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Old 08-17-2017, 07:52 AM
 
Location: Tennessee
23,601 posts, read 17,589,896 times
Reputation: 27682

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Quote:
Originally Posted by Escort Rider View Post
Unless you have lots of income in a state with high income taxes, the lack of same in places like Florida and Tennessee will likely be counter-balanced by other taxes and other factors, such as property taxes and homeowner insurance rates. There really is no free lunch.

For example, California has the highest marginal income tax rate in the nation at 13%. That sounds horrendous, but it only applies to that portion of income which exceeds one million dollars. For most of us (and most of us are NOT fat cats) the rates are much more reasonable.

I have never quite understood selecting a place to live based on taxes. It seems to me living in a place where you enjoy the climate and enjoy the other factors would trump all the quibbling about taxes. For example, you couldn't PAY me enough money to live in Florida. I would much rather live like I now live (fairly modestly) in California than have an income of $ one million a year and live in Florida. The decision wouldn't even be close.
TN doesn't have high property tax rates. Nashville/Davidson County are the highest (I think...) and are around 1% of the current market value of the home. That's not the actual formula - just a back of the napkin estimate.

Around here, the taxes are roughly .5%-.7% of the home's value, depending on whether you're in the county or city. Given that home prices around here are pretty low, many people have property taxes under $1,000 annually.

It costs $31.50 to register your car in the county I'm in now. I think annual tag renewal is something like $24. These are flat fees. When I was in Indiana, the first year it was $500, the second year was like $250, and the third year was $160. In Indiana, it was based on the value of the car. I drive a Hyundai Elantra. A couple with two nice, newer SUVs could easily be out $1,500 annually in just vehicle registration fees.

You do get hit hard on sales tax - 9.75%. Food is taxed at 5.5%. I think drugs are taxed at a discount. Yes, the sales tax rate is high, but many other places have rates in the 5%-7% range anyway.

Take a look at Illinois or New Jersey. A house with a property tax bill of $2,000 in Tennessee may have a property tax bill of $10,000 in those states. NJ's sales tax is almost 7% and IL's is right around ours. NJ and IL have income tax rates largely between 5%-6%.

This is a significant amount of tax savings, especially for someone on a fixed income. I save around $220/month by being in TN vs. IN, which is not a high tax state.

Not everything is cheaper here. This is a poor area, and the housing stock, crime, and lack of higher end amenities reflect that. Food is significantly more expensive than the Midwest. My car insurance went from $300 to $600 every six months. Overall, it's not much cheaper than Indianapolis, but if you're looking at taxes/fees only, it is a significant savings.
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Old 08-17-2017, 10:27 AM
 
14,261 posts, read 24,004,620 times
Reputation: 20084
Quote:
Originally Posted by Serious Conversation View Post
TN doesn't have high property tax rates. Nashville/Davidson County are the highest (I think...) and are around 1% of the current market value of the home. That's not the actual formula - just a back of the napkin estimate.

Around here, the taxes are roughly .5%-.7% of the home's value, depending on whether you're in the county or city. Given that home prices around here are pretty low, many people have property taxes under $1,000 annually.

****

You do get hit hard on sales tax - 9.75%. Food is taxed at 5.5%. I think drugs are taxed at a discount. Yes, the sales tax rate is high, but many other places have rates in the 5%-7% range anyway.

Take a look at Illinois or New Jersey. A house with a property tax bill of $2,000 in Tennessee may have a property tax bill of $10,000 in those states. NJ's sales tax is almost 7% and IL's is right around ours. NJ and IL have income tax rates largely between 5%-6%.


While Tennessee has a lower property tax rates, the property taxes in Davidson Co. and the counties surrounding Nashville are 2-2.5x higher than the counties in E. Tennessee. The houses that I looked at south of Nashville had tax bills that were about 75% of what I was paying for a similar house in the Chicago suburbs.

You talk about Illinois like it is a monolithic state. The property tax rates in Nashville are HIGHER than those in Central and Southern Illinois.

If I was looking for a low tax state as my sole criteria, I would pay lower taxes relocating to Kentucky than Tennessee. And it is very likely that I am paying lower taxes overall in Arizona than I would in Tennessee.
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Old 08-17-2017, 04:54 PM
 
Location: Eastern Washington
14,245 posts, read 44,937,745 times
Reputation: 12851
Quote:
Originally Posted by macyny View Post
I live in Florida. Not sure about low sales tax. We pay almost 7%. There is no State tax but property taxes cost us about $2,400 a year. We live about 6 miles from the water so we don't have to pay flood insurance.

We lived in Westchester, NY for over 40 yrs and paid $24,000 a year in property taxes. So, to us, Florida is a bargain.
That is beyond nuts. That would eat up half my pension if I retired at 60 to 63 approx.
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Old 08-17-2017, 05:04 PM
 
Location: Forests of Maine
30,687 posts, read 49,469,539 times
Reputation: 19134
Quote:
Originally Posted by M3 Mitch View Post
That is beyond nuts. That would eat up half my pension if I retired at 60 to 63 approx.
It far exceeds my pension.
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Old 08-19-2017, 03:32 PM
 
Location: Connecticut
26,348 posts, read 42,320,780 times
Reputation: 7834
Do people really decide where they are going to spend their lives based on where they can save a few pennies? While I understand the desire to move from a high cost area to a low cost one or from a cold weather area but this where you will likely be spending your final years. Shouldn't you base this on which area you like better? A few pennies is a small price to pay for happiness especially in your later years. Jay
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Old 08-20-2017, 10:57 AM
 
