah, but then you have to live in Alaska. Some might love it, but it's not for everyone. I want to be somewhere that stays well above freezing.
@@ALCAN52 currently that is the case. But as cars switch to EVs the Alaska oil money that allows those low taxes will dry up. My guess is in the next decade or so Alaska will be looking at a state income tax and/or sales tax.
In rural Alabama we had a volunteer fire department with antique equipment. No fire house or anything. They would call the firemen one by one, who would rush to your home independently. Along with the guy who kept the firetruck in his yard. And the school books were very old. I remember my 1981 science book saying "Someday man may walk on the moon." The schools were unbelievably old. Sales tax was very high, but property taxes were almost non-existent.
Yep. I just compared Alabama, Florida, and Texas, just on the cost of living, taxes, etc., Alabama wins. However, public education in Alabama comes in at the lowest rank. Also, the Sales tax in Alabama is one of the highest. But if you are retired then you probably have all the stuff you ever want.
Dude! Just found your channel and as a 62y/o MBA/CPA/CMA, you are spot on - I’ve always shared the following guiding principle - whether a state taxes you on an income basis and/or a real-property and use-tax basis, andd/or if SS income is taxable/tax-exempt, when it is all normalized and said/done, mostly it is a wash…
a fallacy that i always see regarding property taxes is that most people only look at the effective rate as a percentage, but they never take into consideration the median value of the market. your example of hawaii was spot on. yes, the percent is super low, but the cost of homes there are insane, thus, paying MORE in property tax.
Absolutely - the property tax or military “rate” is meaningless! It neither takes into consideration the local budget demand nor assessed property values!
One of the things with property taxes is whether you are paying against assessed value or market value.
Assessed value is the state's opinion of what market value is. You might be thinking of taxable value.
@@FreedomTalkMedia No, assessed value is the correct term, at least in some places. In California, where I live, my assessed value (what I actually pay tax on) is much lower than the market value of my house, because the state imposes a limit on how fast the assessed value can increase (it can increase by no more than 2% per year). So if you've owned your house for a long time (which is the case for many retirees), you're paying much lower than market-rate property tax.
@@DaveBroTube So they are just using a different terms in different states.
Excellent. So why cant I find an online tax calculator that helps me rate all states overall based on my own input values?
Smart Assets will calculate state and I think municipal taxes in but not sales tax.
I would think that there would be another tax situation that could be added to this conversation. There are states where people still pay tangible personal property and/or durable assets taxes.
Yes. While living in Arlington VA in 2014-2018 we payed personal property taxes on our vehicles. Had three cars, with children still at home, Arlington County personal property tax on the vehicles was over $4,000 one year. You do get a sticker for each car.
Just an update to your map. Washington’s capital gains tax has been stuck down as unconstitutional by a superior court. It is currently being appealed to the State Supreme Court who have schedule to hear it this month.
So true in most cases. My Dad moved to Michigan from Massachusetts to retire because Michigan has cheaper housing and rent then most areas in Massachusetts but he's moving back after 6 years because after all considered he's paying more in things like car insurance and food prices and not having the same options as in Massachusetts especially being close by to neighboring states for competition on certain goods and services. Sure Massachusetts can be Taxachusetts but can also be similar to most other states when considering a lot of factors and what you actually pay for and have like employment opportunities, rate of salaries, access to quality Healthcare and education, transportation opportunities, infrastructure, crime rate, climate, income inequality gap, substance abuse and impact, competition from close by states or are you confined to just that state and it's way of business rather then having other states that may or may not be competitive in goods and services while being a short drive away. Always do your own research then relying on just one aspect or hyped version of what could be rather then what actually is ✌🏽❤
Yes! Long-time Massachusetts snow-loving resident here. Our cost of housing here is through the roof, but there’s a high return on investment in exactly the aspects you detail. Even within the state, the numbers can look very different due to property taxes (mostly due to public schools) and local add-ons. Every now and then, I re-examine the costs, relative to other states, but always decide my quality of life couldn’t be better anywhere else. From HMart to Wegman’s to local farm stands to zipping up route 3 to NH’s Market Baskets, from live world-class music to the best health care in the nation, from very messy town meetings to access to the Atlantic ocean, we seem to have it all. But surely at a price. I do hope your dad didn’t take too much of a financial hit moving back, housing wise.
