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Here is a a state tax calculator that many ought to pay attention to when transplanting. It shows the effective tax rate by income which can vary considerably from state to state. Some states have very progressive tax schedules that favor the low income over the very affluent. On the other hands some states when compared to others tax average income more compared to to other states and the wealthy less. What is good for one in state X might not be great for another person in that state. It is a calculator worthy of being in the tool box for some contemplating transplanting. It is a very nice picture display that lays all all out in one screen.
Some time ago someone asked me about NC tax reform and how it was playing out. For us our taxes went down even with income going up.
I think that someone was me. I had seen the write up on it and was considering Raleigh Durham or Charlotte areas. I kind of thought that would be the case for you. What I don't want to see is that my income in retirement here in MA is tax exempt where it would not be in NC. It isn't off the list as I know that we should not let the tax tail wag the dog.
some of the nice assumptions fidelity makes and why i like them better then firecalc is they figure a realistic 7% on healthcare costs , 5.50% on long term care .
The tool uses a default inflation rate based on the historical,average inflation rate and the forward-looking Fed target inflation rate. This rate is reviewed annually. If you anticipate a different rate of inflation in the future, you can specify an alternative rate
I think that someone was me. I had seen the write up on it and was considering Raleigh Durham or Charlotte areas. I kind of thought that would be the case for you. What I don't want to see is that my income in retirement here in MA is tax exempt where it would not be in NC. It isn't off the list as I know that we should not let the tax tail wag the dog.
NC is not as pension or SS friendly, however it can as in our case compensate for the better. I gave been doing some income percentile rank research lately. Breaking it down by age, state and ethnicity is very interesting. It also gives insight to tax burden breakdowns.
Of course,nits the total tax burden by state thats important, not just income tax. And what is not quantified in th article are the senior exemptions and reductions. Some states like Georgia, exept $60k in income once you are 65. Things like that are extremely difficult to cross correlate with any effectiveness because property taxes can be hughly different county to county, etc.
I think that someone was me. I had seen the write up on it and was considering Raleigh Durham or Charlotte areas. I kind of thought that would be the case for you. What I don't want to see is that my income in retirement here in MA is tax exempt where it would not be in NC. It isn't off the list as I know that we should not let the tax tail wag the dog.
Especially not the state tax IMO. I am not retired yet but have been a high earner in NC for several years. The rate is currently a flat 5.75% of AGI. If that is enough of a hit to make you look elsewhere even if the area appeals to you and you are pretty sure you would be happy here then either you are skating on thin ice budget wise or you just think differently than me.
The revised tax rate was lowered as mentioned and all out of state pension income taxed etc etc etc. Deductions were eliminated and the standard deduction increased. Depending on your variables your taxes could go up or down. For higher income earners they tended to go down and for lower income earners they tended to go up. The link I posted shows how the median income is taxed (effective tax rate) state by state and the effective tax rate for the top 1% is taxed state by state. Interesting. Over a certain income point the difference in effective tax rates is not going to be a game breaker. For lower income earners perhaps. Again I doubt if many high earners are going to move to NC just to save a few hundred in taxes. Again my perspective is eight plus years after retiring and transplanting. If I was still in the planning stage might I react? Doubt it.
I had this very kind of discussion with some friends. Personally, I don't and never did obsess about how much I had saved for retirement. Its quite possible to live a safe retirement in basic housing for a remarkably small amount of money. All you have to do is not have a big ego and be willing to move to more humble housing. I'd rather do that than spend years worrying about if I'll have enough to retire. Lots of folks get by on SS alone.
Especially not the state tax IMO. I am not retired yet but have been a high earner in NC for several years. The rate is currently a flat 5.75% of AGI. If that is enough of a hit to make you look elsewhere even if the area appeals to you and you are pretty sure you would be happy here then either you are skating on thin ice budget wise or you just think differently than me.
The biggest tax difference is going to be the county you live in and their property tax rate and the valuations of houses in adjoining counties.
For me the most important retirement planning tool is the one between your ears.
You need to understand the impact of all the assumptions that are used by the tools. Your guesses are probably as good as anyone else. In addition you need to understand that eventually you are going to have to live these assumptions.
The best of these tools are ones that use a Monte Carlo simulation - where there is not only one answer! These tools have their place but they don't replace a lot of careful thinking.
I had this very kind of discussion with some friends. Personally, I don't and never did obsess about how much I had saved for retirement. Its quite possible to live a safe retirement in basic housing for a remarkably small amount of money. All you have to do is not have a big ego and be willing to move to more humble housing. I'd rather do that than spend years worrying about if I'll have enough to retire. Lots of folks get by on SS alone.
but you need to know your capability's as far as safely generating an income no matter how frugally you live . just like the construction of that house to stand up to the areas winds that is why we have building standards . no can can predict what is going to happen next but you certainly can withstand what failed in the past
Last edited by mathjak107; 04-17-2016 at 03:16 AM..
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