7 Hidden Costs of Moving In Retirement
Before packing up and heading south, consider these expenses
(This article appeared previously on MarketWatch.)
If you've lived in a northern state and you're approaching retirement, the dream of moving to a sun-kissed state with low or no state income taxes has probably crossed your mind at least once. But moving in retirement is a big decision, regardless of whether your new home becomes a part-time escape or full-time abode.
Before you fall for the siren song of the South, consider these seven hidden costs of moving in retirement:
2. State taxes While several of the states to which Northerners defect boast lower or no income taxes (in addition to lower or no estate taxes), that's not the end of the story. States need to generate tax revenue somehow, and hefty property taxes are often a primary target. Additionally, your new state may assess sales tax at different rates and on different items that can increase your living expenses in unexpected ways.
6. Travel expenses Piggybacking off the previous point, if you choose to move far from your loved ones but still want to be highly involved in their lives, you'll need to factor in additional travel expenses. Plane fares, gas prices and hotel stays can add up fast. And while you may be willing to travel to visit your family, remember that they may not have the resources to come visit you.
Before making your big move, discuss this list with those who are emotionally and financially involved in your life to ensure you have both subjective and objective feedback. Only then can you make a responsible decision that makes this new adventure the dream you always imagined.
Brian Vnak, a director of Integrated Advice Strategies at Wealth Enhancement Group in Minneapolis, Minn., is a CPA, with a bachelor's degree in business administration and a master's degree in accounting, both from the University of Notre Dame. Contact Brian at [email protected]