Although it’s possible to have a great retirement where you currently live, many retirees relocate for lower taxes or warmer temperatures. In 2020 alone, 400,000 retirees made a major move, with 38% relocating to another state. Whether you want to move to be near your kids or save money on housing, relocating may enable you to enjoy your golden years more. Here are our tips on how to retire well by moving to another state to help you decide where to live.
Choose a State with Low Taxes
Choosing a state with low taxes can help your nest egg stretch further. Unsurprisingly, one of the most tax-friendly states for seniors is Florida. It doesn’t have any estate, inheritance, or income taxes, allowing you to hold onto more of your money. Georgia is also a good choice for retirees because it doesn’t tax Social Security payments and doesn’t have an estate or inheritance tax.
If you prefer a colder climate, Wyoming and South Dakota are great places to retire because they don’t have a state income tax. Wyoming also has some of the lowest sales and property taxes in the country, which can make it easier to live on a fixed income.
Other tax-friendly states worth considering include:
- West Virginia
Research Housing Prices
Another factor to consider when choosing a place to retire is housing costs. If you’re planning to purchase another home, picking a state that has lower property values than where you live now may enable you to buy your next house in cash. Being mortgage-free in retirement will leave more room in your budget for travel and other luxuries.
Some of the cheapest states to buy a house include:
- West Virginia
However, you shouldn’t move to a state just because it has the lowest property values. It’s not worth it to live in a place you don’t like just for lower housing costs. Even if you end up in a state with slightly higher property taxes or home prices, there are ways to offset those costs.
Communities for people 55+ tend to have lower, more affordable home prices. You could also buy a multi-family home and rent out the other units to cover the cost of your mortgage.
Consider Transportation Costs
Another way to retire well by moving to another state is to consider transportation costs. Some states have high insurance rates and gas prices, which can strain your finances. Michigan is the most expensive place to own a car with an average annual cost of $5,413.
On the other end of the spectrum, New Hampshire is the cheapest state for vehicle owners. It costs just $3,344 per year to own a car there. You can also drive a car without breaking the bank in North Carolina, Virginia, New Mexico, Missouri, Ohio, Montana, Mississippi, and Alaska.
Relocating to another state that has cheaper taxes or housing prices can help you make the most of your retirement income. No state is perfect and will have everything you’re looking for. But with some research and planning, you should be able to find a place to live that meets your lifestyle needs and budget.
Here’s How to Retire Well on 60K Per Year
How to Retire Well in Virginia
How to Retire Well in Vermont
If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.
Check out these helpful tools to help you save more. For investing advice, visit The Motley Fool.