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We spent two years experimenting with the cost of retirement living in Idaho, versus Arizona, California and Washington State and as a retired accountant, this is what I believe.
One must compare costs as apples versus oranges and understand that quality of life is different for different people and people are willing to pay more, for what they VALUE.
For us, in our mid sixties, life is a bit more of a struggle in the Northwest than in California or Arizona, where we can move around better without snow and ice, for example.
I compared clothing, in our budget. While living in one of Idaho's milder valleys...Orofino..we wore ice cleats strapped to our shoes and the better quality pair were $40. each...that was $80. for us to avoid slipping and possibly hurting ourselves. As to coats, it is possible to buy a good quality, slightly used, insulated coat for $25. at Goodwill but the better ski jackets are over $150. each...$300. for both. Add gloves, hats, scarfs, long underwear, boots, etc and if you are moving to Idaho for the first time, you can expect to invest at least $500. in clothing. For us, on a fixed income, that matters.
We found a lot of electrically heated rental houses and wished to have found more with natural gas. Our little house, that was well insulated, with glazed windows, etc cost $150. to heat during the mildest winter Orofino had seen in five years. Summers are hot and air conditioning is required for the many days when temperatures are over 90 degrees, so summer months, electricity was about $90.
Unlike PG&E in other states, Avista does not discount for seniors or low income people. There are grants to help but we never applied for one because we saw so many really poor people struggling in that area.
So although our rent was under $500. a month, water and trash were an additional $100. a month.
Next, there is gas to get to Lewiston for medical and less expensive groceries and other supplies. And for sure, when one lives rurally, everything costs more, not only because it has to be brought greater distances but because there is little competition. In fact, there is one family in Orofino that makes every attempt to keep competition away from their monopolies. Badly managed as their companies are, if one challenges their business practices or price, they just shrug you off because they can and there are no other choices.
So for us, it is cheaper to rent by the season, spend $800. a year on airline travel to enjoy a quality of life that makes up happy and generally, cost less because in our extended stays, the landlords take care of paying all the bills.
I am just sharing our experiences as renters, because when people say they are going to retire in Idaho for save money, I don't get it but maybe what you have been saying is that for initial real estate and taxes, there are savings?
One must compare costs as apples versus oranges and understand that quality of life is different for different people and people are willing to pay more, for what they VALUE.
I know for us, this is absolutely true. Our choice of retirement location was mainly driven by looking for the environment we wanted, not the lowest cost location. It's clear that if low cost of living is your primary consideration, there are better locations than Idaho.
Quote:
Originally Posted by clearwater66
I am just sharing our experiences as renters, because when people say they are going to retire in Idaho for save money, I don't get it but maybe what you have been saying is that for initial real estate and taxes, there are savings?
If you plan to buy a home, north Idaho is much cheaper than California. Based on our experience you will pay less in north Idaho AND get more - more property, bigger and newer house, etc.
Surprisingly, for us at least, we expect income taxes are about a wash compared to CA. The top rates are much higher in CA, but it also takes a lot more income to get into those brackets. Property taxes are lower in Idaho, even with the beneficial impact of Prop 13 in California. I suspect we'll pay more in sales taxes because Idaho doesn't exclude some items that are not taxed in CA, but I don't track our sales tax expenses so that one is a bit of a guess. So, overall, I don't think low taxes are a major reason to choose Idaho. It's not horrible, but like overall cost of living, if that is a major consideration there are better states than Idaho.
If you'd read around the Idaho forum at all, you'd understand that we all know that Idaho is much cheaper to live in the places like California, New York, etc. That's really not in dispute.
But when comparing Idaho to Washington state or Wyoming or Utah, this bears discussion.
And...about 30% of us who live here CAME from California...so yeah...we know what it was like to live there...it's why we left.
Thank you Sage for this encouragement. We don't live in the city, but the tax load seems heavy. (I haven't even shared my desires with my wife, as yet) The discussion on this thread has made me really consider if tax-wise, ID is really for us. I have a strong desire to come out, as my target area is Jerome & Twin Falls counties.
