There appears to be a common theme for pre-retirees living in Connecticut – they want to move out! If you talk to friends who have already moved to their new retirement homes you know that they have ventured to warmer climates, tax-friendlier states and communities that generally have a lower cost of living than our gold coast. Don’t we love the phone calls from our Florida friends in the dead of winter, “oh you should come down here, it’s in the 80s!” What are the main motivators for relocation? Lower taxes, warmer climate and lifestyle changes.
Taxes, as many know, are among the biggest expenses people face in retirement. Expenses, plural, consider, state, federal and property taxes combined. There are several variations of taxation in different states, especially for retirees. Most states don’t tax social security benefits; however, CT is one of the few states that does impose tax on social security income. There are even states that exempt pensions from their state income tax and then there are states such as Florida that has the Homestead Act that greatly reduces property taxes. Check out http://www.retirementliving.com/taxes-by-state and do some calculations. For example, if your combined taxes in CT are taking up 40% of a gross income of $100,000 and another state only 30%, that would be $10,000 more a year you would have to spend.
A change in climate is also another motivator and for some, the idea of Florida in the month of August may be considered unbearable. That is why the “snow birds” come back home for summers. In recent years we have come to realize that climate has had great variations and has become very unpredictable. Areas in Virginia, North and South Carolina experienced snow, sleet and 30 degree temperatures last winter. It might be best to visit your dream state in the “off season” as well as “prime season”. A couple who recently retired to Seattle to be closer to family was caught off guard when the winter months only provided 6 hours of daylight. They expected gray days and rain, but didn’t bargain for darkness.
Common to all is a sense of community. Something that is hard to predict and experience on a brief vacation. How far away is the grocery store, car dealership? How will you become involved with the community? You should also consider the proximity of hospitals and doctors, emergency care and overall ratings medical care. Think about what would be involved if you relocated from Orange to Greenwich and the changes you would have to consider for medical care. There are several websites with checklists available for relocation, www.howstuffworks.com is a good resource.
Development is especially important in the most popular areas of South Carolina and North – where they keep building and building. Be it condominiums, shopping strips, senior apartments, just constant growth. Find out what the future plans are for that city – it’s easy! Make sure you have access to all of your dreams – golf, travel, tennis, gardening, whatever hobbies you want to pursue. Spend some time online and start with the town’s website. Start planning now, remember you will have to get rid of all of your “stuff” and for some it can take years to sort through 30 or 40 years of accumulation!
Roberta L. Nestor is a financial advisor practicing at 491 New Haven Avenue in Milford, CT offering retirement, long term care, investment and tax planning services. She also offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network – a member FINRA/SIPC and a Registered Investment Adviser. Fixed insurance products offered through Nestor Financial Network are separate and unrelated to Commonwealth. Commonwealth Financial Network or Nestor Financial Network does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation. Roberta can be reached at Nestor Financial Network, 203-876-8066 or firstname.lastname@example.org.