Episode 013:
Should Taxes Play a Role in Where You Decide to Retire?


Episode 013 Summary:

When you imagine your Golden Pond – the retirement venue of your dreams – what does it look like? Have you really done your research and thought it through? On this episode of The Retirement = Freedom Podcast we learn from Host Josh Bretl, founder of FSR Wealth Strategies, some of the factors that are important to consider when choosing where to lay down post-retirement roots.

The old stereotype of “snow birds” spending part of their year in places like Arizona or Florida is less and less common today, with more retirees opting instead for a year-round change. Why leave your home state permanently? Weather is still a popular reason, but politics, cost of living, state taxes and even safety have become equally powerful influences.

It’s never too soon to start exploring the many variables that make some places more attractive than others from a financial planning point of view. Sales, income, property and estate taxes all vary, which is why it’s important to do your homework!

This episode features not only a fantastic interactive state-by-state map to get you started, but also the latest on some devastatingly delicious crepes and The Dave’s deeply moving haiku tribute to Alaska. Plus Breaking News! Josh has finally placed his order! Cometeer Coffee will be showing up at his doorstep any day, so stay tuned for an unbiased review on an upcoming episode!

Click here to learn more about or listen to previous episodes of The Retirement = Freedom Podcast. And don’t forget to join our new private Facebook group, which you can find here.

Key Takeaways

  • Josh remarks on a steady and growing number of clients who are relocating permanently to other states in retirement.
  • Retirees choose where to live based on a mix of factors, including weather (a big one!), politics, taxes, cost of living and in some cases safety.
  • The Big Four: Taxes that affect retirees at the state level:
    • Sales
    • Income
    • Property
    • Estate
  • Every state’s tax rates emphasize and are pegged to different priorities.
  • Illinois Note: The income tax structure for retirees is very beneficial – no taxes on IRA, 401k or pension distributions! (At least for now …)
  • Click here to see Kiplinger’s really cool interactive map breaking down the tax pros and cons for retirees on a state-by-state basis.
  • Should pizza be among the baseline criteria for where to live in retirement? It could be considered a quality of life issue! Someone needs to create an interactive map!
  • The hosts muse on where they might land outside of Elmhurst, which opens the door for a very special haiku composed by Dave especially for the great state of Alaska:

Moose, how I love you.
And your 30 days of night.
I will live there soon.

  • Dave Relates to Retirees: Or does he? Something about potentially relocating to be closer to his old high school basketball teammates, who have thoughtlessly scattered to the four winds … while selfishly living their lives!?
  • There are all sorts of reasons that people want to relocate in retirement because – guess what? That’s part of the “freedom” we want to enjoy in retirement!
  • Do you see it? Much like the classic TV sitcom “Full House,” the Retirement = Freedom show may start out on a light or wacky note, but Josh always finds a way to bring it home with Bob Saget-worthy emotion and wisdom!
  • Don’t forget: Securing your best retirement means a mindset shift and doing the prep!
  • Please consider visiting the new Retirement = Freedom Facebook group to let your friendly hosts know where you’d like to retire and based on what kinds of factors. See you there!

Quotable Quotes

“This takes a lot out of us. It’s not easy talking into a microphone to one of your good friends while drinking coffee. It’s hard!” ~Dave

“There are pros and cons to everything. Most people don’t make a decision (about where to retire) for tax purposes, but there are some financial reasons why you would want to live in a particular state.” ~Josh

“You need to know where your income is coming from and what’s important to you.” ~Josh

“There are reasons to move, but sometimes you just move no matter what – it’s just part of the equation.” ~Josh

“As I’ve said on previous episodes, having a plan ahead of time is always nice. Sometimes it’s not possible, but having that plan is quite nice.” ~Josh

“If you’re going to move wherever, you should know what (the state tax laws are) and plan accordingly because you’ve got time!” ~Josh

“Planning now will make your goals both obtainable and affordable so that you’re not struggling with what to do … The last thing you want is to regret your choices in moving from a financial standpoint.” ~Josh

“I’m going to start playing ‘Full House’ sappy music for your monologue!” ~Dave

Episode Extras

About your Co-Hosts

A certified public accountant, Josh Bretl has spent the past two decades growing FSR Wealth Strategies into a firm that specializes in tax-focused retirement planning. Because taxes have the single biggest impact on how much you can spend in retirement, Josh is dedicated to developing individualized financial plans that extend and grow his clients’ retirement savings. Based in Elmhurst, Illinois, FSR Wealth strategically preserves and maximizes resources through tax-efficient strategies designed to fulfill retirement dreams.

Apart from producing and co-hosting The Retirement = Freedom Podcast, Josh's longtime friend Dave Schmidt is a content production and marketing adviser to local businesses and nonprofits. He’s also an advocate for t-shirts, all things 90s (especially the music), short walks and long naps. A serial “wallet forgetter,” Dave nonetheless swears that he has picked up the check on at least one or two meals with Josh over the years. Evidence pending.

Standard Disclaimer:
FSR Wealth Management is a registered investment advisor located in Elmhurst, Illinois. Information and opinions contained in this audio have been arrived at by FSR Wealth advisors. All information herein is for informational purposes and should not be construed as investment advice. It does not constitute an offer, a solicitation or recommendation to purchase any security. FSR is not providing legal, tax, accounting, or financial planning advice in this audio. These views are as of the date of this publication and are subject to change.