Thinking About A State To Call Home

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Via Facebook, I see that the question of where to live in retirement strikes a chord.

A friend from high school and college (he’s definitely a retirement-eligible Baby Boomer)  provides some interesting info. He reports that the best five states to live in, if you want to stretch $1 million in retirement savings, are Mississippi, Arkansas, Tennessee, Kansas, and Oklahoma. I can see how they’d all probably be among the low cost-of-living states. And Tennessee is picturesque, plus it has Nashville. I don’t know that I’d be interested in the other four. ($1 million in retirement savings? Only in my dreams!)

Long as we’re on the subject, my friend reports the five worst states to spend your $1 million are Hawaii, Washington, D.C., California, Oregon, and New York. Or maybe they’re the best places to spend a million real fast. They all sound plenty pricey. Hawaii is probably worth it. And the other four all have some advantages to recommend them, depending on your individual preferences.

An excellent source for all kinds of U.S. geographical information is Bob Wells, famous for his Santa Claus beard and his YouTube channel, CheapRVLiving. Bob goes into the question of home states in some detail, including four long videos on YouTube and posts on his website, CheapRVLiving.com.

After listening to Bob, you’ll understand that choosing a state to call home is not an inconsequential matter. Far from it! It’s a lot more than cost of living, although that is important. First, he sets us straight about legal issues. You can own or rent a home in more than one state, if you can afford it. But Bob says only one state is your legal domicile. You can only have a driver’s license or vote in ONE state. “Domicile Sweet Domicile.” Doesn’t sound poetic, but it has serious implications.

I’m not going to repeat everything Bob Wells explains. Go to his YouTube channel or Website. Some of the most important domicile considerations for retirees who aren’t old enough to qualify for Medicare are medical. Does your health insurance cover you wherever you roll in the USA, or only in your home state?

Bob approaches the question of legal domicile from the perspective of folks who live on wheels, in their recreational vehicle (RV). It could be a travel trailer, a Class A, B, or C motor home, a van or pickup truck, or even a car. Whew! Come to think of it, more than a few retired folks choose exactly that lifestyle. Once they were tied to jobs, now they’re free to take to the open road.

Bob Wells identifies some of the best states for RVers to consider as a domicile, even if they’re rarely in that state. They are: South Dakota, Florida, Texas, and Nevada. A major item of interest to RVers is how easy the state makes it to become a legal resident, get a driver’s license and register your vehicles. In SD, FL, TX, and NV it’s pretty easy. South Dakota is easiest of all. And all four states offer the advantage of no state income tax, a major attraction for many retirees.

Other states with no income tax are Washington state, Wyoming, New Hampshire and Alaska. I’m not sure about Tennessee.

I think the Middle Atlantic states are generally among the higher cost of living and taxes. My state of Maryland has an income tax, plus a county income tax that piggybacks on the state tax.

Many people from Maryland move to Delaware for retirement. Far as I know, Delaware has income tax, but no sales tax. My Uncle Joe owns a home in southern Delaware, and besides no sales tax, he brags about his low annual property tax. Uncle Joe just turned 90 and he’s sharp as a tack.

Remember, it’s not all about money. Low cost of living and low taxes are not the only considerations, and maybe not the most important. Please don’t make any decisions based on the information in this post, or anything else you see on the Internet. Do your due diligence and make decisions based on verified correct info.

In a day or three, I’ll get back to why I chose Florida. Hint: It’s not about the income tax.

— John

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Income can decline quick and easy, spending seems frozen

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One thing I know. It’s easy for income to crash and burn. It’s not so easy to reduce outgo, that is, spending.

People become accustomed to a standard of living. It’s painful to take an ax to that standard of living after a loss of income. People cling to the familiar. Spending seems frozen solid. It thaws slowly.

If you live in a house, mortgage payments won’t go down, at least not easily. Selling the house could take months, or years. If you live in an apartment, you might at least have to wait for the lease to expire before you can move. And then, move where?

The kind of clothes you’re accustomed to wearing, the food you’re accustomed to eating, the entertainment you enjoy, whether lavish or simple. The car you drive! And the cost of gas. All the familiar things constitute your lifestyle. They cost money. Lifestyle is change-resistant; cutting spending is slow and painful. It’s the way of the American capitalist-consumerist economy.

A few days ago, I promised to outline the steps that brought me to the present, which includes being able to restart this blog. I don’t want it to be all about money. Money is not important; that’s been my philosophy. Nonetheless, income and spending dictate the details of the way we live.

When I turned 65 in the summer of 2013, and became eligible for Medicare, I imagined I could afford to retire. You know, stop working. So when the motel closed at the end of the season, I told the owner I wouldn’t be back for the 2014 season. Even now, I can’t say if that was the right or wrong decision. No point in looking back.

I moved to my home county, because that’s where I grew up and where most of my relatives still lived. It seemed the logical thing to do. But the Washington, D.C., metro area is high cost-of-living. It became apparent that I couldn’t afford to rent an apartment congruent with my accustomed lifestyle. (And I was accustomed to living in quite small, one-room efficiency apartments.) Since rent is the largest item in my budget, rent became the central issue.

So I decided to stop working (retire) in 2013. Retiring and moving in the same year are probably not a good plan, but that’s what I did. The reality of the income/spending lifestyle predicament soon became obvious. I should have been more aware that retirement would reduce income and require adjustments.

The obvious question, which I raised two posts ago, presented itself:

How and where do I live a good life at this late age on a sustainable basis?

Before long, in early 2014, I began pondering and researching the above question. Researching consumed most of 2014, 2015 and 2016. In a day or three, I’ll pick up the story.

— John

What If Debt Is Not The Problem?

Wipe our Debt

(Photo credit: Images_of_Money)

“As we return once again to our regularly scheduled program of ‘Crisis And Impasse,’ let’s take a moment to consider the following heretical idea: We have no debt problem.”

That’s the take-your-breath-away lead to a commentary by Zachary Karabell on the business section front of today’s Washington Post. Karabell gives a concise overview of the American debt debate from the time of Alexander Hamilton and Thomas Jefferson through William Jennings Bryan and the long-running confrontation over the gold standard, up to the present day. Continue reading