Retiring Out Of State Know The Financial Facts

Dated: 05/02/2016

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Martin ( Marty ) Bassett 
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Retiring out of State? Know the Financial Facts

While you may be eyeing a move to a sunnier spot to spend your retirement years, experts say you need to consider a lot more than warm weather before choosing a new state to live in - tax laws, for one.

According to Rodger Friedman, founding partner and wealth manager at Steward Partners Global Advisory and author of “Forging Bonds of Steel,” “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.” Here are a few tips for planning ahead:

New state – new income tax rules. Get to know them!
Familiarize yourself with the tax laws of the state you’re considering for your new home. Two of the top five on Bankrate’s list of best places to retire – South Dakota and Wyoming -- have no state income tax, along with five others: Nevada, Texas, Washington, Florida and Alaska.

Also, an itemized deduction in one state may not be an itemized deduction in another. If you use the long form (1040) to file federal income taxes, hire a reputable, experienced CPA for guidance.

Look into how your new state taxes retirement income. States differ on taxing interest income from tax-free municipal bonds. Some states give tax credits; treat public and private pensions differently; or offer federal, military or blanket exclusions.

The following states are community property states: Idaho, New Mexico, Texas, California, Arizona, Wisconsin, Nevada, Louisiana and Washington.

If you’re married, are you moving to a community property state?

Retiring out of State? Know the Financial Facts

There are nine community property states – those that divide all maritally-acquired assets and debt 50:50 in the event of divorce. Community property states are Idaho, New Mexico, Texas, California, Arizona, Wisconsin, Nevada, Louisiana and Washington.

Have a lawyer review your estate planning documents.
Your existing estate-planning documents should be reviewed by a lawyer in your new state of residence because statutes differ on the types of documents required and the powers bestowed upon each. For example, states are all over the map regarding the validity of a power of attorney document and the powers that may or may not be conveyed.

Keep the above information in mind to help stay financially fit in your golden years!

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Marty Bassett

Your Trusted Real Estate Advisor Bassett Home Group Marty has been a full time Licensed Realtor in Idaho since 2007. He is a member of the Bassett Home Group along with his wife, Karla Bassett, ....

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