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The largest generation in US history is retiring and buying property in the state with no income tax.

by 42772827 1y ago

ceejayoz 1y ago
And a corresponding level of services.
cpursley 1y ago
This is not even logical, retired people don't have incomes. Anyways, they get them with insane property taxes.
- koolba 1y ago
  Not quite. Retired people have deferred income in IRAs and 401(k)s that can be claimed at their leisure after 59.5 years old. So if you deferred taxes from a high tax State and then get the income in a no-tax State, you saved on taxes.
  - cpursley 1y ago
    True but generally this is lower than their W-2 was.
    - koolba 1y ago
      The point is that you finally have control of where are when you realize the income.
- karakot 1y ago
  Income from Social Security benefits and 401(k)s are taxable.
- righthand 1y ago
  Depends on what you mean by retired. In the traditional sense you’re correct, retired people don’t have income. In the legal sense retirement just means the person is of age to collect benefits. But there is also the question of type of income. If a retired person owns property and sells it, that is income subject to capital gains tax. If a person is retired but still owns the business or is even still a board member, they’re still working in a sense and gaining shares. There are plenty of “retired” people who are “working” and have income.
  - ghaff 1y ago
    Or at least not much income. But they still probably have dividends/interest. May well have annuities of various kinds. Probably not much W-2 income but probably some material cash-flow, especially if they have a vacation home.
- terminalshort 1y ago
  Depends how much money you retired with. When the ratio of your net worth to the cost of a house is high enough, property taxes are trivial. Let's say you have $50 million and you earn 7% a year on that. That's $3.5 million a year. Well worth it to live in FL to save the $350K you would lose every year in NY / CA.
  - toast0 1y ago
    Anything that involves living in FL isn't really worth it :P
    - cpursley 1y ago
      Yes, yes - terrible place. Horrible beaches, rivers, etc. Too many snakes, gators and mosquitoes. And we're all full.
- fragmede 1y ago
  New York state has a number of exemptions for property tax for seniors (65+), which seems like a better mechanism than California's prop 13.
- refurb 1y ago
  Florida's property tax rate on average, according to Google is 0.79%. Average home price is $411,000, for property taxes of $3,200 per year. That doesn't seem insane compared to say California with 0.71%?
PopAlongKid 1y ago
This explains very little. State income tax is based on your state of residence, not where you have a vacation home, in which by definition you do not live most of the year. Further, it makes no sense to refer to "the state with no income tax", as there are many of those. Granted, there are some working-age people who buy a vacation home with the thought of moving into it permanently a decade or two into the future, but those plans entail a lot of uncertainty (health, closeness to family) and of course once they move, it is no longer a vacation home.
- xhkkffbf 1y ago
  When they retire, they sell their house in the place with the job and move full time to the no tax state.
  - jaxn 1y ago
    So, no income tax right when you have less income?
    - xhkkffbf 1y ago
      But when you have less money, every dollar counts. The income tax in places like Cali or NYS can be huge because it eats into the disposable income. It could easy cut your disposable income in half or maybe eat it all.
      - mikestew 1y ago
        It has been my observation that no-income-tax states make up for it in sales tax and/or property tax. Government is getting its cut one way or another. Of course, retirees will want to skip CA altogether with their income tax and ridiculous sales tax.
        seangrogg 1y ago
        As you sort of allude to, YMMV. I moved from California to Nevada and literally all taxation went down. Income tax from progressive scheme nearing 10% to 0% Sales tax from ~9% to ~8% Property taxes are hard to pin to a single value, but with housing prices just being lower in general you wind up paying less for similar footage/amenities While it doesn't mean the observation is fundamentally inaccurate, it's worth keeping in mind that people looking at states with 0% income tax may be coming from a place where they're just getting reamed because work wants them there. If you're not flying under the SALT cap and work is remote friendly it's worth at least looking around.
pengaru 1y ago
> The largest generation in US history is retiring and buying property in the state with no income tax. Millenials are retiring already?

