Out of State Retirement

During the cold winter months, retirees flock to the sun in states such as Florida and Arizona.  Despite year-round sunshine and golf, these are not the best states to spend the golden years. 

Surprisingly, the best destination for retirement is South Dakota according to a 2014 Bankrate report.  The report’s findings were derived by assessing the average number of sunny days, cost of living, residents’ sense of well-being, quality of health care, crime and humidity. 

“As this report correctly suggests, pre-retirees need to consider a lot more than snow days and tradition.  Different states have different tax laws and other regulations that can have a major impact on your retirement funds.  You need to be aware of these as you plan for where you want to live and how you want to live.”

If you are considering retiring in another state, it is important to familiarize yourself with the tax laws.  If you are married, know if you are moving to a community property state.  There are nine community property states and moving to one may affect your estate.  Finally, it is important to have a lawyer review your estate planning documents as statutes differ on the types of documents required and the powers bestowed upon each.  “For that, it’s essential to consider not only the cost of living but the state laws that affect your accumulated wealth and income.”

See Rodger Friedman, 3 Tips for Retiring Out of State, Investor Ideas, Dec. 3, 2014.