DE not listed among Kiplinger's TOP 10 for taxes (Seaford, New Castle: insurance, custom home)

[rdlr]

Originally Posted by rothbear

Here in DE we live in a house worth over twice the one in PA (although a lot less land) and our taxes including trash, etc. are about $1600, but this April will be 3 years so it should be going down some. I do note that the retirement income not taxed is higher in PA than DE, but we are at a level that what is exempt here should be enough for us.

Most of the states in the listed 10 are NOT places that I would like to live in retirement! We made the right choice the second time around.

You made a wise choice. Glad you're happy here!

[rdlr]

Originally Posted by skeddy

ps....Pennsylvania has the highest state gas tax in the country don't they?

We were up there last week, and gas was HIGH! No wonder our daughter living in PA bought an electric car !

[Pocopsonite]

Originally Posted by Pine to Vine

You may think this is true, but it’s not. Delaware taxes all retirement income (except for SS) above $12,500. This means that after you collect a total of $12,500 in pensions, 401(k) distributions, and IRA distributions, Delaware collects taxes. When retirees collect more than $60K in combined benefits, these funds are taxed at 6.6%. Income between $12,500 and $60,000 is taxed at graduated rates between 2.2 and 5.55%. You should look at your last year’s Delaware returns.

“As a resident of Delaware, the amount of your pension and 401K income that is taxable for federal purposes is also taxable in Delaware. However, person's 60 years of age or older are entitled to a pension exclusion of up to $12,500 or the amount of the pension and eligible retirement income (whichever is less).

The combined total of pension and eligible retirement income may not exceed $12,500 per person age 60 or over. If you are under age 60 and receiving a pension, the exclusion amount is limited to $2,000.”
https://revenue.delaware.gov/information/faqs_pit.shtml

None of this is taxed in PA, whether you are collecting $10,000 or $1,000,000. Not pensions. Not IRA distributions. Not 401(k) distributions. Not Social Security. All tax free in PA.

Lower real estate taxes may balance out the difference for some, but most retirees with higher portfolios will find PA is easily the more affordable when it comes to taxes. Someone with fewer assets, however, would most likely benefit more in Delaware unless they are renting.

Absolutely right, and too often overlooked. That's why we still live in PA.

We thought about the Delaware beaches. We've owned property in Dewey Beach since 1976, and we might actually have moved there if the traffic had not gotten so terrible in the past 15 years.

But now, the traffic is worse than in our area of Chester County. And we pay much less in PA income tax, compared to what the tax would be in DE. The higher real estate tax in PA is more than offset by the lower income tax.

We're dealing with RMDs now, and with PA's NO TAX policy on retirement income -- including Social Security, defined benefit pension plan, and IRA withdrawals -- we are paying far less than we would be if we lived in Delaware.

Our Dewey Beach condo would sell for about 2X what our primary residence in PA is worth. The PA property tax is 8X the DE condo tax. Even so, it is much cheaper for us to stay in PA, pay the real estate tax, and have our retirement income state tax-free.

Plus, as you point out, Pine to Vine, most of what we buy these days is exempt from sales tax in PA. So we have mostly "tax-free shopping" without even driving 20 minutes to Delaware.

Real estate tax is far from the only consideration when making the decision about which state to choose for retirement. And since situations vary widely, every person needs to research and make their own analysis based on their best projections for their retirement situation.

[soulsurv]

For me the RE tax would be about a 4K a year difference. I have a small IRA distribution (about 6K a year) and will take SS at 62 (about a year away). Haven't calculated that yet, but I never had any high-paying jobs (mostly in education and the human service industries). I'll have to crunch the numbers.

Now the only thing that leaves me in doubt RE: Life in DE, is the purported overcrowding and traffic.

[NYC refugee]

The traffic and overcrowding happen upstate and at the beach. I'm inland south and there's not much traffic at any time of the year.

