Senior Friendly States - Rodgers & Associates

Senior Friendly States

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A recently retired couple consulted with me about moving out of the great state of Pennsyl­vania. They were not from the area origi­nally and wanted to be closer to their children and grand­children. What are the pros and cons of living in one state versus another? Are taxes the only consideration?

Many people dream of retiring and moving to a warmer climate. Florida has been a popular desti­nation for many retirees. An ideal retirement location should have easy access to recre­ational activ­ities that you see yourself partic­i­pating in. An outdoorsman may prefer an area with hiking trails and lakes. US News & World Report recently did an article titled “Best Places to Retire” and broke locations down by 15 different criteria – bargain hunters, wine lovers, history buffs, and singles are just a sample of the ways they segmented the locations.

Financial issues are easier to quantify but you will ultimately have to decide what is important to you and what costs you are willing to pay. The first financial consid­er­ation is income tax. Pennsyl­vania does not tax retirement income. Many states such as Virginia and North Carolina do. If a signif­icant portion of your retirement income is derived from a pension or IRA withdrawals, this could be a big factor. Property taxes are another important consid­er­ation. Some states will give seniors a break on their property taxes. Find out what criteria the state uses for property tax relief so you can determine if you would qualify. The Retirement Living Infor­mation Center is a good resource for comparing the taxes in one state versus another. The site breaks taxes down by income tax, sales tax, taxes on retirement income, property taxes and tax on military pay.

Living near your family in retirement has a lot of benefits. However, there can be a big difference, tax wise, between living next to them, in the same state or just across the border. Make sure you do your homework before making a move.