3 States Where Your Dollars Will Stretch Farther
Thinking of moving in retirement? That could be a wise idea. If your children have long since grown and moved out of the house, you may be able to downsize. That could help you reduce your home expenses and maybe even pocket your equity to boost your retirement savings.
You could reduce your cost of living even further by moving to a more affordable part of the country. The area you live in has a big impact on your budget. Large cities or areas near the coast may have higher costs for everything from groceries to shopping to housing and more. Also, some states have lower income taxes and property taxes, especially for retirees.
Below are a few states where your dollars may last longer. If you’re considering a relocation in retirement, you may want to check out the states on this list:
According to data from the Bureau of Labor and Statistics and the Economic Policy Institute, Arkansas is one of the most affordable states in the country, especially for seniors. A couple age 65 and older with no dependents can expect to spend just over $36,000 per year in retirement in Arkansas. ¹ Housing is also affordable, with a median home price of $118,500. ²
Arkansas offers some attractive tax benefits as well. There is no state income tax on Social Security benefits. Also, the state allows you to exempt up to $6,000 of retirement income from your state income taxes. ³ Finally, Arkansas on average has some of the lowest property tax rates in the country. ²
New Mexico offers a warm climate, wide open country, and a vast range of trails and parks. If you love being outdoors, New Mexico could be the right state for you.
It’s also an affordable location for retirees. Average retired couples with no dependents can expect to spend just under $37,000 a year in New Mexico. ¹ The state does tax Social Security benefits. However, they also offer a sales tax exemption on things like food and prescription drugs, which may help offset the cost. ⁴ Property taxes are also relatively low in the more rural areas of the state.
The Bluegrass State is famous for horse racing and bourbon, but it’s also a financially attractive spot for retirees. Average annual living expenses for retirees are just under $37,000 per year. ¹ The median price home in Kentucky is only $130,000. ²
Kentucky is also tax-friendly for retirees. The state exempts Social Security from state income tax. Also, you can deduct up to $31,110 of retirement income from your state taxes. That includes pension payments, IRA distributions, and more. ⁵
There are many other states and locations that could offer a more affordable lifestyle. Work with your financial professional to develop a retirement budget and determine how much income you’ll have in retirement. You also may want consider tools like annuities, which can provide guaranteed* lifetime income that can help you afford retirement in your dream destination.
Ready to plan your retirement relocation? Let’s talk about it. Contact us today at Thomas Financial. We can help you determine what locations may work best for your budget. Let’s connect soon and start the conversation.
*Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values.
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
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