[Pine to Vine]

Originally Posted by soulsurv

For me the RE tax would be about a 4K a year difference. I have a small IRA distribution (about 6K a year) and will take SS at 62 (about a year away). Haven't calculated that yet, but I never had any high-paying jobs (mostly in education and the human service industries). I'll have to crunch the numbers.

Now the only thing that leaves me in doubt RE: Life in DE, is the purported overcrowding and traffic.

People tend to focus obsessively over taxes while overlooking some other significant costs. Those who focus solely on the taxes may miss the forest by only seeing the trees. Consider property insurance (e.g., an older wood frame house might be more expensive to insure than a new brick house? or the opposite?). Look at auto insurance, groceries, utilities, entertainment, etc.

The tip is to itemize where your money goes now, and research what it will cost you in a new locale. Take gasoline as one example: We often drive just 16 miles a week to volunteer so we sometimes go a month without purchasing gas. Otherwise, we walk to nearly everyplace we need or want to go in the city. When my dad asks what gasoline costs in Philly, I tell him I forget. You may be in the road all the time, however, so gasoline is a major consideration for you.

Best of luck. I know you’ve been pondering this for some time.

[soulsurv]

[QUOTE
Best of luck. I know you’ve been pondering this for some time.[/quote]

Indeed I have. Made an ENORMOUS mistake in 2016 by coming back to this horrible pocket of SE PA (due to financial reasons). I am no longer in Kennett which was wonderful but financially unsustainable. I am experiencing a type of "stage fright" now - an absolute terror of making another mistake. Moving was really tough as I had no help (and three dogs) at the time. I really need to make certain I can stay put this time. Not getting any younger...

THANKS SO MUCH FOR ALL YOUR HELP XO

[Marie Joseph]

Originally Posted by rdlr

We were up there last week, and gas was HIGH! No wonder our daughter living in PA bought an electric car !

I moved to PA in July 2015 and live in a low COL area of the state as you can see by my location

The exception to this low COL is the gasoline. If you plan on moving here or buying gas here while visiting, it's going to be wicked expensive. Even my parents in NY state pay less for gas and you know that is pretty sad when someone in NY of all places pays less for something than you do, lol.

We paid $2.84 a gallon yesterday to fill up the car. Not surprisingly, you don't see a lot of huge vehicles here

I like living here; I don't like the cost of gas though.

There are going to be good and negative points of anywhere that you can live. It's finding the place where you can have the positives overwhelm the negatives I love living here and the cost of gas is a minor annoyance compared with everything else I enjoy about it so I don't mind.

Delaware also has its selling points. It's just a matter of what you prefer and what fits in with your budget. Both states have high COL areas and lower COL areas.

[retiree2011]

Originally Posted by soulsurv

[QUOTE
Best of luck. I know you’ve been pondering this for some time.

Indeed I have. Made an ENORMOUS mistake in 2016 by coming back to this horrible pocket of SE PA (due to financial reasons). I am no longer in Kennett which was wonderful but financially unsustainable. I am experiencing a type of "stage fright" now - an absolute terror of making another mistake. Moving was really tough as I had no help (and three dogs) at the time. I really need to make certain I can stay put this time. Not getting any younger...

THANKS SO MUCH FOR ALL YOUR HELP XO[/quote]


Good luck! I moved last year, with no help. Packed everything, loaded it in a van, and drove to my new place. Took 3 trips to do it all; had to donate a lot of items just not worth taking. I was 71 years old, but luckily in good health. Sometimes I look around at my new place with so many of my familiar possessions and can't believe I did it - so you will be able to, also. Just find the right place to go and that will be your motivation to get it done. It's not easy, but so worth it.

[sunglo1]

Nice places to check out in SD: I'm in MD and the only issue I see in DE is the income tax rate is high. 6.6% on 60 grand and above. In MD you would only pay 5.75% on 250 grand and above, but the property taxes are higher here.


Wagamon's West Shores - Lee Ann Group

Pemberton Delaware Custom Homes - Capstone Homes

https://www.activeadultsdelaware.com.../paynters-mill