Budgeting

Retirement: Which State Should You Move To?

Every year, a large number of retirees move to another state. During 2018, almost half of them (43%) relocated to New Mexico. After that, Florida (39%) and Arizona (37%) are the second and third most popular destinations, respectively. Snowier locations, such as Idaho and Vermont, are also amongst the ten best states to retire in (or at least according to migration trends).

A Bankrate study shows that 60% of Americans want to move upon retirement. However, the U.S Census Bureau tells us that only 1.6% did so. This discrepancy reveals how difficult it is for people to go to their desired location, even more so if they don’t already have a place in mind.

When it’s done the right way, retirees can save a lot of money if they move. Some may find new ways to increase their earnings, especially those who want to work part-time or take on small projects.

Careful and attentive planning is very crucial, nonetheless. It enables Americans who are over 65 years old to identify the best states to retire in based on their preferences and leisurely activities.

Saving Money and Affording Life

Firstly, consumers should compare their monthly stipend or 401(k) payouts with the average wages in their destination. Generally, living expenses and salaries correlate with one another.

Yet, you should always consider the specific items involved, such as rent, electricity, and gas. Every person will weigh these bills differently.

To give an example, someone who lives in California is thinking about moving to either Nevada or Arizona. At the same time, they plan on making regular trips back to their hometown to visit friends and family.

In this case, the cost of gas in each of Nevada and Arizona matters, especially if they will travel via car.

Meanwhile, a household that is relocating to a colder state, such as Idaho or Vermont, might want to pay attention to electricity expenses. During the snowy winter months, this is going to matter most.

Personal preferences are just as important. For instance, a retiree who wants to spend their time fishing is better off living in a state with minimal licensing fees and requirements.

A wine-enthusiast, on the other hand, should find somewhere that doesn’t have hefty alcohol sales taxes.

The Best States to Retire in and Taxes

Senior man showing something on his phone to his wife in a restaurant

Income, property, and sales taxes are going to impact post-retirement life. Just as with the cost of living, the relevance of each type of taxes varies from one person to another.

Those who want to buy a home in their new location may put a heavy emphasis on property taxes.

A married couple that appreciates theaters, high-end restaurants, and shopping are more likely to be burdened by sales taxes. So will those who live on a fixed income in an affordable area.

Meanwhile, a retiree with a larger monthly payout might prioritize states with no income tax requirements.

Growing Your Income

Many Americans still want to engage in an activity or part-time employment, even during retirement. They should consider states that have work opportunities for them.

As an instance, a former oil-contractor could live in Texas, North Dakota, or Alaska. This makes it easy for them to find work as an independent contractor or a part-time employee.

Homeowners that plan to relocate also have the option of renting out their house. This provides them an extra income stream that would help cover expenses in the new location, on top of their monthly benefits.

Hurdles and Roadblocks

One of the main hurdles that retired Americans run into is the cost of moving. Equally as important, traveling back to their hometown and visiting family will not be cheap.

Because of this, many retirees decide to stay where they are.

However, if they take their time and carefully study the options, the savings can largely offset relocation costs. Lower taxes and living expenses, to begin with, are differences that consumers immediately notice.

Similarly, gas may be very inexpensive in their new town. Air travelers can take advantage of discounts and rewards opportunities, such as the Southwest VISA credit card.

Emergencies and Being Away From Home

One of the main benefits of retiring is that, unlike certain insurance policies, medicare is a federal program. Recipients can use it anywhere in the US.

Therefore, a health-related emergency shouldn’t cost retirees too many medical expenses, nor will it lead to any lost income, even more so when there is no job or employee that they need to work for.

Living away from family or friends becomes less of an issue to a retired household.

In addition, travel reduces the risk of heart disease and stress-related problems.  The long-term health benefits (and savings) that this leads to certainly makes moving worth it.

A Convenient and Healthy Retirement

Active seniors riding bike

What are the best states to retire in? The answer depends on who you ask. Some might prefer to avoid sales taxes, while others are mostly concerned about creating passive income streams that serve them while they retire.

Consider your options carefully. Will you rent or own? How much per month do you have in benefits? Which state offers the most convenient laws and taxes? What type of activities do you plan to engage in?

A healthy heart extends your life and careful budgeting enables you to conveniently enjoy a lengthy retirement.

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