@@FR-tb7xh thanks for the acknowledgement. My Dad hasn't moved yet but is in a few months, needs to sell his condo first. He already knows what to expect as he's from RI and lived in MA for over 20 years and has his family as well as me to update him on living here. I ponder like you often on retiring in another drier state but can't see the point when all things are considered. No wonder why MA and neighboring states get high marks for best states to live in the country.
Thank you. 👍👍 This video is a great public service and should be watched by anyone thinking about retiring elsewhere.
A non-tax input I put on my list a few years back is the prevalence of medical bankruptcy in a state. Turns out it concentrates in certain states, which I suspect says something about what you get for your money in that state.
Ok, what states have highest medical bankruptcies?
Looking back at my notes - it wasn't medical bankruptcies directly, it was unpaid medical bills and bills in collections. I had donated some money to RIP Medical Debt, and was considering whether to give some more. I found myself concerned that a lot of their forgiveness was concentrated in certain geographical areas. But then when I tried to find numbers on where medical debt and medical debt in collections was highest, it was in the same geographical areas. The highest numbers are in the south, the lowest are in the northeast and west - though in each area there are outliers. AFAICT, part of this starts at the coverage end (whether the state's approach to healthcare is expansion or minimization), but part of it is also at the protection end (how lack of ability to pay is handled). My concern is the resulting culture, as I've had a few intensive interactions with the healthcare system in my life, and sometimes the problem isn't whether something is possible, it's that they simply ignore you while things unravel.
Anyhow, low tax rates isn't a huge advantage if it also risks poorly-addressed health conditions.
@@ScottHess thanks so much for a well thought out reply. It’s refreshing to see that kind of info being shared here.
Moving to Tennessee from Minnesota dropped state income tax by 7.5%, property tax 90%, for a .5% Increase in sales tax.
Does where you want to live come into the decision? Seems like looking at costs alone will lead to some poor decisions for some who do not consider the community and culture of the place that may be financially attractive on paper 😊
@@mike-uw6wt with the summers that is a fair con, but I do enjoy the black bears
@mj8495 my in laws live down here. First time we've had a baby sitter.
@@mike-uw6wtretired to TN. Great state to live in. One of the reasons so many people are moving here. Here are a few reasons:
1. One of the lowest overall tax burden states in the nation
2. Low cost of living
3. Low cost of real estate
4. Lots of beautiful places to live. Not many places where you can get a nice house on the river for around $300k
5. Good health care.
6. Free first two years of college - including for people who are older
7. Much less traffic and better roads than so many places
8. People are very friendly and will help each other all the time. The other thing I have found is that the kids are overall very polite and respectful (of course not all but the majority)
9. Cities such as Chattanooga, Knoxville and Nashville that vibrant, great music, great food, and easy to get in and out of. Also lots of places to get outdoors- Chattanooga River walk is so great
10. The climate is excellent- can be hot in the summer but overall mild winters and wonderful spring and fall
That is to name just a few.
@@BoomMC_Inc sounds like a win, congrats
Many get so focused on specific taxes, car registration prices etc. Services and infrastructure cost money everywhere, that money has to come from somewhere, if it's not one tax it's another.
When I retired, we moved from South Florida to central New Hampshire. Everything is cheaper in NH. That includes taxes, insurance, utilities and groceries.
Something to note is that property taxes vary greatly within most states depending on the county and city. In NH I could be paying 3 times as much within the state.
I would love to see your comparison of total costs between Minnesota and South Dakota. Thank you so much for this helpful information!
California's income taxe rates are a bit deceiving because everyone likes to focus on the top rate of 13%.
But the lower and middle tax brackets are actually quite reasonable. I made $82,000 last year in California and my effective state income tax rate was around 5%.
Oregon has the worst income tax, because you hit 9% before you get to $5k. And yeah we don't have a sales tax, but have a horrible property tax. I'd rather pay 9% on what I spend than on what I earn.
I don't know what you mean by 'effective' tax rate, but the CA marginal rate on $82k is 6% for married, and 9.3% for single filers.
@@captsorghum Effective tax rate is the total taxes paid divided by gross income. Its more representative of your actual tax burden.
I'm not saying 5% is low but it's comparable to many other states.
And Ca still has Prop 13 which limits property taxes, they also don't tax social security or pensions. So if your not make much money in retirement CA is not bad, but no one can ever retire because they screw you so bad when your working. So people just work and die.
