Early Retirement - Financial Freedom (Investing, Tax Planning, Retirement Strategy, Personal Finance)

Retire in Style: The 4 States That Offer the Best Bang for Your Buck

• Ari Taublieb, CFP®, MBA • Episode 235

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This episode guides listeners through the process of selecting the ideal state for retirement, weighing financial incentives against personal happiness. The discussion centers on Florida, Arizona, Tennessee, and North Carolina, examining the pros and cons of each state, as well as critical financial considerations for future retirees.

• Evaluating Florida's no-income tax benefits 
• Understanding Arizona's climate challenges 
• Highlighting Tennessee's low-cost living and unique culture 
• Discussing North Carolina's strategic tax treatment of retirement income 
• Importance of community, healthcare facilities, and amenities in relocation 
• Encouraging listeners to balance personal happiness with financial concerns

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Ari Taublieb, CFP ®, MBA is the Chief Growth Officer of Root Financial Partners and a Fiduciary Financial Planner specializing in helping clients retire early with confidence.

Speaker 1:

Welcome back to the Early Retirement Podcast. Today we're gonna talk about which state you should retire in. Now I tell this to all my clients don't retire in one state, because that's the best tax strategies and you're gonna minimize tax bill. If you have no friends or family that are there, it does not make any sense. Make sure you are absolutely retiring where you're excited to retire. Now some of you I recognize are like look, we're going to travel big the first few years of retirement or we're going to live overseas. So like, we just want a home base. And so we're just wondering, like, what's the most optimal decision? I get that. That I'm 100% on board with. But I have people that reach out that have 5, 10, $15 million and they're like optimally, I think I should live in Florida because there's no tax and it's going to be really attractive. And I said, great, like, do you want to live there? They're like absolutely not. It sounds terrible Like my friends are here in California but like the taxes are just crushing me. I'm like no, I get that and I live in California. I pay a lot in taxes. I would love to minimize my taxes, but I also recognize my friends and family are here. So it's almost like I pay that cost and I choose to do it. So we just want to know if we're going to retire, are we optimizing where we're living? And the factors I looked at were the following I looked at economic data, healthcare statistics and lifestyle factor. So we're going to go through the primary states we're going to be discussing today Florida, arizona, tennessee and North Carolina.

Speaker 1:

I've got a ton of different fun stuff I'm excited to go through with you. If you don't already know, my name is Ari Taubli, I'm a certified financial planner, I'm the host of this show, the Early Retirement Podcast, and I am the Chief Growth Officer at Root Financial. If you get excited with any strategy I talk about before you actually execute, please, please, be smart about this. This should all be construed as no financial advice. It should not be construed as financial advice. That would be proper English and this is for fun, educational information of informative purposes. Only. I cannot talk today, so not very helpful for a podcaster, but I get excited when I get to talk about certain topics and this is one of them, so I want to start going straight into it. Of course, I'm going to always have this be a podcast episode on the podcast applications and on YouTube as video format.

Speaker 1:

So number one is Florida. Florida is a big spot for retirees for a few reasons. Well, there's no income tax, so significant savings if you're withdrawing from retirement accounts. Social Security, the warm climate year-round, obviously. And then extensive healthcare infrastructure for aging population Some statistics around it. Population, some statistics around it. No state income tax, 1,350 miles of coastline, over 1,000 golf courses, 2.8% lower overall cost of living compared to the national average and a high concentration of healthcare facilities per capita. Now those are the pros, the cons. The state faces increasing property insurance costs due to natural disaster risks, and popular areas have seen sharp increases in housing costs. Of course, hurricane risk and humidity. Florida is the go-to for a lot of people. Totally recognize why.

Speaker 1:

I do want you to always, though, take a step back before you actually retire somewhere and go. Do I want to be there? I know I mentioned that early on, but I don't want someone to go retire and go. Yep, I just saved 30,000 a year in taxes and I don't like my life anymore. That defeats the purpose. I want you to live your dream life, and sometimes that's also for many of you like look, I'm living my dream life if I'm saving 30,000 a year in taxes. So that's Florida, no-transcript.

Speaker 1:

He had a heart attack, flew him to Arizona, forever grateful. That state has a big spot in my heart the challenges it is crazy hot in the summers. So I had a client that moved to Arizona and they were like it's because. So they moved from New Jersey to Arizona A lot of the reasons I mentioned there and they loved it for nine months, not from June to August. Not a fan. So in those months they're like look, we just kind of stayed indoors. We didn't plan our retirement for also having a secondary home or traveling somewhere else. So consider Seattle Now only saying consider, because I had a client. So when I went to college up in Seattle and I think that's the best place in the world for summers If you have a different thought or argue differently, let me know in the comments or leave a review, shoot me a note.

