While there are many factors to consider when choosing the
place where you will retire, the ones that will impact your wallet may be the
most important. Why? Because having a low crime rate and beautiful
weather will be irrelevant if high costs deplete your retirement nest egg
faster than anticipated.
Recently Investopedia.com compared cost-of-living and
tax-rate data from Bankrate.com’s list of “Best and Worst States to Retire” and
Kiplinger’s list of “10 Worst States for Retirement” to come up with their list
of “The Most Expensive States to Retire In.”
We’ve added Genworth’s “2015 Cost of Care Survey” to the mix to come up
with our five most expensive states for retirees when comparing cost of living,
tax rate, and long-term care expenses (as listed in
alphabetical order):
·
Connecticut
ranks #3 in tax rate and cost of living and #2 in long-term care expenses. Along with a state estate tax, Connecticut is
also one of only two states that collect a state gift tax (New York is the
other).
·
New
Jersey ranks #2 in tax rate, #6 in cost of living, and #4 in long-term care
expenses. Along with a state estate tax,
New Jersey is also one of six states that collect a state inheritance tax.
·
New York
ranks #1 in tax rate, #4 in cost of living, and #5 in long-term care
expenses. Along with a state estate tax,
New York is also one of two states that collect a state gift tax (Connecticut
is the other).
· Rhode Island
ranks #8 in tax rate, #9 in cost of living, and #10 in long-term care
expenses. Rhode Island also collects a
state estate tax.
·
Vermont ranks
#9 in tax rate, #10 in cost of living, and barely fell out of the top 10 by
coming in at #11 in long-term care expenses.
Vermont also collects a state estate tax.
Final Thoughts on
Where to Retire
Each year the statistics on tax rates, cost of living, crime rates, health care expenses, and weather are sliced and diced to come up with various lists for those approaching retirement to consider. But in the end the choice of where to retire is personal. While the financial data may point you away from or to a particular location, staying close to your support system of kids, grandkids, other family members, and friends may be priceless.
No matter where you end up deciding to retire, you should
obtain qualified estate planning counsel to make sure your plan will work when
it’s needed. If you plan on relocating upon retirement, living part-time in
another state, or traveling extensively, we encourage you to contact us, so
that we can assist you with your estate planning needs.
Additional Resources:
http://www.investopedia.com/articles/personal-finance/060215/most-expensive-states-retire.asp
To comply with the U.S. Treasury regulations, we must inform you that (i) any U.S. federal tax advice contained in this newsletter was not intended or written to be used, and cannot be used, by any person for the purpose of avoiding U.S. federal tax penalties that may be imposed on such person and (ii) each taxpayer should seek advice from their tax adviser based on the taxpayer’s particular circumstances.
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