@@scotttild Make no mistake, CA has massive downsides and is not a good place to live right now. I just figured it was appropriate to dispel this widespread notion that everyone in CA pays ultra-high income taxes. It's just not the case. I just tell it like it is.
Really eye-opening video on state retirement tax considerations. Made a complex topic easy to understand. A must-watch for future planning.
I wouldn't use the max tax rate for each state as that can be deceiving since it typically impacts a small % of residents. Ex. NJ top rate is 10.75% but that is for income OVER $5 mil per year. 99% of all NJ residents will pay no more than 6.37% (up to $500K) for a married couple..
Regardless of your state of residence, if you own property or an online bank account in one of the states which has an inheritance tax, your heirs will be in for a rude surprise when they learn that a remote state suddenly wants a cut of their inheritance (and is legally entitled to same)!
California property tax can be ridiculously low if you bought your house a long time ago. The property tax is based on purchase price
I'm glad that you added, "It's not all about taxes" at about 11:05. Apart from the numbers, which are of course important, ask yourself if you're going to be happy waking up in state X as opposed to your first choice, state Y, just so you could save a couple thousand in taxes. I am perfectly willing to pay a couple K more to have good weather 9 months of the year, as well as plenty of leisure and civic activities to make life more enjoyable.
Since there exist an infinite variety of types and amounts of income, expenses and assets and since each state imposes its unique complex tax regime, a full and proper analysis is beyond human comprehension. Even the most advanced computer analysis couldn't included how far one would be willing to travel to purchase goods free of sales tax or gasoline across a state line.
I think the best one can do is to identify some likely choices and then work out a pro forma tax computation for each one.
Everyone has preconceived opinions about certain regions and certain states regarding weather, culture, taxes, etc. I have been happily and economically retired for years in a town that I discovered accidentally in a state that neither I nor any "expert" would have thought to consider. The house I sold to move here afterward appreciated enough to outweigh any tax considerations. So life is a bewildering mixture of rational action and pure chance.
Great video I been saying that for years. Once you figure all the tax burden macros it’s very clear California is the winner plus the weather
Not to mention Prop 13. I believe the only state in the country with this protection. And California does not tax Social Security income.
@@jonr1138Sacramento is looking to dissolve prop 13.
This is similar to the pre retirement analysis I did. What I discovered is that property tax is a big part of the equation and is the one component charged in every state. In some states (e.g. TN) your property tax can vary county to county by a factor of 3x! (Whereas in CA it is about 1.25% statewide). This means that the exact county and the exact price of your property can have an enormous influence where that states tax, for your personal scenario, ranks across all states. In the end, the bottom 15 are probably definitely worse, and the top 15 states are probably significantly better, but for all the states in the middle of the pack, where overall tax burden are much closer, the exact county+city tax rate (+hoa?) and the exact value of your property can easily move that state up or down 15 spots on your list. IMHO If you can find a state and place you like in the top 10 rank, go for it; if not, then find a moderate tax rank place/state you really like and enjoy your retirement!
When I lived there it was 1% of the home value (prop 13) at the time of purchase and that never changed. Great for people who want to live in the same home but no so go for people that move around.
Ca is a fixed rate but they add user fees, Mello Roos fees and the house price is almost triple the cost of a house in TN.
Mello Roos is only in certain counties. Most CA counties do not have it.
Which states have stable property tax rates and which do not? California has Prop 13, which appears stable on the surface but I am finding out that the fixed percentage increase, which is guaranteed and is based on the previous year, meaning it is progressive, is like the boiling frog theory. Voters in California also tend to approve school bonds, park bonds and the like. Therefore, property tax is not simply that 1.2 percent on the initial purchase.
Nice lie I live in Tn 50 miles south of Nashville and only pay Property Taxes of 960 a year on a 200k home
I have moved from south carolina to wyoming and I love it. Great state.
He seems to suggest (#3) is one might shift from one state to another, depending on the financial situation. That is a very expensive endeavor for those with middle-class wealth, especially with the dramatic rise in housing prices seen in many states.
I’m ready to retire and looking at taxes since I’m from California. It’s nice that you give more of a reason to think about taxes and not to make a decision on taxes only. Most other videos just tell you about the state taxes. Shouldn’t Federal taxes be considered too or are they the same across all states?
