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Currently living in Tehachapi, CA. Love it here, but gas prices and taxes are looming. I have one more year to work until 66 and my husband has four more years to work.
Two of my 3 children live in Florida, where the tax benefits are much better than California. As far as weather, we love it here.
I am trying to determine if a small second residence in Florida will pay off as opposed to living out retirement in California. We both have 401k, but no pensions. We have friends that moved full-time to Florida, then decided to come back to California. They can no way afford the house or middle-income lifestyle as they once had.
Anyone in retirement purchase a condo/small house to take advantage of the tax benefits of Florida?
We winter in Florida but live in MA.
We own a small house there.
I refuse to move there officially to take advantage of the tax benefits for a number of reasons - some selfish and other altruistic.
Firstly, our state has vastly better health care. I'm talking the difference between being looked at as a dollar sign....or as a patient. I do not want to get sick and/or pass away in Florida.
Secondly, in a sense I feel I owe MA. my taxes. They have provided me with RomneyCare (sure, I pay big premiums, but still) for many years and my daughter also has had 100's of thousands in operations for a very low cost. If all of us "game" the system....well, that's the cause of the problems we see today.
On a more informal note, I have lots of poor and middle class friends that live in CA. Housing is, of course, the biggest problem....but many of them have housing from long ago. If that is the case, then the availability of mountains, beaches, culture and weather beat Florida by a mile!
Imagine a hot humid swamp over-developed area with no hills or mountains and 6+ months of heat that almost requires full time A/C.
I love spending 3-4 months at our winter place - but, again, I wouldn't want to live there. I'm certain everyone doesn't feel the same way, but those from CA. are often accustomed to some amazing weather, topography and other wonders...
Lastly, the cost of living in Florida is likely to go up and up with insurance and property taxes and other fees. The Goose that laid the Golden Egg (development) is running out of space and causing pollution of various bodies of water, traffic, etc.
I think if you really did a spreadsheet on it and figured all costs, travel, quality of life, etc....you might stay in CA.
It's a long flight.....
Not to insinuate anything about the OP (of whom, as GeoffD pointed out, we know precious little), but the numbers change for higher net-worth individuals.
OP had a $50M taxable portfolio? That's a $60K/year savings in moving to Florida... which covers a mortgage on a fine luxury property in Miami or wherever else.
?
FYI, just the condo fees and taxes on a "mid level decent" condo in Miami Beach or north of there are about 40K. Take the cost of something decent at 800K (mid-level decent)...with 100K down and the mortgage and insurance and utilities and maintenance are going to add up to another 60K....
So we are talking 100K per year for a middling "lux" property.
Well I'll tell you that retiring in NJ shouldn't be anyone's choice lol.
Never lived in Florida but visit there yearly. Florida is hot, very hot and humid more of the time that it isn't. So take that into consideration versus the CA climate
Yep. My DH worked for FTB for 34 years. They have programs that scan the databases of other state agencies and local agencies and look for discrepancies, things like property taxes paid to a locality with no matching state income tax form. They look for things like car registrations, large bank deposits or withdrawals, voter registration forms, etc. If they can find a way to make you a resident and tax you, they will. And they charge penalties and interest on any taxes that they declare to be unpaid. It is often cheaper to just pay the tax then fight them in court.
After 5 years out of state, we finally sold our rental there and are looking forward to this being the last year we have to file CA income tax. Last year was the last straw when we were told we would have to maintain a business license, and pay annual license and inspection fees, to own a rental SFH there. We said enough and sold the property via 1031 exchange. No more CA taxes, fees, regulations, or BS for us.
A good synopsis of why I won't fool with CA at all. They can take their politics and "shove it"!
The only taxes you'll save with a FL residence are income taxes. How much tax does a retired married couple in CA pay on 4k a month 401k withdrawals plus social security? About $1,500 a year.
I think a factor bigger than the expense is the risk. Why would anybody live among earthquakes, mud slides forest fires, drought and crime when you could live in the state that has none of that stuff and is certified by the FBI as the safest state? That would be Maine. Sure, we have all four real seasons, but that is part of the charm and beauty.
The only taxes you'll save with a FL residence are income taxes. How much tax does a retired married couple in CA pay on 4k a month 401k withdrawals plus social security? About $1,500 a year.
I made that point up-thread. It also makes contemplating Roth conversions less attractive.
I think a factor bigger than the expense is the risk. Why would anybody live among earthquakes, mud slides forest fires, drought and crime when you could live in the state that has none of that stuff and is certified by the FBI as the safest state? That would be Maine. Sure, we have all four real seasons, but that is part of the charm and beauty.
You failed to address the black fly issue. Winged piranhas.
The only taxes you'll save with a FL residence are income taxes. How much tax does a retired married couple in CA pay on 4k a month 401k withdrawals plus social security? About $1,500 a year.
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