Podcast Episode 384: Is It Worth Moving to a State with No Income Tax in Retirement?
Many retirees make the decision to move in retirement but should no income tax be main reason for relocation? While it might save you money in taxes, the move might not benefit you as much as you think. In this episode of the Money Wisdom Podcast, Jake Doser, CFP®, CPWA® and Nicholas J. Colantuono, CFP® talk taxes in Massachusetts and Connecticut and the considerations that go into moving to another state in retirement.
The conversation is aimed at answering a question we recently received: Is moving to a state without income tax a wise financial decision? Let’s start with examining the broader picture of retirement, which is that while tax savings are important, they are not the only factor to consider. We need to understand the full scope of your financial situation, including income sources like pensions, Social Security, and rental income, and how these will be taxed both federally and at the state level.
Jake and Nick also emphasize the significance of lifestyle considerations. Moving to a new state can affect your quality of life in unexpected ways. We want you to have a vision for retirement that goes beyond finances. Factors such as proximity to family, access to healthcare, and community engagement play crucial roles in ensuring a fulfilling retirement. Loneliness and isolation are significant threats to retirees, underscoring the need for a supportive community.
We also discuss the nuances of state taxes in Connecticut and Massachusetts, providing a detailed comparison of tax rates and recent legislative changes that could impact retirees. For instance, Connecticut’s upcoming tax exemption for certain retirement incomes could influence decisions for those considering a move. Massachusetts already rolled out their Millionaires Tax, which retirees need to be aware of.
Ultimately, you’re best off when think holistically about your retirement plans, considering not only the financial benefits of living in a tax-free state but also the potential costs, such as higher real estate taxes or increased travel expenses to visit family. Retirement planning is a deeply personal process, requiring careful consideration of both financial and lifestyle factors.
To help you get started on your retirement journey, we offer a free resource, the “Are You Ready to Retire?” Starter Kit, available by texting KIT to 800-757-0436. This kit provides valuable tools to help individuals assess their readiness for retirement and plan accordingly.
Here’s what we discuss in this episode:
0:00 – Intro
0:52 – Reasons people move
2:47 – Ask yourself these things
3:59 – Taxes in Massachusetts
7:20 – Millionaires tax
9:51 – What to think about
Information presented in our podcasts is considered current as of the created date. Over time, some information presented may become stale. We recommend you consult with your Financial Professional before making any changes based on information contained here.
Johnson Brunetti is a marketing name for the businesses of JB Capital and JN Financial.
Investment Advisory Services offered through JB Capital, LLC. Insurance Products offered through JN Financial, LLC.
The guarantees provided by any type of insurance contract are based on the claims-paying ability of the insurance company.
Related Resources
-
Most Asked Social Security Questions
It’s no question that Social Security plays a crucial role in retirement planning, helping to provide a stable income stream for millions of recipients. In this week’s Better Money Boston with … -
Podcast Episode 402: How Often Should You Meet with Your Financial Advisor?
A good relationship between a client and their financial advisor relies on clear communication and regular check-ins to ensure everything is on track. In this episode of the Money Wisdom podcast, … -
Think Like the Rich
As you enter retirement, your financial focus shifts from growing your wealth to preserving your assets and generating income. In this stage of life, adopting the mindset of the wealthy can go a l… -
Leaving a Lasting Legacy
Estate planning can be a difficult yet necessary conversation to have with your loved ones. Everything from the distribution of your assets to your wishes regarding end-of-life care is up for disc… -
Are My Social Security Benefits Taxable?
If your total combined income exceeds certain thresholds, up to 85% of your Social Security benefits may be taxable. Understanding how Social Security is taxed can help you make informed decisions… -
Right Time for Social Security
Contrary to popular belief, waiting to claim Social Security until age 70 to get the maximum benefit is not the best decision for everyone. So, when is the right time? In this week’s Retire Wis… -
What is the Social Security Fairness Act?
You may have heard about the Social Security Fairness Act, which was signed into law on January 5, 2025. But what is it and who does it help? In this week’s Money Wisdom Question Series, Ian Fe… -
Finding Your Way on Taxes
Taxes can be confusing on any given day, but in retirement, they require even more attention and understanding. In fact, taxes are at the core of nine out of every ten conversations we have with t… -
How Can I Transition My Business Value into Money I Can Use?
Today’s question is a crucial topic for many of our clients who are business owners or have significant assets tied up in a business: How can I convert the value of my business into income for my … -
How to Effectively Plan for Healthcare in Retirement
As you approach retirement, the reality of rising healthcare costs becomes clearer. When planning for this significant expense, it’s important to consider all aspects – from prescription drug cost…
