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Only a few months away from 70 and still working full-time, I sometimes think about retiring in a few years, or longer, and maybe even relocating. A very major consideration costwise would be state income tax on retirement income, including Social Security. The situation varies dramitically, even for similar, adjacent states.

New Hampshire, for example, does not have an "income tax" on Social Security, pensions, 401k & 403b withdrawals, etc. Nearby Vermont, on the other hand taxes the same income as the Federal government, namely all of the above, at a rate that quickly reaches 8 %. I think that Maine also taxes retirement income, but don't know what the rate structure is.

As already pointed out, PA is retirement friendly, no state income tax on Social Security or pensions, 401K & 403b withdrawals. Adjacent NY taxes all of these at rate as high or higher than Vermont. I don't know about NJ, but would not be surprised to find it similar to NY.

Although these few examples focus on the Northeast, the bottom line is there is wide divergence in state income taxation of retirees, even in seemingly similar states. Not a trivial consideration in choosing a retirement location.

For someone in NJ, I add to the suggestion of crossing the Delaware as an option. There are many other reasons, in addtion to retiree income taxes.

The states in red don't have state income tax. The states in yellow have no regular income wage tax, but have dividend and interest income tax.



http://en.wikipedia.org/wiki/State_income_tax

The tax map only shows part of a picture of what must be considered. NH for instance does not have a sales tax either BUT we collect our money at the local level through a property tax. Even the smallest homes in my area are taxed $4000 to $5000 a year. The property tax does not go away and only goes up each year whether you are still working or retired.

Retirement is a "heavy" at any age. Especially if the work was satisfying. Retirement at any age is a psychological whammy.

I retired when I was 58, almost 14 years ago. I stayed put and didn't move for a long time - the guys who retire and move to Florida all die quickly. All the things the guys said earlier are true- it is a culture shock whenever you move and things aren't necessarily better overall. Some things may get better; others worse. And we haven't much time left for replays. The cold VT weather finally got to us.

We sometimes perseverate too much about minor problem we encounter where we live. Every place in the world has minor irritations. Thee are as many irritations here as there were there, only it ain't as cold.

Unless you're stretched very thin, the tax situation isn't that important - the move will consume a lot of the tax savings anyway. There are many considerations such as energy costs. We paid about 5 grand/year to heat our Vermont house and at that time the taxes were about 13K for the house and 4 acres. The quality of life was very high and invariably that comes with high expenses. Hunterdon county in NJ is still incredibly beautiful. The northeastern part of the state is garbage but one doesn't have to go there.

Seventy is a watershed year - the future is now and there ain't a lot of it left that's quality time.

Before burning your bridge, how about, in one year, going on two or three South Georgia quail hunts; Anticosti for deer; Ungava for caribou and some of the western states for pheasant. Grouse in Maine. You can work, if you want to, in between your hunting trips and you'll be hanging with like-minded people. Your support network at home stays in place and you'll still get all the hunting you can want. See if that works for you.

Of course, if your neighbors' political ideology is so offensive then moving is the only answer.

Try making a list- list the plusses on the left hand side of the page and the minuses on the right. Add to it as you think of things and after a week or so you'll have a pretty good comparison.

But be certain before you leap- you'll never get you old house back.

Some good points.

My dad retired at 59 after 30 years in skilled trades with the auto companies. He moved to Florida immediately and is now 86. Been retired from Ford for longer than he worked there and they still pay him to not work. He's part of a small minority still alive who was saved a trip to Honshu by Fat Man and Little Boy and did not contract a fatal disease working in industry.

He has zero regrets about retiring the very day he was eligible, and was able to travel a bit with my mom when she was still able.

Dad's philosophy is that every extra year you work, is a year you don't have in retirement.

Obviously this takes financial planning and a good knowledge of self.

I intend to follow suit, just as soon as possible. Florida has no state income tax, seniors get a break on property tax, and they seem to get along just fine. I'm not staying in Michigan just to pay tax for the privilige of shoveling snow.

Michigan just changed their tax laws with the apparent intent of driving seniors south. I'm happy to oblige.

Claybird

An absolutley lovely thread, thanks for starting it.

Not much more to add advise wise, but I was struck by how universal this topic is. Left, right-young, old- all offering sound advice in a polite, friendly manner. Where's the common ground? Right in front of us, just open your eyes, heart and mind. Enjoy your search, Claybird. The journey is the goal.

Interesting map Chuck! Ak was great, tax wise when I lived there, however, WA sure knows how to stick it to it's citizen's in many other ways, IMO and judging from what my Bro says, who lives in WA.

This is great stuff. An incredible amount of sage advice.

I am going to retire in four years from the Fed. I will be 56. Not going to retire, retire, just call it quits after serving Uncle Sam since age 18 as both Navy man and civilian.

Wife and I are giving serious consideration to southern Vermont. Biggest reason is to get away from the Northern Virginia sprawl, population growth, crime, traffic, etc.

I grew up in Upstate NY and lived in Maine for many years. Returning to the cold is a concern, as we are really spoiled by the mild Virginia weather. I just want to return to a simpler life, and if I want to go to the store or mall it is not a 45 minute+ bumper to bumper traffic ordeal. I will never, ever understand why people cannot drive a simple straight line point A to point B on I-95 or Route 1. It never fails, at any point of the day, some sort of screw-up. Either a wreck, or people slow down to a crawl to rubber-neck some guy changing a tire or watch a Trooper writing a ticket.

I want to just to work part-time, duck hunt, partridge hunt, fish, get re-introduced to coon hunting, hang out with the wife and follow our youngest son's baseball career. We figure Vermont will give us that peace and quiet, and is just across from Upstate NY to stay close with family and friends. I have thought of finding seclusion in other parts of Virginia, but I just miss the NE.

Kind regards,

Old Maine, think of cold as being part of being American. That's how I rationalize our winters: part of being Canadian. Anyone can live where it's warm.

King' I am a Canadian, who can be just as Canadian ...where its warm..Trust me on that...