Other part is that Counties also can ADD taxes to the state rate. Especially closer to metro areas.
We retired to FL from NJ in 2015. As much as we enjoy living in FL, at some point we decided not to stay. And that’s ok. The nice thing about retirement is you can pack up and leave when/where you want. In 2025 we’ll be moving to PA. Close enough to family and friends in NJ but not having to worry about all the crazy taxes there. And we’ll also be close enough to DE where they have no sales tax. So living in FL will have been like one long vacation for us and now it’s time to go back home. The good thing is that we’ve made such great friendships that we’ll always have different places to stay in FL.
WOW! As usual you did a lot of research . Thanks for all you do!
And of course cost of living in general. In July of 2023 I paid $5.37/Gal for gasoline in Washington state, and only $3.37 a few days later in South Dakota.
South Dakota winters are brutal. Energy costs to heat the home...😱
Additionally, there are special situations that you may fall into. If you were in the military in the 80s and receive a retirement check--NC does not tax that income (Bailey Decision).
Man, am I glad to live in Massachusetts.
Not because our taxes are good, but because New Hampshire is an obvious winner on pretty much all of these charts.
I just found your channel this is a very good video I plan on exploring your channel more. I moved out of Ohio to Western Illinois a little over a year ago. I didn't want to leave the Midwest so I started looking at property tax and home cost I found that a comparable house to the one I purchase in other Midwestern states would cost at least $70,000 more and in most Midwestern states a lot more, I could pay a lot of property tax with what I saved. One of the other things I found that in Illinois is the property tax exemptions that all homeowners qualify for and for me that's $11,000 off the Assessment and the Assessment is 1/3 of the value of the home. The license plate sticker is $151.00 a year but with what I save in car insurance it pays for the sticker and I still can put a money back in my pocket. 27 states have a property tax on your car Illinois doesn't. Sales tax is high here but I live very close to two states with lower sales tax. And one of the things that drew me to Illinois was Illinois doesn't tax any retirement income and the estate tax tax starts at $4,000,000. It really comes down to what you spend money on so research it well a lot of states don't volunteer to tell you what they tax. I can remember talking to people that move to Ohio and told me they thought the income tax was pretty good until they found out the also have to pay income tax not only to the state but the city they work in and the city they live in. Now in Illinois it cost a lot more to live in the northern part of the state so where you live in a state makes a big difference. And no matter where I live Ohio will always be home.
Ohio does not tax pensions, and SS is taxed only if your income exceeds $40,000.
There are plenty of articles every year that list “total tax burden” - that’s what you have to consider. Also tax “rate” can be misleading. Use absolute dollars for property taxes. California has a 1% tax rate but applied to the highest RE values in the country, property taxes can be staggering on higher priced properties.
In the past 2 years Colorado has added 85 new taxes and fees which are beginning to add up. So it’s not just sales, income and property taxes.
All these libs love their fees. Local sales taxes are out of control. We get nickel and dimed by every tiny little authority and quasi-governmental entity. And the sad part is people have to vote for that to happen!
You get what you vote for.
Thanks for telling the whole story people always brag about zero state tax they just dont tell the whole story..
Same thing happens with comparing countries...
One strategy might be to live in a state that is has zero income tax, but live in a border town, where you go to another state to make purchases. For example if you live in Tennessee, shop in Georgia, where state sales tax is only 2% to 6%. I think the sales tax in Tennessee is 9%.
The problem with that idea is that then you will have to live in said town and border towns may not be desirable places to live. Then there is the cost in time and cost in gas where you may be spending far more in gas than what you are saving in sales taxes. Say you have a pickup truck that costs you say $.20 a mile in gas but you might save less than a dollar in sales tax. Is it really worth all the bother to drive say a two hour round trip to the next town that is cross the state line just to save a dollar or two in sales tax?
@@Donkeyearsa TN is an absolute hellscape. I can't wait to leave.
@@Donkeyearsa Conversely consider Washington State with 8 to 10 percent. You can drive 2 hour over the border with OR, which has no sales tax. On a $3500 item, say big screen TV, you save $350 in sales taxes. Other items such as farm equipmemt or shop equipmemt can garner sVings in the thousands of dollars. So, in some cases with high ticket items not requiring registrations., it IS well worth it.
That's EXACTLY what I did! Live in Johnson county Tennessee. 30 minute drive to N. C or VA.
