Moving in retirement? Key factors for switching states

Beyond considerations like climate and proximity to loved ones, moving to a new state in retirement comes with a host of other decisions and ramifications.

  • Investopedia
  • – 12/01/2022
  • Living in Retirement
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Lifestyle. Sunshine. Scenery. Friends. These are just some of the attractions that might draw you to a different state when you retire. You might also find a low (or non-existent) state income tax to be a compelling siren song.

But no matter what state you end up in, stuff in your life that you considered settled may turn out not to be. Besides the big, obvious differences between states – things like income tax, estate tax, and so forth – there are a host of smaller issues you might not have thought of.

Example: New York does not have a residency requirement for the person you choose to be executor of your will (assuming they’re a U.S. citizen); Florida does, unless you’re related by blood, marriage, or adoption.

So does that mean you’ll have to rewrite your will? Well, it means you may have to tweak it and sign a new version – no matter what state you move to. The same might go for power of attorney documents, as well as a healthcare proxy and living will.

While many states will in theory honor a legally executed document from another state, in practice local professionals might be more comfortable acting on a familiar format or execution. The requirements and standard formats of these documents tend to be dictated on a state-by-state basis – and while some states have stated statutorily that they will honor other states’ legal documents, this is not by any means standard.

You are probably better off updating your critical documents in your new state of residence, since the times when these documents come into play are often not times you want to be running around looking for a notary.

Here, some key considerations for the most popular states for people to retire to:

1. Florida

Income Tax:3 None

Estate tax:4 None

Inheritance tax:5 None

Property tax (avg. tax as percent of home value):6 .86%

Median housing price per sq. foot:7 $277

Percent of population age 65+:8 21.1%

Average winter temperature:9 59.4 degrees

Residents per golf course:10 24,364

2. South Carolina

Income Tax (top marginal rate): 7%

Estate tax: None

Inheritance tax: None

Property tax (avg. tax as percent of home value): .53%

Median housing price per sq. foot: $190

Percent of population age 65+: 18.4%

Average winter temperature: 46.1 degrees

Residents per golf course: 19,994

3. Arizona

Income Tax (top marginal rate): 4.5%

Estate tax: None

Inheritance tax: None

Property tax (avg. tax as percent of home value): .6%

Median housing price per sq. foot: $279

Percent of population age 65+: 18.2%

Average winter temperature: 43.6 degrees

Residents per golf course: 25,633

4. Delaware

Income Tax (top marginal rate): 6.6%

Estate tax: None

Inheritance tax: None

Property tax (avg. tax as percent of home value): .59%

Median housing price per sq. foot: $210

Percent of population age 65+: 19.7%

Average winter temperature: 36.1 degrees

Residents per golf course: 35,355

5. Idaho

Income Tax (top marginal rate): 6%

Estate tax: None

Inheritance tax: None

Property tax (avg. tax as percent of home value): .65%

Median housing price per sq. foot: $293

Percent of population age 65+: 16.2

Average winter temperature: 25.4 degrees

Residents per golf course: 23,280

6. Nevada

Income Tax: None

Estate tax: None

Inheritance tax: None

Property tax (avg. tax as percent of home value): .56%

Median housing price per sq. foot: $273

Percent of population age 65+: 16.3

Average winter temperature: 32.2 degrees

Residents per golf course: 37,405

7. Wyoming

Income Tax: None

Estate tax: None

Inheritance tax: None

Property tax (avg. tax as percent of home value): .51%

Median housing price per sq. foot: $188

Percent of population age 65+: 17.2%

Average winter temperature: 21.2 degrees

Residents per golf course: 17,480

8. Mississippi

Income Tax (top marginal rate): 5%

Estate tax: None

Inheritance tax: None

Property tax (avg. tax as percent of home value): .63%

Median housing price per sq. foot: $130

Percent of population age 65+: 16.5%

Average winter temperature: 46.7 degrees

Residents per golf course: 27,676

9. New Mexico

Income Tax (top marginal rate): 5.9%

Estate tax: None

Inheritance tax: None

Property tax (avg. tax as percent of home value): .59%

Median housing price per sq. foot: $183

Percent of population age 65+: 18.3%

Average winter temperature: 36.1 degrees

Residents per golf course: 57,230

10. Maine

Income Tax (top marginal rate): 7.15%

Estate tax: 8% to 12% ($5.8 million exemption)

Inheritance tax: None

Property tax (avg. tax as percent of home value): 1.2%

Median housing price per sq. foot: $234

Percent of population age 65+: 21.3%

Average winter temperature: 16.8 degrees

Residents per golf course: 11,644

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