There are many things to consider when deciding where you are going to retire. Economic factors that will affect your nest egg may be the most important. Why? It may be that things like low crime rate and beautiful weather come at a very high price. The price may be more than you are willing to pay or even more than you can afford. In order to compare cost of living, tax rate and long-term care costs, I looked into several different sources. First of all, Investipedia.com compared the cost of living index and tax rate data from bankrate.com’s list of “Best and Worst States to Retire” and Kiplinger’s list of “10 Worst States for Retirement” to come up with their list of “The Most Expensive States to Retire In.” Then we factored in Genworth’s “2015 Cost of Care Survey” in order to come up with a list of the five most expensive states when considering all the factors. In alphabetical order they are:
- Connecticut ranking #3 in tax rate and cost of living and #2 in long-term care expenses. Along with a state estate tax, Connecticut also is only one of two states that collect a state gift tax (New York is the other).
- New Jersey ranks #2 in tax rate, #6 in cost of living and #4 in long-term care expenses. There is also a state estate tax, so New Jersey is also one of the six states that collect state inheritance tax.
- New York ranks #1!, at least in tax rate. New York ranks #4 in cost of living and #5 in long-term care expenses. New York has state estate tax. It is also one of the two states that collect a state gift tax (as stated above, Connecticut is the other).
- Rhode Island ranks #8 in tax rate, #9 in cost of living and #10 in long-term care expenses. Rhode Island also collects a state estate tax.
- Vermont ranks #9 in tax rate, #10 in cost of living and barely fell out of the top ten by coming in #11 in long-term care expenses. Vermont also collects a state estate tax.
Each of these states is very expensive to live in and since they collect their own state estate tax they are very expensive to die in.
Final Thoughts on Where to Retire
We see these list all the time on MSN and Yahoo and other sites that are constantly publishing this sort of thing. I think they are posted just in order to get our attention. We all think about retirement and where is the best place to do it. Ultimately, the choice of where to retire is very personal. Finances, tax rates and cost of care may be important to you. However, some people just want to be close to home, close to their children, close to their grandchildren and other family members. We all know that remaining close to our social circles and having a vibrant and active social circle contributes to a longer and happier life. Staying where we are may be more important than saving a few dollars.
Wherever you decide to retire, when you get there please seek the advice of a qualified estate planning counsel to make sure your plan will work when it is needed. If you do locate when you retire, decide to live part time in multiple states, or if you are travelling a lot I encourage you to give me a call so that I can assist you with your estate planning needs.