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Old 03-16-2015, 08:45 PM
 
Location: Sierra Nevada Land, CA
8,393 posts, read 9,139,362 times
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As a side note, taxes are a third or tenth factor I would consider when choosing where to spend the rest of my life.

We plan to retire where we live. In Eastern CA. We are not rich. We are OK. Life is good here. We have connections and this area is SO right for us. So what if we have to pay $1000 or $3000 more in yearly taxes as compared to some other states. We'd rather be happy living where we do as opposed to saving money. Life is too short to worry about saving $150-$200 a month.

But this is us. Your mileage may vary (YMMV).
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Old 03-16-2015, 08:58 PM
 
Location: Los Angeles area
14,018 posts, read 17,732,288 times
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Quote:
Originally Posted by Mr5150 View Post
As a side note, taxes are a third or tenth factor I would consider when choosing where to spend the rest of my life.

We plan to retire where we live. In Eastern CA. We are not rich. We are OK. Life is good here. We have connections and this area is SO right for us. So what if we have to pay $1000 or $3000 more in yearly taxes as compared to some other states. We'd rather be happy living where we do as opposed to saving money. Life is too short to worry about saving $150-$200 a month.

But this is us. Your mileage may vary (YMMV).
Actually I agree with you completely. My original post, if you look at it in a certain light, validates your point; my taxes, while not negligible, are not killing me either. That was part of my message, although I did not state it directly - even in a high-tax state I am only paying a certain amount more in taxes than someone in a low-tax state, especially inasmuch as the federal income tax is going to be the same for all us no matter where we live.

My main motivation in starting this thread was to put some actual numbers to a total tax burden. So often people either talk about taxes in such general terms as to be meaningless, or they cite one particular amount, as in "My property tax is X dollars a year" without putting that amount into any broader context.
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Old 03-16-2015, 10:17 PM
 
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For persons with strong roots, such as family connections, relocation for financial purposes is impractical. This, I think, is understood. Likewise for those with acute medical needs, who need to be near superb medical facilities, with costs being a secondary factor. The real discussion here is for hypothetical rootless, healthy people - who would relocate (or remain in their present locale) based on dispassionate, ruthless calculations. With that preamble, it seems to me that most retirees or near-retirees fall into one of three categories:

1. Those of modest means, and modest expenses. Taxes are far from the main expense, and all sorts of other financial and non-financial things matter more.

2. Those of substantial means, and profligate living. Taxes are hardly the main consideration here either.

3. Those of substantial means, but modest expenses. These are the poster-children for mutual-fund companies and financial-advice celebrities.

I'll give an example. An acquaintance of mine, with whom I regularly converse at our gym, is a retired military officer. He draws a generous pension. He's also been a private-sector employee for decades. He's in his 70s, but keeps working. He and his wife seriously hit the stock-market jackpot in the late 1960s, with stock-options in an insurance company based in our semi-local "major" city. His net worth? Let's just say that he does alright. But this guy brings a bag-lunch every day. His wife cuts his hair. He drives a 1990s Honda. And his sweat-pants have holes. For him, taxes completely overwhelm all other expenses put together. And those 401K plan RMDs? Taxed as regular income? Ouch! Suffice it to say that this guy isn't moving to California.
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Old 03-17-2015, 02:38 AM
 
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Quote:
Originally Posted by Escort Rider View Post
Good points. California, like most states, does not tax Social Security. It is one of the few saving graces in this high-tax state, the other one being our property taxes.
same here in ny , they do not tax ss or the first 20k of private pensions or local gov't pensions at all.
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Old 03-17-2015, 06:06 AM
 
8,191 posts, read 11,908,623 times
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Quote:
Originally Posted by Escort Rider View Post
There has been voluminous discussion about taxes in the Retirement Forum, especially with regard to comparing tax burdens among different states.

Property taxes $2,846
Quote:
Originally Posted by Escort Rider View Post
...So often people either talk about taxes in such general terms as to be meaningless, or they cite one particular amount, as in "My property tax is X dollars a year" without putting that amount into any broader context.
In order to put that into a broader context and make it meaningful for someone considering moving to California, tell us what the approximate property taxes would be on your townhouse for someone purchasing it today. I would assume that it would be quite a bit more than $2,846.