Recognizing I'll be well in my 70s, I don't want to jump at what appears to be a reasonable move for my family. At this point, reasons for moving are: likability of the people in the state (using this website as a measuring stick, there's a whole bunch of wonderful people); opportunities for experiencing some of the west; being much closer to our daughter & son-in-law.
I'm endeavoring to do all I can to beef up finances, ask questions of all these knowledgeable people & think things through carefully. In time I'm sure the answer will be there, the way to get there will be plain, and the place I'm meant to be will become crystal clear to us.
On the subject of taxes: I've got a colleague who relocated from Iowa to SoCal for work. Iowa would generally be thought of being a low tax state, and California, well, you all know what California's tax reputation is like. He tells me his effective tax rate is almost the same in California as it was in Iowa (where effective tax rate = taxes paid/income earned).
Now, I don't know how much he makes, but I'm sure he makes a pretty good living. The lesson here is that it's not just the top tax rate that matters, but the steepness of the tax curve as well. At 7.8% Idaho's top income tax rate is well below California's top rate of 10.55%, but Idaho's top rate kicks in at an income of $26.4k, whereas you need to pull down over $1M to get into California's top rate bracket. It seems that many states have found ways to get a similar amount of tax money from you, but they all do it in slightly different ways. I would guess that a steep tax rate on incomes over $1M would not result in much tax revenue in Idaho because there simply are not that many people at that income level in Idaho. In California on the other hand, there are enough of those people to make that an interesting revenue generating approach for Sacramento.
Overall, from a tax perspective Idaho is pretty much middle of the road. What I like about Idaho compared to California is that they do a much better job of living within that budget, whereas California still has a day of reckoning in the future.
I would agree with much of post, except on the issue of the tax rates in CA (since I still live and work here). If you make just under $50K in California, you are in the 10.3% tax bracket...that's the rate we are currently paying and my withholding (married and 0 dependents) still leaves us short when it comes time to pay the piper at the end of the year. I just wanted to lend some clarity to this misunderstanding. Throw in an average sales tax rate of 8.5% (average, not minimum), property taxes, mello roos taxes, luxury taxes (for boats and RVs), and high DMV rates, and you can understand why many look to Idaho as a reasonable and affordable place in which to retire...and you can include me in that group.
I would agree with much of post, except on the issue of the tax rates in CA (since I still live and work here). If you make just under $50K in California, you are in the 10.3% tax bracket...that's the rate we are currently paying and my withholding (married and 0 dependents) still leaves us short when it comes time to pay the piper at the end of the year. I just wanted to lend some clarity to this misunderstanding. Throw in an average sales tax rate of 8.5% (average, not minimum), property taxes, mello roos taxes, luxury taxes (for boats and RVs), and high DMV rates, and you can understand why many look to Idaho as a reasonable and affordable place in which to retire...and you can include me in that group.
If you are in the 10.3% bracket that means you are paying that rate on your last dollars of income and your effective rate is much lower. Your effective rate is your total tax bill divided by your income. We are fortunate to be in a high income bracket and our effective CA tax rate is a little over 7 percent. Assuming our income doesn't change it will be similar in Idaho.
I agree property taxes in Idaho are much lower.
OTOH, while the sales tax rate is lower in Idaho, it is applied to more goods and services in Idaho. For example, you pay sales tax on groceries in Idaho, but not in California.
Overall I think the tax situation is a mixed bag, but don't get me wrong, I still think Idaho it's a reasonably low cost retirement destination.
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We don't live in the city, but the tax load seems heavy. (I haven't even shared my desires with my wife, as yet) The discussion on this thread has made me really consider if tax-wise, ID is really for us. I have a strong desire to come out, as my target area is Jerome & Twin Falls counties. 
I'm endeavoring to do all I can to beef up finances, ask questions of all these knowledgeable people & think things through carefully. In time I'm sure the answer will be there, the way to get there will be plain, and the place I'm meant to be will become crystal clear to us.