Every state with sales tax also has use tax, which means you couldn’t technically bring back and use the item you bought in the border state unless you declared and paid the use tax to your own state, thus defeating the purpose. Granted, it may not be enforced unless you’re purchasing large items and the state has some reason to look into it, but it’s something to be aware of.
Don’t forget about annual personal property tax which can be very significant in some states
So taking into account state income tax, sales tax, property tax, homeowners insurance and price of houses which states are least expensive?
Glad to have landed in Michigan 25 years ago. And now my pension tax is going away too. I live in Mexico during the cold weather BTW. :)
Thinking about moving from Oregon to Michigan, we have a house in Guadalajara where we can (comfortably) spend our winters. Where in Michigan do you live? I’d like to hear the pros of living there.
in addition to STATE taxes, dont forget the LOCAL taxes, many COUNTIES/LOCAL GOVERNMENTS also add on top of state tax... sometimes adding 50% above the state tax
How about establish domicile in a zero income tax and zero inheritance tax state and become an expat.
You also have to consider home and auto insurance. Also I live in the north east tip of Tennessee bordering N. C and VA. So I save on Tennessee sales tax. Plus property taxes are LOW in Tennessee! My combined property tax + home and auto insurance= just under $1200 a year!!
Wow. By any chance, are there any parts of Tennessee that get snow (I’m a serious snowbird)? Do you have mountains?
@@FR-tb7xh Yeah my part got 9 inches so far this winter ❄️
@@FR-tb7xh Eastern TN gets the most snow. Beautiful, you get all seasons.
@@Linda-ic1il Good to know!
If you go to the county property appraisers website in Florida you can calculate your property tax based on purchase price
A tool would be nice to input your incomes and expenses and it ranks the best states for you. Some states have sales tax but don't tax food.
@@_-Karl-_ and to make matters worse, my state offers tax exemptions for seniors IF your income is below a very low threshold.
In states with income tax, as mentioned in the video, income tax depends on source of income. I live in Maine which has an income tax, but social security and a significant part of pension/IRA income is not taxed. We also get the federal standard deduction plus a fairly high personal exemption. The result is that a retired couple living on social security, pension and IRA income pays little or no income tax. We do have a fairly high property tax rate and depending on where you live property values can also be high leading to high property taxes. Vehicle registration is also expensive particularly on newer vehicles, but annual fees on yachts are low. So in most states your personal situation determines the total tax burden.
You are correct. Texas has no sales tax on groceries or RXs. Seniors get a break on property taxes too and no personal property tax. Insurance seems to be higher than other states though.
Each state has its own income tax rates, and these rates can vary widely. Some states, like Florida, Texas, Nevada, and Washington, have no state income tax, which can be advantageous for retirees. Other states have progressive income tax rates that may increase as your income grows. It's important to consider how state income taxes will affect your retirement income and choose a state with favorable tax rates>>>
To benefit from Florida's no income tax, you must be a high income earner. If you make $60k to $200k, the reduction in income tax and cheaper real estate prices vs CA are not enough to justify the move. In FL, your property tax is reassessed to market every year and the average tax rate is 2.5x of Ca. Example, if you bought a 500k house in CA 3yrs ago and it's now worth 750k, your tax rate is still roughly 1.25% of the 500k purchase price (6k yr in property tax). Whereas in FL, you're paying 2.5% of the new assessed value of 750k (19k yr in prop tax). Also, you can insure a house in CA for $1000yr. Earthquake is anther $150yr. Insurance in Florida for a single family home is about 5x of CA. Tax and insurance costs in FL combined with the above scenario is an extra $18k a year. Just to break even with no state income tax you have to make about 180k a year. Forget saving money, just to break even.
And Florida also weather issues like Hurricanes and the associated insurance cost or lack of available insurance as more and more insurance companies leave the state.
I'd like to watch the video but the wallpaper, I just can't 😂
As many look at being around family in retirement, taxes can take a secondary seat in such a decision. Your information on what should be looked at is very useful for those considering retirement planning.
Though I'll be retiring abroad, I still plan on setting up and maintaining a retirement location here in the states. The biggest item I looked at was the estate tax, though capital gains is also a concern. Location and affordability, along with the retirement tax burdens had me looking to TN as my state of choice. The sales tax isn't a concern as an 'expat'.