Quote:
Originally Posted by mathjak107 View Post
same here in ny , they do not tax ss or the first 20k of private pensions or local gov't pensions at all.
Federal employee government pensions also are not taxed. Since NY doesn't tax local government pensions, they are prohibited from taxing federal pensions as well.
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Old 03-17-2015, 06:16 AM
 
Location: Los Angeles area
14,018 posts, read 17,732,288 times
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Quote:
Originally Posted by MadManofBethesda View Post
In order to put that into a broader context and make it meaningful for someone considering moving to California, tell us what the approximate property taxes would be on your townhouse for someone purchasing it today. I would assume that it would be quite a bit more than $2,846.
I can't answer the question with any precision because I don't know how the property taxes are calculated on new purchases. I would have to look that up. But yes, it would be quite a bit more, but (based on my purchase price compared to the current value and assuming that the property tax would be proportional to that - not even sure that is true) less than twice as much.
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Old 03-17-2015, 08:52 AM
 
Location: Idaho
1,452 posts, read 1,153,939 times
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Quote:
Originally Posted by ohio_peasant View Post
But this guy brings a bag-lunch every day. His wife cuts his hair. He drives a 1990s Honda. And his sweat-pants have holes.
Ha ha! You are describing us. We have been brownbagging all our working life & I have been cutting my husband hair ever since the time we started dating seriously. In all those years, he only went to a barber shop twice (before the wedding & while I stayed behind at the university finishing up my thesis). We drove our 1990s Honda literally to the ground (got 260K miles on it and had to sell it because it had a gasoline leak which would have cost more than its value to fix). Oh yes, quite a few of our sweat-pants have holes too - we only wear them at home though ;-).

We are frugal and can be called 'cheap' in some ways, but some folks think we are 'spend thrift' in seeing us owning a plane and traveling extensively!!! We just want to get the best 'ROI' by spending our money as wisely as we can on the things important to us & would not care less about other people's opinions.

COL and taxes are not the most important thing on our relocation search list (proximity to our daughter and climate are the two top items). There are no reasons for not trying to save on the taxes so that we can spend the money on our hobbies and interests.
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Old 03-17-2015, 09:01 AM
 
Location: Sierra Nevada Land, CA
8,393 posts, read 9,139,362 times
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Quote:
Originally Posted by MadManofBethesda View Post
In order to put that into a broader context and make it meaningful for someone considering moving to California, tell us what the approximate property taxes would be on your townhouse for someone purchasing it today. I would assume that it would be quite a bit more than $2,846.




.
For the purpose of this response, consider that there are two Californias. One is the urban parts. Greater LA, San Diego and the San Francisco Bay Area along with Monterey. These areas cover less than 3% of the state. These are the areas that are expensive and average home prices run form $400K to $800K. Fact is, few people are not going to retire and move to the rat race* (Monterey excluded). Once you get away from the above mentioned areas, the cost of housing drops quite a bit. Is CA housing expensive? For the most part; no.

I live in one of the areas of CA that retirees flock to. The Gold Country, quite desirable in terms of lifestyle. Low crime, no traffic, clean air and good hospitals. in my area the median home price is about $210K. Property taxes for new purchases would be about $2100 (plus or minus) per year, depending on local assessments.



*The OP lives in LA and has retired in place. Good choice!
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Old 03-17-2015, 10:23 AM
 
Location: SW MO
23,605 posts, read 31,475,774 times
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Quote:
Originally Posted by Escort Rider View Post
Good points. California, like most states, does not tax Social Security. It is one of the few saving graces in this high-tax state, the other one being our property taxes.
But ER, property taxes are really relative. Our home on the shore of a large lake here would cost us at least $250-350K more in CA and that could be low. As it is, while your Prop 13 tax rate is low, our property taxes ring-in at under $800 a year. Our Soc. Scty. is not taxed, nor are our government pensions so in the end we pay no income tax to the state. Car "tax" runs just under $150 a year.
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Old 03-17-2015, 05:06 PM
 
71,515 posts, read 71,694,121 times
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Quote:
Originally Posted by MadManofBethesda View Post
In order to put that into a broader context and make it meaningful for someone considering moving to California, tell us what the approximate property taxes would be on your townhouse for someone purchasing it today. I would assume that it would be quite a bit more than $2,846.




Federal employee government pensions also are not taxed. Since NY doesn't tax local government pensions, they are prohibited from taxing federal pensions as well.
actually ny does not tax the first 20k even in private pensions or out of state pensions. ny local ,state and federal pensions have no limit and are not taxed. .

one of the nicer things ny does for us as they stick their hand in our pockets.
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