The largest generation in US history is retiring and buying property in the state with no income tax.

ceejayoz 1y ago

And a corresponding level of services.

cpursley 1y ago

This is not even logical, retired people don't have incomes. Anyways, they get them with insane property taxes.

koolba 1y ago
Not quite. Retired people have deferred income in IRAs and 401(k)s that can be claimed at their leisure after 59.5 years old. So if you deferred taxes from a high tax State and then get the income in a no-tax State, you saved on taxes.
- cpursley 1y ago
  True but generally this is lower than their W-2 was.
  - koolba 1y ago
    The point is that you finally have control of where are when you realize the income.
karakot 1y ago
Income from Social Security benefits and 401(k)s are taxable.
righthand 1y ago
Depends on what you mean by retired. In the traditional sense you’re correct, retired people don’t have income. In the legal sense retirement just means the person is of age to collect benefits. But there is also the question of type of income. If a retired person owns property and sells it, that is income subject to capital gains tax. If a person is retired but still owns the business or is even still a board member, they’re still working in a sense and gaining shares. There are plenty of “retired” people who are “working” and have income.
- ghaff 1y ago
  Or at least not much income. But they still probably have dividends/interest. May well have annuities of various kinds. Probably not much W-2 income but probably some material cash-flow, especially if they have a vacation home.
terminalshort 1y ago
Depends how much money you retired with. When the ratio of your net worth to the cost of a house is high enough, property taxes are trivial. Let's say you have $50 million and you earn 7% a year on that. That's $3.5 million a year. Well worth it to live in FL to save the $350K you would lose every year in NY / CA.
- toast0 1y ago
  Anything that involves living in FL isn't really worth it :P
  - cpursley 1y ago
    Yes, yes - terrible place. Horrible beaches, rivers, etc. Too many snakes, gators and mosquitoes. And we're all full.
fragmede 1y ago
New York state has a number of exemptions for property tax for seniors (65+), which seems like a better mechanism than California's prop 13.
refurb 1y ago
Florida's property tax rate on average, according to Google is 0.79%. Average home price is $411,000, for property taxes of $3,200 per year. That doesn't seem insane compared to say California with 0.71%?

PopAlongKid 1y ago

This explains very little. State income tax is based on your state of residence, not where you have a vacation home, in which by definition you do not live most of the year. Further, it makes no sense to refer to "the state with no income tax", as there are many of those. Granted, there are some working-age people who buy a vacation home with the thought of moving into it permanently a decade or two into the future, but those plans entail a lot of uncertainty (health, closeness to family) and of course once they move, it is no longer a vacation home.

xhkkffbf 1y ago
When they retire, they sell their house in the place with the job and move full time to the no tax state.
- jaxn 1y ago
  So, no income tax right when you have less income?
  - xhkkffbf 1y ago
    But when you have less money, every dollar counts. The income tax in places like Cali or NYS can be huge because it eats into the disposable income. It could easy cut your disposable income in half or maybe eat it all.
    - mikestew 1y ago
      It has been my observation that no-income-tax states make up for it in sales tax and/or property tax. Government is getting its cut one way or another. Of course, retirees will want to skip CA altogether with their income tax and ridiculous sales tax.
      - seangrogg 1y ago
        As you sort of allude to, YMMV. I moved from California to Nevada and literally all taxation went down. Income tax from progressive scheme nearing 10% to 0% Sales tax from ~9% to ~8% Property taxes are hard to pin to a single value, but with housing prices just being lower in general you wind up paying less for similar footage/amenities While it doesn't mean the observation is fundamentally inaccurate, it's worth keeping in mind that people looking at states with 0% income tax may be coming from a place where they're just getting reamed because work wants them there. If you're not flying under the SALT cap and work is remote friendly it's worth at least looking around.

pengaru 1y ago

> The largest generation in US history is retiring and buying property in the state with no income tax. Millenials are retiring already?