If you move abroad, you'll still have to pay your federal and _state_ income tax. So for some people it make sense to get residentship in no income tax state.
I’m looking to escape my family and a toxic environment!
I moved to PA which has no income tax on retirement income, food and clothing are sales tax exempt, and live in an area where the property taxes are low. The gas tax is high but now that we are retired we don't drive much at all. We live in a town and are within 3 blocks of everything except grocery stores and shopping malls. It has an inheritance tax but spouses are exempt and children and grandchildren have a reduced rate. We are very happy with our decision to move here.
Where in PA? We are looking for a more retiree-friendly state, moving from Oregon.
One thing to mention, even though California has the highest marginal tax bracket in the country, the 13.3% is the bracket for couple's making over $1.25 million annually. If you look at the bracket sizes, you'll find that the effective rate is fairly modest for an average income. Some states have a flat tax and many states who have tax brackets automatically push average earners into the highest bracket fairly quickly. For example, my household income in 2021 was about 160K. Even though I was in the 9.3% tax bracket, my effective California state income tax rate was 3% after deductions. In fact, I cross checked my state income tax rate with all 49 other states and amazingly I would pay more in state income tax in about 35 other states compared to California.
As a long time California resident I have often argued this same point. The narrative that California was business unfriendly is a lie promoted by the right to inveigle people to their state. The plain fact is that taxes are not crazy in CA. The wealthy get a high tax on their capital gains but then they are making so much it still doesn't matter to them. Their mansions in Malibu are getting taxed at a fraction of homes in other states and even then get startling exemptions. Businesses have a lot of loopholes to avoid a step up in the very low property taxes when they buy property so even these guys are making out like bandits.
The truth is that housing is expensive because everyone in the world wants to live in California. Demand equals expense. Pure economics
@@Indy_at_the_beach Its not a lie on the business unfriendliness. Elon Musk said it best on why he build his new factory in Texas rather then CA. "It takes more time to get through the permits in CA then it does to build the factory in Texas". He build his entire new factory in less then two years in Texas and it would take a year in a half in CA just to get the permits. Not only is CA business unfriendly it especially towards small business. The amount of tax and permits makes it undoable. Why do you think a majority of small and big business are leaving CA. Chevron, McKesson, Just took over 10,000 jobs out and moved their headquarters to Tx, and that's just two big ones that left SF. And its not just those two. Over the last 10 year CA has a net loss of incoming or new business. SO to say that CA is a business friendly state is just a flat out lie. Its not.
@@scotttild The whole permit argument is VERY jurisdiction specific. If you want to build in Alameda County the permit process sucks! If you want to build in Turlock it is much less obnoxious. In general Counties are worse than cities. Exceptions are towns like Palo Alto. OMG never try to build there.
Every state has to get income to meet its needs and having lived in FL and now TX, I fully understand how higher property taxes in these states make up for no income tax. However, when we were searching for homes in TX, I was amazed how the property taxes varied by county. We ended up choosing a home in Hood county (outside of Ft Worth) where property taxes were 30% cheaper than neighboring counties. Being over 65, we also have the benefit of our property taxes being frozen for as long as we remain in our home.
For states with extreme weather conditions, I’ll throw a huge amount for utilities. Something I consider.
yes. Family members in Texas are running their A/C for much of the year. And then in winter they get hit with ice and freezing temps
If it's really extreme you pay higher homeowner's insurance too.
The sales tax in California is brutal. Just because it says 7.25% on the map doesn’t mean that’s what Hall California in Pere. Quite the opposite in fact, where I live sales tax is 10.25% which is a huge amount to add every purchase.
You also need to look at available services, not just taxes. So if you need, say, open heart surgery, or brain surgery for a stroke, you need to know what states offer in terms of medical facilities. And available doctors (i.e., how many physicians are available in your area, especially if you have medical needs).
Yes that is why I moved to Delaware, low taxes and insurance along with a good healthcare system.
@@Johnbaker-pt8rn I was thinking about deleware. How do you feel about it after the fact? Would you still do it? Where are the places in delftware you would recommend and why? If you don't mind.
South Dakota is one of the best states to move to... if you can take the very cold winters.