Speaker 1:

In any way, you can, of course, go to my website, earlyretirementpodcastcom, to email me. And I only say this because this couple not the one that moved from New Jersey to Arizona, but a different couple that went to Seattle for the summers they're like this is the best. And they did Vrbo, which I did not know about, but do you guys know this V-R-B-O? So not Airbnb, but like you, go get a place for a month or two months or three months or whatever you want long-term stays and they did that and they loved it. So their plan is now to do a different state each year. So they did Seattle Washington. Now they're going to do I think it was like Minnesota, I don't know why Minnesota in the summer, but that's what they want to do.

Speaker 1:

So consider that Tennessee. Tennessee has emerged as a leading retirement destination and that is due to low cost of living, no state income tax, diverse geography you got mountain and urban and then the state central location, easy access to different regions. Once again, no state income tax, 10.3% lower cost of living than the national average. That's 2.3% better than Arizona. Not the reason to go there, but important Four distinct seasons and the winters are moderate. I have clients that send me photos. Yes, it's still winter, but it is moderate. If you live there you can tell me otherwise. Strong healthcare system and then rich cultural heritage and music scene. Community is tough, not in Tennessee. So something to consider the challenge that I've seen some areas they face healthcare access issues. I have a client that is in rural Tennessee so they had.

Speaker 1:

It wasn't a heart attack, but a stroke of some kind, more complicated than that. If they're listening right now, trust me, I I know I didn't explain that well and they were fine. But getting to a hospital took some time. It's like being I spent some time in the Adirondacks in New York, so up North New York, it was a hassle getting to a hospital. It was about three hours. You're going to all think I'm idiots after this, but I'll tell you anyway. So there was a big peanut allergy.

Speaker 1:

I worked at a camp called Brant Lake Camp and this was when I was in college, so I don't know 10 plus years ago, and I'm working there and I chose that job because it paid the most out of any other job I could find and I wanted to be a camp counselor and be away from. I just want to be on the East coast for that summer. So I go to New York, gorgeous Adirondacks. I saw photos of the sunset. I was sold. I'm getting there.

Speaker 1:

And these kids when I say these kids are stuck up. So I grew up in Malibu and my parents did not have a ton of money, but my dad wanted to be near the ocean that's how we lived in Malibu and so he'd rather live in a shack but be able to surf than be in the valley where it's super hot. So we're living there. People around us super wealthy, wasn't us? My point here is I saw some brats okay, that's me putting it nicely. Some of these kids are driving Lamborghinis. They're talking to teachers in high school in a way that you're like look, they're still humans. It was like horrible. My point is that when I was at this camp, these kids were just attitude of the attitude. So I don't know, that is not the direction I meant to go here.

Speaker 1:

The direction I meant to go here was I had my duty, was like making sure peanut allergies were at a minimum. I'm Jewish. I don't have a peanut allergy, but this was a very Jewish camp. Okay. So tons of allergies here, and you get there a week early and I was there a week early, and so they're like hey, if any of you guys have brought peanuts or almonds or all these different I don't think almonds applied, but a bunch of other nuts they named like, make sure to eat those, because we don't want this to be an issue in a week from now when the kids arrive and we're prepping it.

Speaker 1:

So I was trying to gain weight, so I'm having a lot of protein. So I had all these walnuts and this is a longer story than any of you guys ever asked for and I don't blame you if you're skipping right now but I had all these walnuts and I'm just going to finish the story real quick and I was like I need more protein. Walnuts have good protein and it turns out I'm allergic to walnuts. So all I ate was walnuts and I'm like, why is my throat hurting? Maybe it's a lack of protein? I mean, how stupid am I? So I'm having more walnuts and so basically, my throat comes out to here and I go. I'm like I am sorry, I don't want to be a hassle, but like I'm whole neck is swollen. Getting to a hospital was a pain Three hours away Hope that never happens to any of you guys and probably a story you could have lived without.

Speaker 1:

Okay, next state, last state here North Carolina. North Carolina offers. If you have a good medical story, by the way, that will make me feel better than that let me know in the comments. North Carolina offers a balanced approach to retirement, with varied geography mountains to beaches, moderate climate, strong healthcare. The state's tax treatment of retirement income is also favorable and cost of living is competitive. So social security income is tax exempt, meaning there's federal social security and there's state social security taxation. So social security income is tax exempt in North Carolina state. 5% lower cost of living, the national average, top tier healthcare you've got Duke and UNC right there diverse recreational opportunities and apparently strong sense of community.

Speaker 1:

I only have like a few clients in North Carolina I don't know why, so I can't talk to it in great detail but growing popularity has led to increased housing costs, particular in the research triangle and coastal regions. So I want to go over that. Those are the four states to consider, and then I want to go over some stats. So this was from an economic analysis. Florida sees an annual economic impact of $150 billion from retiree spending. Arizona's retirement communities contribute $12 billion annually to the state economy. So like this is big, north Carolina's retirement communities have created over 50,000 jobs.

