Additional Coverage:
- Retirees Who Regret Moving Say These 8 States Aren’t Worth the Hype (financebuzz.com)
Retirement Regrets: The Sunshine and Savings That Don’t Always Shine So Bright
For many, retirement means packing up and finding that perfect slice of paradise. But hold your horses, because not every “dream destination” lives up to the hype! Turns out, a surprising number of retirees end up kicking themselves for moving to the wrong spot, making it one of the biggest financial blunders you can make in your golden years.
We’re diving into some popular retirement havens that, for many, turn out to be more “oh no!” than “oh yeah!”
(Quick note: All tax info comes courtesy of the Tax Foundation.)
1. Florida: The Sunshine State’s Shady Side
Ah, Florida! No state income tax, right?
Sounds like a dream. But don’t let that fool you.
The state makes up for it with a relatively hefty combined state and local sales tax of about 7.02%. Plus, property taxes, at an effective rate of 0.74%, can be surprisingly high for homeowners.
And here’s the kicker: insurance premiums have gone through the roof lately. After a string of hurricanes, many retirees who envisioned blissful days in spots like Cape Coral are now facing sky-high costs that have quickly turned their tropical paradise into a money pit.
2. Texas: The Lone Star State’s Hidden Costs
Texas has been a beacon for retirees fleeing income taxes, and it looks great on paper. But once you’re there, you might discover some not-so-charming trade-offs.
For starters, property taxes are no joke, with an effective rate of 1.36%. Even with a paid-off home, those bills can sting.
Add in an average combined state and local sales tax rate of 8.20%, and your budget can take a hit at every turn. Beyond the wallet woes, Texas often ranks low for healthcare access, which can be a serious concern for aging residents.
3. Arizona: Desert Dreams and Dizzying Bills
Arizona: another sunny spot that seems ideal for retirement. But the desert heat comes with a cost – literally. Many transplants are shocked by utility bills, especially for air conditioning, which can easily hit $400 a month.
Overall, the cost of living in the Grand Canyon State is 6.4% above the national average, according to BestPlaces.net. That extra heat on your wallet might just make you sweat more than the sun.
4. Nevada: Where Tax Breaks Don’t Tell the Whole Story
Nevada’s no-income-tax reputation is a big draw, especially for those escaping California’s high taxes. But hold your horses – a lack of state income tax doesn’t automatically make the Silver State affordable.
Everyday expenses, from groceries to utilities, often surprise new retirees, especially in popular spots like Las Vegas and Reno. Reno’s cost of living is a whopping 18.6% higher than the U.S. average, and Las Vegas isn’t far behind at 10.6% higher, reports BestPlaces.net. Throw in extreme summer heat and limited healthcare in many areas, and some retirees find themselves longing for their old stomping grounds.
5. Delaware: The First State’s Unexpected Hurdles
Delaware, with its lack of sales tax and relatively low property taxes, seems like a budget-friendly dream for retirees, especially with no income tax on Social Security.
However, ongoing healthcare shortages across the state can put a damper on those dreams. Plus, its coastal location means a higher risk of storms and flooding, including those notorious nor’easters, which can be a real concern for everyone, especially seniors.
6. Tennessee: The Volunteer State’s Growing Pains
Another state without an income tax, Tennessee has seen a massive influx of retirees seeking a slower pace. But it seems a little too many folks have had that idea. Since 2010, Tennessee’s population has swelled by 10.9%, according to USA Facts.
This rapid growth has driven housing prices sky-high, with average home prices jumping from around $230,000 in 2021 to over $320,000 today, according to Zillow. This makes finding an affordable home a real challenge.
Oh, and to make up for that lack of income tax, Tennessee has some of the highest sales taxes in the nation, with a combined state and local rate averaging 9.61%. So much for a budget-friendly escape!
7. Colorado: Rocky Mountain High, Rocky Mountain Prices
Retirees flocking to Colorado for its natural beauty and fresh mountain air are finding themselves in a competitive housing market. All those newcomers mean higher housing costs, which can really strain a fixed income. While prices have started to stabilize, the median sale price still hovers around $530,000, Zillow reports.
Colorado also has a flat 4.4% income tax and an average combined local and state sales tax rate of 7.9%, which can take a substantial bite out of a retiree’s budget.
8. Idaho: The Gem State’s Pricey Polish
Idaho has been gaining buzz as an up-and-coming retirement spot, thanks to its natural beauty and supposedly lower taxes. Many move there seeking a slower pace, easy access to nature, and lower costs.
While Idaho delivers on natural beauty, it often falls short on the “lower costs” promise. In fact, the cost of living in Boise, the capital, is 19.6% higher than the rest of the U.S., according to BestPlaces. Add in Idaho’s 5.3% income tax and 6% sales tax, and those costs can quickly add up for retirees on a budget.
The Bottom Line: Test Before You Trek!
The grass isn’t always greener, folks! Before you make that big retirement move, consider more than just a quick visit.
If you can, try renting in your desired location for a couple of months. A trial run can save you from a major financial headache and ensure your retirement dream doesn’t turn into a regret.
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- Retirees Who Regret Moving Say These 8 States Aren’t Worth the Hype (financebuzz.com)