We retired to Texas because everyone said it was the best place for money. We lasted 5 years. We realized unless you were born in Texas or in the South, the social dynamics didn't match us at all. The amount of property taxes we were paying were really high and they kept going up. The schools and healthcare were not too great either. The weather is what ultimately made us move to California. Nobody talks about the heat, humidity, pollen, and bugs. It was just too much for us.
We returned home to California and live very happily in Napa. Sure, it is more expensive, but not that much more expensive than Texas, and the return for what we get is incredible. The weather is fantastic, excellent schools and healthcare, so much to do here. There is something to the people here, so diverse and always trying to get better. When we were in Texas I swear it felt like everyone wanted to live like it was 1985. I just didn't get it.
If you can afford a place, then I would move to where you are most happy. For us, it was California.
I can understand that most of what you wrote was opinion and you are certainly entitled to yours. But, Texas has world class hospitals and doctors. Also, if you’re a senior citizen or disabled, there are many tax exemptions that keep property taxes very reasonable.
1985 was a great year. The humidity not so great.
I went on a job interview in Houston back in 1980 and turned the offer down because one of the interviews told me that their kids could not play in their own yard due to the fire ants!
@@Tootsie806 Texas does not have very good healthcare. I'm sorry to say that, but my wife and many of our friends are doctors and healthcare executives and what you pay for and what you get are not good at all. My sister lived in San Antonio and when she got cancer the care was really bad. We moved her out to California and the difference was incredible. Treatment, care, options, cost...all better in CA.
@@UrquidezFamily
M.D. Anderson is one of the finest cancer hospitals in the world ( rated # 1 in the U.S.). People come from all over the world to the facilities in the Houston Medical Center. Methodist is nationally ranked in 10 adult specialties.Baylor St. Luke's Medical Center has been recognized as a Best Hospital for 2023-24 by U.S. News & World Report. These are not anecdotal opinions, but rankings based on actual criteria.
South Carolina drastically reduces your property taxes once you reach retirement age (65 I believe). Further, even if you aren't retirement age, if your home is your primary residence, you get a big tax savings over someone who doesn't live in SC full time or vs. a 2nd property.
Other states may do this as well - I don't know if this analysis takes this info into account.
This was a great video. We get so many people bitching about living in one state vs another. I always tell them that if a state wants your money they will find a way to get it.
My folks live in SC. They charge taxes on vehicle registration every year. Im not sure the exact formula but it’s something to consider. Especially if u have a lot of cars and other toys.
100%. Several other states besides SC charge property taxes on vehicles/RV's/motorcycles, etc. as well. And those rates can vary considerably from county to county within that state as well. Depending on the value the state assigns to those vehicles, your yearly tax bill bill can be very high.
The ad valorem tax in SC is high and never ending
Does your firm offer fee based planning rather than ongoing fee management?
Would also love to see fee based planning
Usually, a fee-based service is offered by a financial advisor who charges an annual percentage of the client's assets as a flat fee for all or most professional services. I presume you are asking for fee-only services.
Well researched and explained! Would like to see a full summary table with all states and tax types
When we moved to North Carolina a couple of years ago we had to pay a tax on our vehicles before they would register them in the state. Almost a grand total for 2013 and 2015 autos. Sneaky taxes that no one talks about.
Then you pay property tax every year on vehicles in NC
@@noreenn6976. After the first year its pretty minimal. On these same vehicles our second year taxes/vehicle fees were about $75 per vehicle.
You also need to look at what you get for your tax money. Some states with low taxes and fees overall have crap services and are flooded with riff-raff. You get what you pay for (hopefully). My state is high tax but we get good services, and we are right next to the border with a cheaper state that has all kinds of problems.
Listening to this video, I can't help but wonder why any country would allow the system to waste so much manpower just to figure out how much tax to pay to the government every year, even after death!
It's a tax on top of the tax. Ridiculous indeed...
@@_-Karl-_ 😥
The US is mired in 18th century political philosophy is why. Federalism was great two hundred years ago but it's basically insanity today.
@@_-Karl-_ I alone spend that much time !! And its getting harder and harder, with so many rules. Notice that IRS does not have tax preparation software of their own.
USA is a big country that has huge differences between states in environment thus huge variance in industry that formed. Each state was like its own country. USA is like all of Europe with each state a country of its own. Does all of Europe have the same tax? What is needed in one state as far as infrastructure isn't the same for another. Roads are more expensive where mountains and obstacles exist in comparison to flat states. Building in Florida is a challenge with sinkholes a fun factor. We have everything from mountains to desert. Swamps to forests. So yes each state has a different tax strategy as each state has different topography, industry, infrastructure and needs.