Speaker 1:

In terms of financial considerations, the things that I tell my clients number one, evaluate total tax burden, not just the income tax. So if you're just going to Florida for income tax but you're actually going to have way more taxes because of all these other reasons like that defeated the purpose. Consider long-term healthcare and insurance availability. Factor in property taxes. Are you going to rent in retirement? The property taxes how do you want to structure that? In California there's a few different options. So you can say I want to keep my house in my name and then if my kids inherit it, they keep my property taxes. You can say no, I want to put it in their name. So defeats the step up in basis because it's now in their name. But property taxes at that point, you know, stay competitive. So it just depends what you're looking for A research cost of living trends over the past decade. So no matter where you're going to live, if you go to North Carolina, but you're in the wrong part obviously it plays a big role.

Speaker 1:

Lifestyle visit during different seasons before committing. You probably know this story, but I have a client that loved Hawaii so much for a month, not forever. Well, they bought a home, big financial hit. So like go to Hawaii at different times of the year. It's gorgeous literally almost all of the year. But year it's gorgeous literally almost all of the year. But it's worth considering especially Kauai. It rains a lot there.

Speaker 1:

Research, healthcare facilities and specialists evaluate proximity to family and travel hubs. I have a couple that moved from I think it was Sacramento, I think it was Elk Grove, anywhere right near Northern California, and they moved there and they were living in, I forget, but somewhere in Arizona, and they were like we're going to be with grandkids, but not that much, once every few months. They wanted to be with them all the time. So they're paying for these plane tickets, constantly moved to Arizona for the weather, but also because of state tax reasons, and they're like look, I don't even know if we're coming out on top because we fly to see our grandkids all the time and because our backs hurt, we fly first class only. So, like, if they're flying every week, you defeated the purpose.

Speaker 1:

So consider family and, hey, if you think you're gonna really wanna be around them, consider amenities and social opportunities. So we'll call this ROH return on hassle, for I live right next to my brother. My brother lives right next door. We own a semi-professional soccer team. We would argue our team would not play as well if we did not live next door. Because if I have an idea of like, hey, I think we should play this new system. I want to be able to walk over right now and tell him versus, save it for later, and then I never get it to him. If you guys are like, hey, we want to play a lot of card games in retirement, or it turns out we want to be part of a golf community or whatever it is, if you're not walking distance from that community, like you will just see it less often, it will not be as fun.

Speaker 1:

I have couples that have no desire in any way to be in a retirement community and they're like we want to live on our own and we make food at home. I have others that are like I never considered it, but the fact that I could have food made for me and I don't have to do anything, and it's a cafeteria, that's my style, I get to talk to people Great, you guys get to choose Future outlook things to think about. Is technology, infrastructure so eminent domain and things like that is not something to worry about in retirement. It, of course, could occur if you own any home, but mainly like hey, is this going to Austin, Texas, becoming a very tech forward town? Is that a community you want to be in? Are you in a community with mixed ages? I have retired couples that are like I like being with young people only because they think more you know whatever for me. I have couples that say that. I have other couples that are like I want to be around people like me in my stage of life. So it depends, I would argue. You can find people anywhere.

Speaker 1:

The conclusion Florida, arizona, tennessee, north Carolina on paper, the best states to retire to. There are, of course, benefits. If you're going well, should I be in South Dakota because of the way I can set up my business and my income if I'm overseas? Or what other benefits exist if I go to Washington? Should I go buy a camera in Oregon because no sales tax? Like, yeah, we could go through this all day and maybe I'll do if you guys want a future episode on, just like, the absolute financial benefits of every single state, but for today this is just retirement, how to think about retirement in a certain state. So hopefully this was helpful.

Speaker 1:

I don't think it was my best episode, I will admit, because I'm doing some research on these different states and I try to bring in my client stories, but I'm always trying to do my best. So, guys, appreciate you guys, as always, listening and tuning in. I appreciate any reviews. That's what helps this grow. So leave comments, leave a review if you want other people to retire with confidence, and I don't take it lightly when you share this with coworkers and friends. So, thank you guys. Thank you all, as always, for listening to the Early Retirement Podcast. I love getting to host these shows and make different content for you guys every single week. I've not missed a single week in years and that is because I love getting to do this.

Speaker 1:

Now, please be smart about this. Before you actually execute any strategy that you see me talk about or hear me talk about, should I say Please talk to your financial advisor, your tax preparer, your estate attorney. Please be smart about this. None of this should be construed as financial advice. This is for fun, educational, informational purposes only. Once again, just quick disclaimer here guys, please be smart about this. Appreciate you listening, as always, and you can, of course. Guys, please be smart about this. Appreciate you listening, as always, and you can, of course, submit a question on my website, earlyretirementpodcastcom, if you, of course, want me to address a specific case study or topic. I will not promise I can get to it, but I respond to every single person and if I find it will be helpful for a lot of people, I will absolutely make an episode on it, at the very least give you some insight. That's it, thanks.