1,325 posts, read 650,208 times
Reputation: 4269
Quote:
Originally Posted by JayCT View Post
Do people really decide where they are going to spend their lives based on where they can save a few pennies? While I understand the desire to move from a high cost area to a low cost one or from a cold weather area but this where you will likely be spending your final years. Shouldn't you base this on which area you like better? A few pennies is a small price to pay for happiness especially in your later years. Jay
Hi Jay, I am the OP. Believe me we are not going to decide on where to retire based on saving a few pennies. We are doing our homework so we make the right decision the first time. We like a lot of things about Florida, and we like a lot of things about South Carolina. Just making a list of pros and cons in both states
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Old 08-20-2017, 04:52 PM
 
1,932 posts, read 4,614,065 times
Reputation: 1366
Quote:
Originally Posted by crusinsusan View Post
Well, property taxes need to be looked at, and that's on a county to county basis.

I lived in a high property tax county in Florida, also one block from the beach, and moved to western NC. I compared homeowners insurance, flood insurance, property taxes, and lawn care in Fl, to homeowners, income tax, property tax, and HOA in NC and I save over $2k a year in NC.

I believe NC takes $8k off your income if you're a senior, but I haven't looked closely at it because I'm not there yet. I haven't looked at sales tax because I'm not a big spender.

I will also add that I my car insurance in FL was cheap and covered practically nothing as the basic state minimum. In NC my car insurance is also cheap and is full coverage. I should say that I am a preferred driver and use the car only for "pleasure" as they say, so about 5K miles a year. But that was in both states.

Plus, my utilities are way lower too, since it's a more moderate climate.
I'm also looking at NC for retirement, and I haven't seen anything in the income taxes about an $8k write off on NC income taxes for seniors.

NC has a 5.499% flat income tax, and local, county and state sales taxes can add up to 7% in some areas of the state. Groceries (all basics like milk, fruit, veg, and bread) are taxed at 2%.

NC reinstated the medical expenses deduction in 2015, after eliminating it in 2014.

And in 2013, seniors lost a $2,000 deduction for retirement income.

Car taxes can be significant in NC. For example, for an older 9 year old Honda sedan, the annual property tax is around $100 if the value (determined by the DMV) is $7,000. Edmunds says it's worth $4-5,000.

But if you drive a newer car valued at $25,000, the annual property tax would be $300. It varies based on what part of the state you live in, and these numbers are for Asheville in Buncombe County.

An initial 3% Use Tax (up to $250) is levied on cars to all new residents of NC, based on the NC DMV value, not Edmunds, for cars owned more than 90 days outside the state.

I calculated my total expenses for bringing in a 9 year old Honda sedan to NC to be over $500 (including Use Tax, property tax, title, registration, plates, various misc fees and driver's license).

I'm glad to hear your expenses have gone down in the move from FL to NC, but it may be different for other retirees depending on what part of the state (FL) one comes from and where one lives in the new state (NC), and whether you own or rent a home.

I definitely agree that the more moderate climate is a plus in NC, and it's a beautiful state. I haven't made a decision yet about NC, but if you read some of the threads on the NC forum, some retirees have found NC to be more expensive than where they lived previously (AZ, for example). Everyone's situation will be different.
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Old 08-20-2017, 04:56 PM
 
1,932 posts, read 4,614,065 times
Reputation: 1366
Quote:
Originally Posted by JayCT View Post
Do people really decide where they are going to spend their lives based on where they can save a few pennies? While I understand the desire to move from a high cost area to a low cost one or from a cold weather area but this where you will likely be spending your final years. Shouldn't you base this on which area you like better? A few pennies is a small price to pay for happiness especially in your later years. Jay
A few pennies? No.

Agree that the decision should be primarily about an area you like better than where you are, but overall financial factors are definitely part of the equation. And in some cases, it's far more than a few pennies.

Everything is a trade-off and a retirement move doesn't have to be forever. Many people try one state for retirement and move again if they don't like it. It's a hassle, but all part of the retirement puzzle.

I personally wouldn't move just for financial reasons, but I am certainly crunching the numbers on various options I am looking at.
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Old 08-20-2017, 05:37 PM
 
8,204 posts, read 11,921,160 times
Reputation: 18020
Quote:
Originally Posted by JayCT View Post
Do people really decide where they are going to spend their lives based on where they can save a few pennies?
Of course not; don't be ridiculous. Taxes are just one of a myriad of factors that people consider when deciding where to retire.
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Old 08-20-2017, 05:45 PM
 
8,204 posts, read 11,921,160 times
Reputation: 18020
Quote:
Originally Posted by Beach Sportsfan View Post
First off I currently live in Florida.
Pros- no state tax, beaches, no snow
Cons- heat, insurance costs, traffic

The east coast if you are by the water is cooler than inland. Miami Beach in summer is cooler than Orlando and Gainesville which are central and northern.
You haven't been reading this forum much, have you? Don't you know that according to 99% of the posters here, all of Florida has the same climate? It doesn't matter if you are in Key West, Miami, Orlando, Sarasota, Gainesville, Jacksonville, or Pensacola, Florida is Florida. All you have to say is Florida is too hot and humid and that pertains to all 65,000 square miles of the state!


Quote:
Originally Posted by Beach Sportsfan View Post
SC can be very hot in summer even hotter than the Florida coast. I have spent time around Clemson area in summer and it was worse than I have ever experienced in Miami Beach.
Don't be lying to these people! Florida is hot and humid, much worse than anywhere else in the south or on the east coast! It doesn't matter where in Florida you are. Florida is Florida!!
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