I’ve owned property in six different states, and nine separate cities.  What’s next?  Well. the intention is to stay in Oregon for at least the next five years, but my wife is in the media business, so that could change tomorrow.  I’m envious of people who have been able to stay in one or two places over the course of their careers.  They probably didn’t lose money like we did on real estate investments and moving costs.  Plus, once you’ve settled in an area for many decades, the chances of moving somewhere else are probably not a big consideration in retirement.   From our perspective, we will likely move at least two more times.

If we relocate to accommodate  my wife’s career, which I’m perfectly willing to do, it could be anywhere.  However, if we move when both of us are fully retired, it will undoubtedly be someplace warm with a beach nearby.  Or, we’ll sell our house and travel, possibly renting a home for a year or two in some exotic location.  Our criteria for selecting a new home base will be three critical factors:  location, taxes, and weather.  With both of us still in our sixties, healthcare is not yet big priority, but it’s apparently a big factor for many retirees.  Forbes Magazine identified the 10 best states for retirement, highlighting the key reasons:

  1. New Hampshire – healthcare
  2. Colorado – cost of living/healthcare
  3. Maine – healthcare
  4. Iowa – cost of living/healthcare
  5. Minnesota -healthcare/cost of living
  6. Virginia – cost of living/weather
  7. Massachusetts -healthcare
  8. South Dakota -low taxes/cost of living
  9. Wisconsin – healthcare
  10. Idaho – low cost of living

You can see where healthcare is a big factor in these rankings.  All these great states boast of beautiful scenery, low crime rates, and friendly people.  Only South Dakota can claim no state tax, plus the cost of living is low.  I’ve been to Mount Rushmore a couple of times, but I’m really not much of a Square Dancer or an outdoorsman.  Also, they don’t have a big league team in any sport.   The rest of these states would be quickly eliminated based on weather and location.  I’ve had the good fortune to travel to every state on this particular list and would be happy to visit again for a few days at any time.  It would take a lot of convincing, however, to get me to move to any of these fine states.  Let’s look at the next list:

States without taxes:

  1. Alaska
  2. Florida
  3. Nevada
  4. South Dakota
  5. Texas
  6. Washington
  7. Wyoming
  8. New Hampshire – tax only on interest and dividend income
  9. Tennessee – tax only on interest and dividend income

Now we’re talking!  As I begin to liquidate my IRA investments in favor of travel, any chance to avoid the 10% Oregon state tax rate would help stretch our dollars.  Florida and Texas  are both in the top five, and I’ve already lived there and done that.  I have family in Florida and they certainly have great weather and beaches.  It can be a little humid, but even that looks good after the heavy rains in Oregon this year.  Northern Florida on the Gulf side is definitely a possibility!  Texas is too hot, and the beaches aren’t as appealing as Florida.  Nevada, South Dakota, Wyoming, and Tennessee couldn’t possibly be any further from water.  We might end up there if the move is job related, but not by choice!  I’ve yet to travel to Alaska, but I think a week-long cruise and a view of the Northern Lights will be all I need of that state.  The Washington weather is similar to Oregon, so it’s not worth the tax savings when your money is all wet.

36 states allow retirees to exclude all or part of their retirement income from their taxable income.  Four states have no sales tax at all:

  1. Alaska
  2. Delaware
  3. Montana
  4. New Hampshire

Once again, these are states that can save me money in retirement, and are worth consideration.  Delaware, Montana, and New Hampshire are states I’ve yet to eliminate from contention.  All of these states, including Alaska, just have too much snow!  I got rid of my snow blower years ago, and don’t intend to buy another one.  If the tax savings are buried under a foot of white stuff, it’s only worth a ski vacation.

Before I call the movers, there’s one last list to consider.  The Tax Foundation ranked State and local tax burden as a percentage of state income.  This takes into account both taxes and cost of living.  States have a way of getting your tax dollars one way or another, so just because there’s no state tax doesn’t mean they won’t raid your pocketbook some other way.  Tennessee moves way up the list here, and Pennsylvania also shows some merit.  I do like both Country Music and Chocolate, but the weather would make me think twice.

  1. Tennessee 7.6%
  2. Wyoming 6.9%
  3. Texas 7.5%
  4. South Dakota 7.1%
  5. Nevada 8.1%
  6. New Hampshire 8%
  7. Florida 9.2%
  8. Alaska 7%
  9. Washington 9.4%
  10. Pennsylvania 10.3%

Everyone’s priorities are different.  There are thousands of people moving to each of these states on a regular basis.  Finding the right location to enjoy life is part of the retirement dream, and this was a good exercise for me.  For my wife and I, it really comes down to just six states, and although saving money is important – living near a warm beach is our primary goal.

  1. Florida – family, no state tax, Gulf beaches, and warm weather.
  2. California – Pacific beaches and warm weather, but costly
  3. Texas – hot weather, beaches, friends
  4. Alabama – weather and Gulf beaches
  5. Arizona – dry weather
  6. Indiana – family and friends

Happy Trails!