Broker Check
 

Where is the Best Place to Retire?

| April 30, 2015
Share |

By Nick Hughes,

If you are like many of our clients, you may spend your summers here in Tennessee and winters in Florida, Gulf Shores or other warmer climates.  Thanks to the Baby Boom generation, pre-retirees and retirees have a lot more options than did previous generations of Americans. There is a lot to consider before you decide where to live during retirement: your savings and investments, monthly income, family, friends, legacy, work options, weather, interests, health, and a variety of other factors. As you determine your priorities, keep these options in the back of your mind:

Tax-friendly states: An important issue for many people is cost of living. There is little to be done about federal taxes, apart from developing a strategy for taking retirement savings withdrawals that helps minimize your tax bill. However, you can choose to live in a state which has retiree-friendly tax laws. According to Kiplingers.com, the 10 most tax-friendly states for retirees, “…exempt Social Security benefits from state taxes. Most also exempt at least a portion of other retirement income, such as pensions and withdrawals from tax-deferred retirement plans.” The list includes: Alaska, Arizona, Delaware, Florida, Georgia, Louisiana, Mississippi, Nevada, South Dakota, and Wyoming.

Not-so-friendly tax states: Some states don’t give retirees a tax break. Of the worst states for retirees and taxes, Kiplinger’s reported, “Five of them treat Social Security benefits just like Uncle Sam – taxing up to 85 percent. Exemptions for other types of retirement income are limited or nonexistent.” The least tax-friendly states include: California, Connecticut, Minnesota, Montana, Nebraska, New Jersey, New York, Oregon, Rhode Island, and Vermont.

Affordable cities in the United States: Earlier this year, Forbes assessed which cities in the United States were the most affordable. They considered housing costs and cost-of-living and found many of the least expensive cities were in the South and Midwest. The top 10 included (in order): Birmingham, AL; Knoxville, TN; Buffalo, NY; Oklahoma City, OK; Cincinnati, OH; Memphis, TN; St. Louis, MO; Dayton, OH; Indianapolis, IN; and Columbus, OH and Detroit, MI tied for the number 10 spot.  Chattanooga came close but not quite in the top 10 although it seems we are surrounded.  

Not-so-affordable cities in the United States: A combination of expensive housing, high taxes, and pricey healthcare make some cities less attractive for retirees who are trying to stretch scant savings. The list offered by U.S. News included Bridgeport, CT; Honolulu, HI; Los Angeles, San Diego, Oxnard, San Francisco, and San Jose in California; New York City and Poughkeepsie in New York; and Washington, D.C.

Affordable cities overseas: If you pay attention to the news, you may have heard or read some Americans are retiring overseas where the cost of living is more reasonable than it is in some parts of the United States. U.S. News suggested retirees consider Carcassonne, France (where living expenses run about $1,750/month); Cayo, Belize ($1,100/month); Chiang Rai, Thailand ($750/month); Dumaguete, Philippines ($1,000/month); Granada, Nicaragua ($1,300/month); Ipoh, Malaysia ($897/month); Loja, Ecuador ($1,100/month); Nha Trang, Vietnam ($650); Tralee, Ireland ($1,500/month).

Communities of like-minded individuals: If you want to spend your retirement (which could last for many, many years) in a community of people who enjoy the same things you do, there are lots of options. There are communities that cater to those who love art, old cars, boats, motorcycles, and recreational vehicles as well as facilities for people from specific backgrounds, careers, or affiliations. In addition, residents of university-based retirement communities live near a college campus, take classes, and have access to skilled nursing care. Penn State; Dartmouth; Stanford; Washington and Lee; Oberlin; Denison; Cornell; Notre Dame; and many other colleges and universities are affiliated with retirement communities.

Communities of family and friends: Cohousing has gained popularity in the United States during the past decade or so. Cohousing.org described the opportunity. “Cohousing is a type of intentional, collaborative housing in which residents actively participate in the design and operation of their neighborhoods. Cohousing provides the privacy we are accustomed to within the community we seek.” Often, cohousing includes a blend of homes and shared facilities such as a common house, community kitchen, shared dining area, recreational facilities, and children’s spaces. The idea started in Denmark and has spread to other countries. There are several retirement cohousing options in the United States.

If you’re still searching for your ‘best place to retire,’ take time to consider your priorities. Once you have decided what is most important to you, you can research locations and housing options, as necessary. After you’ve narrowed your list, take time to visit the communities or cities you’re considering. If you’re thinking about building your own community, visit others which have been built to determine what you like and don’t like. Be sure to choose carefully before committing your resources.  



Data as of April 27th, 2015


Important Disclosure Information for the "Backstage Pass" Blog

Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Franklin Wealth Management), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Franklin Wealth Management.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Franklin Wealth Management is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of Franklin Wealth Management’s current written disclosure statement discussing our advisory services and fees is available for review upon request.  


Joe D. Franklin is President and Founder of Franklin Wealth Management.

 He is the writer of the Franklin Wealth Management "Backstage Pass" Blog and former host of the Financial Focus radio show on Ruby, WDOD (1310 AM) 

Share |