Another consideration is Personal Property Tax, such as in Virginia. Every car, motorcycle, boat, trailer, scooter, every vehicle you own is subject to personal property tax. This tax tapers as the vehicles age, but you can end of paying a chunk of money in PPT in VA if you own multiple vehicles. Also, consider how much it will cost to insure your vehicles based on zip code. You could easily add another $5-$10k per year to your expenses just paying PPT and insurance coverage. Also depending on your zip code in Virginia, your property tax burden can be very expensive. Fairfax County, VA has one of the highest tax rates in the US. Alexandria, VA is a commonwealth and has taxes upon taxes. There is so much to consider. You really have to cover all your bases. Just food for thought.
I thought VA eliminated the personal property tax, at least as it is applied to vehicles. All of Virginia is a commonwealth, not just Alexandria.
This was a well done video. Thanks for the info!
Political and social climate is also important. Choosing where to live should not be decide solely on financial considerations alone. But, I like this video. A nice video reminding us to consider everything before making a decision.
So what is the best overall state to live in? It seems to depend on whether you are working or retired, but that is the least expensive in general.
If you're focused on minimizing or avoiding taxes on your income, assets, and purchases, I would think Alaska would be the state. Dress warmly.
@@kenc2257 Does Alaska still give out free oil money to its residents?
Colorado is not low on property taxes if you are in a metro district as property taxes goes up to 1.25% in many cases
Excellent information! Even for those expats like myself living abroad! For banking purposes etc., we must still stay connected with a U.S. address. Frankly, I live very comfortably in Central America on 1/4th of my monthly income.
I've been considering which state to establish residency before I move abroad. Based solely on the state income tax rate, I've considered TX or TN. But did you take a different view? I'm curious how expats approach this.
@@Angela-ne9cyLook into South Dakota. It only takes 1 overnight visit and signing up for a mailbox service to establish residency. And no state income tax.
where in central america?
Missouri just changed their taxes related to Seniors in 2024. They’re giving Seniors bigger breaks. No longer taxing Social Security. In many counties they also freeze your property taxes so that tax won’t go up.
States like Florida and Texas do not have income taxes but take that same tax money back on your property taxes. It's simply a changing of the the buckets not a big reduction.
To some degree that is true, but not entirely. Texas gets significant amounts of money from oil and gas production taxes, as well as the fact that some oil wells are on state property and the state gets significant royalty payments for those wells. In Florida, they charge higher hotel and rental car taxes (over and above most other states) to offset the lack of income taxes, and these taxes are paid mostly by out of state tourists. Same with Hawaii and Nevada.
Excellent video with so much information! I have been googling the topic and got bits and pieces but your video has a lot more. Thank you!
I live in New Jersey. NJ has no Estate tax, it has a horrible Inheritance Tax. The NJ Inheritance tax is NOT based on where the beneficiary lives (as your video mentioned), it is based on where the retiree lives. There is a 3 year claw back. I have no children, have a cat, he can't inherit. I have a niece (57) and nephew(55) who will get all my assets, however, NJ considers then a class D beneficiary and will tax at 15-16% with a $500 exemption ... painful. Ridiculous. It is the responsibility of the executor to insure that this money is paid. If my wife pre-deceases me, I will sell our house and move 1000 feet to NY state and save lots of money (she will not move). I may try adopting my niece and nephew to beat the tax, but their mother (my sister) is still alive, I can't adopt them while she is alive (at 85 years old)
Maybe set up a trust or start gifting assets while alive to get around it?
@@McNeelyTheGreat A trust will not work, I have a good estate attorney. The only thing that works is moving.
look into setting up a trust for your assets and have them listed on the trust so they can access and control the money and assets
@@BLACKHEAT1028 An irrevocable trust will not protect assets from the NJ Inheritance tax. All I can do is move to another state.
So if you live in NJ and inherit money from a relative in Florida, the inheritance is 100% tax free??
Great video!
Other considerations: age at retirement, vehicle registration/license fees, and potential excise taxes! We would be moving from a state with no sales tax to a state with no state income tax… big difference in what we’d pay just for our vehicles between South Dakota, Wyoming, Texas, and Tennessee! So much to think about!!