Cheapest Places To Retire
Ideally, the cheapest places to retire have low property taxes, low income taxes, low sales taxes, and a low cost of living. Retirees, on a fixed income, should consider moving to the locale that offers them the best combination of the above.
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As you begin your search for the cheapest places to retire, you will soon realize that it is a challenge to sort through all the facts. Some states have no income taxes, but their automobile license fees are much higher than perhaps the state where you now live.
Each state needs to raise revenue for public services. How it does, varies from state to state. For instance, in Mississippi, a state that has a high percentage of low income residents, the state chooses to charge a high automobile license fee. Even the poor own cars.
The reason is, many of the state's residents live in poor housing that would not appraise very high. Therefore, the amount they would receive through property taxes and school taxes is less than states that have more affluent residents.
Mississippi also requires parents of students to pay for their own school supplies. Northern states do not do this.
Cheapest Places To Retire - Low Property Taxes
Florida, Texas, and Arizona are popular states where many retirees choose to live. One reason is property taxes are lower. The reason for this is homes in the south do not need a basement because they do not need to be concerned with frost. Basements can add as much as 25%, or more, to the cost of a home.
A home without a basement is cheaper to build. Land prices are also lower. Add in the fact that the southern states do not need to raise revenue for snow plowing, salting and fall cleanup. If you retire to any southern state, you will benefit from lower property taxes.
Currently, real estate property values in Arizona have collapsed. This makes Arizona one of the cheapest places to retire when considering property values. A house that once sold for $100,000 now goes for about $40,000. Other states have also seen a major fall in prices making a move to a warmer climate all the more advantageous at these prices.
Cheapest Places To Retire - No State Income Taxes
If you are a high income earner, finding a state that has low or no income taxes should be high on your list of criteria for places to retire. The states that do not have a state income tax are:
- South Dakota
Tennessee and New Hampshire only tax interest and dividend income.
Cheapest Places To Retire - Low Sales Taxes
The states that do not have a sales tax are:
- New Hampshire
Unfortunately, all the states in warmer climates have sales taxes. Some of these states have the highest sales taxes in the nation. According to the Tax Foundation, California soaks you 9.06% for combined state and average local sales taxes.
Here are the combined state and average local sales taxes for these southern states according to the Tax Foundation:
- Arizona - 7.92%
- New Mexico - 6.4%
- Texas - 7.39%
- Arkansas - 7.79%
- Mississippi - 7.00%
- Alabama - 6.15%
- Florida - 7.01%
Boy, Alaska is looking better than ever. Not only do they have low taxes, they will pay you to live there. That is right, every resident shares in the oil revenues pumped from oil wells in that state. It is called the Alaska Permanent Fund.
Cheapest Places To Retire - Low Cost Of Living
Here are the top ten states that have the lowest cost of living in 2010 according to missourieconomy.org.
How did Alaska fare on cost of living? It ranked 49th with only Washington DC and Hawaii ranking higher in cost of living. Well, maybe Alaska isn't the cheapest place to retire after all. No doubt you will prefer a warmer climate than Alaska anyway.
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