Here’s What You Need to Know To Retire Well in Louisiana
Choosing a retirement destination can be challenging. Every state (and city) brings something different to the table. That alone makes choosing difficult. Plus, where you decide to retire impacts your quality of life and also plays a role in how long your retirement savings will last. That’s why it’s paramount to select the right option. If you are considering heading to Louisiana for retirement. Then you need to make sure it’s a great fit. Here’s a look at what it takes to retire well in Louisiana.
Cost of Living
Before you choose a place to retire. It’s smart to take a look at a state’s cost of living scores. These metrics give you close about an area’s affordability in comparison to the national average, which is always set at 100.
When a state has scores below 100, it means the area costs less than the national average. That’s a general mark of affordability and could be critical for retirees with limited savings.
On the other side of the equation are scores above 100. Those mean that a state costs more than the national average. In those cases, retirees with tight budgets may experience financial hardships or may not be able to spend money on as many wants because more of their savings is covering their needs.
Louisiana has an overall cost of living score of 93.4, meaning it is less expensive than the national average. Additionally, none of its category scores are above 100 either, so it costs less across the board.
Groceries score at 97.7, while utilities and transportation come out at 87.5 and 96.3, respectively. The healthcare score is 97.9, while housing is a low 86.8.
A lower housing score doesn’t necessarily mean you’re sacrificing quality. Instead, it means that if there were two carbon-copy properties, one in Louisiana and one in another state with a higher housing score, the one in the Pelican State would just cost less.
Overall, Louisiana’s median home value comes in at $176,987. That’s $82,919 less than the national average, which sits at $259,906.
Before you settle on a place to retire, you also want to take a look at any tax implications of your chosen destination. How much you have to pay in taxes impacts your quality of life. The more you have to pay in taxes, the less you’ll have to cover your needs and wants. That’s a big deal for all retirees, particularly those with tighter budgets.
Louisiana does have a state income tax. It uses a bracketed system. Depending on your income level, your tax rate may be 2 to 6 percent.
Now, there are a variety of exemptions that benefit retirees. Social Security benefits that are taxed at the federal level, as well as federal retirement, including military retirement, are exempt. Similarly, so are many Louisiana state and city employee retirement disbursements.
Plus, all retirees age 65 or older can exclude up to $6,000 in retirement income, regardless of its source. However, all other 401(k), IRA, and similar retirement disbursements are generally taxable.
Louisiana also has a sales tax. The state sales tax rate is 4.45 percent. However, municipalities can add on to that amount. For example, New Orleans charges an additional 5 percent, bringing that city’s total sales tax rate to 9.45 percent.
As for Louisiana property taxes, there are a few programs that can help reduce the burden for retirees. Along with the Homestead Exemption, which can reduce a home’s assessed value (for tax purposes) by $7,500 to $15,000, depending on the parish and whether you’re a disabled veteran, there’s also a special assessment for individuals age 65 and older who have an income level below a certain threshold.
With the special assessment, you can freeze the assessed value of the home for tax purposes, essentially locking a major property tax factor in place. That can keep your property taxes fairly stable, which is a bonus.
Part-Time Job Opportunities
Generally speaking, part-time job opportunities are usually reasonably available in Louisiana. While the state’s unemployment rate is historically above the national average more often than not, it isn’t typically so high as to prevent retirees from finding some opportunities as long as they are in or near a decent-sized city.
However, COVID-19 has altered the landscape a bit. During the height of the pandemic’s initial onset in April 2020, unemployment reached 15.1 percent in the Pelican State. During that same period, the national average was 14.7 percent.
While many regions began to recover within the next few months, Louisiana did lag behind the national average. In October 2020, the Pelican State had an unemployment rate of 7.7 percent, while the national average was 6.9 percent.
It’s also important to point out that both of those numbers are set to climb. A COVID-19 resurgence is again shifting the landscape, leading to more stay-at-home orders and an increasing number of restrictions that will ultimately send unemployment rates up.
As a result, part-time job opportunities may be hard to come by for a while. This may be particularly true as an increasing number of people who lost their jobs earlier in the pandemic see their unemployment benefits end, forcing them to consider more options about work.
If you’re planning on retiring soon. It may be wise to make sure that your retirement income is sufficient to handle your needs, at least for a while. Once the pandemic is no longer a factor, the number of opportunities will likely climb. However, until that point, they could be fairly scarce, so it may not be wise to assume that you can snag one.
Best Cities for Retirees in Louisiana
Which city is best for your retirement will depend on your needs and preferences. Each one offers something a bit unique and may have a slightly different cost of living. All of that impacts the quality of your retirement.
Technically, any city could be a great option if it meets your needs. However, certain Louisiana cities do stand out from the crowd and are worth considering by any soon-to-be retiree.
If you’re looking for classic Louisiana Cajun vibes, then Lafayette can be a great choice. It’s chocked full of amenities and is just a two-hour drive from New Orleans.
Baton Rouge is another outstanding option. This capital city is incredibly vibrant and welcoming. It does well on the amenities front, and has an exceptional culture. You may also want to keep Shreveport-Bossier on your list. As it offers Louisiana charm with a touch of Texas culture.
If you’re looking for something unique, consider Natchitoches. It’s was the Louisiana Purchase’s oldest settlement and maintains a lot of its original French colonial charm and European flare.
How Much Money You Need to Retire Well in Louisiana
Since the cost of living is pretty reasonable in Louisiana. You may not need as much to retire well. While the city you choose does have an impact on affordability. If you concentrate your search on areas that have enough amenities but come with lower price tags. Your Louisiana retirement can be more than comfortable.
Overall, if you can access around $59,270 a year. You should be able to retire well in Louisiana. You’ll be able to cover your needs with ease. With many of your wants in easy reach, too. If you want to make sure your golden years are some of the best. That’s a decent target for making that happen.
Do you have any other tips that can help someone retire well in Louisiana? Share your thoughts in the comments below.
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