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But Florida will be our home base. And linking that back to the subject at hand, the COL in North Carolina for retirees has become more expensive since making IRAs and 401ks taxable at the state level. As that will be our primary income in retirement, I'd rather live in a state that doesn't tax retirement income.
That's an interesting point. I wonder if it's a good idea for states to discourage incoming retirees like that, in order to court more people still producing...
That's an interesting point. I wonder if it's a good idea for states to discourage incoming retirees like that, in order to court more people still producing...
Someone needs to tell all the retirees moving to CH in droves that this place is not retirement friendly. If they were to be directed further south towards FL for better retirement living that would be a wonderful thing for all parties involved.
Someone needs to tell all the retirees moving to CH in droves that this place is not retirement friendly. If they were to be directed further south towards FL for better retirement living that would be a wonderful thing for all parties involved.
Not retirement friendly? Tell it to Del Webb, who just keeps building and selling houses to all those retired folks.
I assume that you're still young - too young to recognize what makes ano area good or bad for retirement. I can assure you that the Triangle has PLENTY going for it for retirees.
Not retirement friendly? Tell it to Del Webb, who just keeps building and selling houses to all those retired folks.
I assume that you're still young - too young to recognize what makes ano area good or bad for retirement. I can assure you that the Triangle has PLENTY going for it for retirees.
I was being facetious. I guess that doesn't always convey in text. haha.
Location: Chapel Hill, NC, formerly NoVA and Phila
9,776 posts, read 15,776,851 times
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Quote:
Originally Posted by Jkgourmet
Not retirement friendly? Tell it to Del Webb, who just keeps building and selling houses to all those retired folks.
I assume that you're still young - too young to recognize what makes ano area good or bad for retirement. I can assure you that the Triangle has PLENTY going for it for retirees.
I think he was being sarcastic. I was mentioning that the COL is not as retirement friendly in NC as it used to be since they started taxing retirement income such as IRAs and 401ks. Paying nearly 6% in state income tax is not very appealing when many other states don't tax retirement income. Of course there are other features of NC that make it appealing for retirement, but that is not one of them.
That's an interesting point. I wonder if it's a good idea for states to discourage incoming retirees like that, in order to court more people still producing...
Why?
Retirees don't tend to be the exciting people you target, but states still should. They are people with money saved up, so are spending, but not taking any jobs. They also don't require schools, etc.
You just have to worry about healthcare.
I think he was being sarcastic. I was mentioning that the COL is not as retirement friendly in NC as it used to be since they started taxing retirement income such as IRAs and 401ks. Paying nearly 6% in state income tax is not very appealing when many other states don't tax retirement income. Of course there are other features of NC that make it appealing for retirement, but that is not one of them.
THAT I can certainly agree with. The ridiculous liquor laws and lack of Happy Hours is another big detriment. No I'm not kidding.
From Retirement Living:
"Currently, seven states do not tax individual income – retirement or otherwise: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. Two other states – New Hampshire and Tennessee – impose income taxes only on dividends and interest (5 percent flat rate for both states)."
I wouldn't live in any of the above states, except for New Hampshire but I left New England to get away from the cold weather. Personally, I hate FL, except for a brief vacation in winter. The east coast makes my skin crawl. The more appealing areas of FL also have higher real estates prices, so in the end, you pay more in some whay.
Location: Chapel Hill, NC, formerly NoVA and Phila
9,776 posts, read 15,776,851 times
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Quote:
Originally Posted by ljd1010
From Retirement Living:
"Currently, seven states do not tax individual income – retirement or otherwise: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. Two other states – New Hampshire and Tennessee – impose income taxes only on dividends and interest (5 percent flat rate for both states)."
I wouldn't live in any of the above states, except for New Hampshire but I left New England to get away from the cold weather. Personally, I hate FL, except for a brief vacation in winter. The east coast makes my skin crawl. The more appealing areas of FL also have higher real estates prices, so in the end, you pay more in some whay.
Those are only the states that do not tax EITHER individual income or retirement income. There are many states that do not tax retirement income or only tax portions of it (even though they do tax regular income which generally isn't a concern for retirees). For example, on the east coast (didn't look at the rest of the country), the following states do not tax retirement income or only tax portions of it:
Delaware (401K and IRA not taxed up to $12.5K)
Florida (401k and IRA not taxed at all)
Georgia (401k and IRA not taxed up to $65K)
Kentucky (401k and IRA not taxed up to $41K)
Maryland (401K not taxed up to $29K)
New Jersey (401k and IRA not taxed up to $40K)
New York (401k and IRA not taxed up to $20K)
Pennsylvania (401K and IRA not taxed at all)
South Carolina (401K and IRA not taxed up to $30K)
Tennessee (401k and IRA not taxed at all)
West Virginia (401k and iRA not taxed up to $16K)
So, if in retirement, you will be living primarily off your 401K and will be withdrawing say $65K per year from it to live on, then you are paying about $3K in income taxes to the state of NC, not including federal taxes. Of course you don't want to look just at that metric alone because as you said, the state can get you in other ways. However, some states give much better breaks to seniors. There is a reason many retirees call Florida home, even if it's just for 6 months and 1 day.
North Carolina is not a tax-unfriendly state to retirees per se, but it's not particularly friendly to retirees either. You have to know where your income is coming from (public pension? 401k, etc.), how high it will be (does state give breaks below a certain threshold?), how large of a house you want (what will property taxes be?, any breaks for seniors?), etc. and then decide which state meets your needs best. Of course, if everything else about North Carolina appeals to you like weather, east coast, near beach, etc. you probably won't pick Wyoming over it. But you might pick South Carolina or Georgia, which have similar amenities but more favorable tax laws for retirees.
Here is Kiplinger's guide to retiree taxes in all 50 states. It is very informative. My husband and I are in the thick of retirement planning and have found this chart very useful (although I don't care much for the comparison tool which is a bit too simplified):
Those are only the states that do not tax EITHER individual income or retirement income. There are many states that do not tax retirement income like 401ks and IRAs (even though they do tax regular income which generally isn't a concern for retirees). For example, on the east coast (didn't look at the rest of the country), the following states do not tax retirement income or only tax portions of it:
I would hope that $5000 a year isn't the determining factor in where you choose to live out the rest of your life. The money isn't going with you!
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