Best retirement states for lower property and income taxes specifically + climate consideration

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Sep 16, 2003
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Austin, TX MSA
There's a lot of things on the Interwebs about "Best states to retire in" or "Best places to retire" and there's lots of things that kind of delve into things that aren't truly important to me.

I know we have lots of retirement discussions around here but I'd like to steer this one in the direction of most interest to myself, of course, things can and do go off the rails around here, but let's try not get this locked with irrelevant content or petty bickering. Pretty please?

What I would like:
Low property taxes, or much lower property taxes than I have now. I am paying $12K a year property taxes in Texas on a roughly $500K property.
Low or no income taxes.
Little less intense summers than Texas, but not somewhere where it snows a lot or they put salt on the roads. Average temp above freezing Nov-Feb.
Somewhere with some geographical relief, i.e., not flat.
Not too expensive property, would like an acre or acres and a small house is fine in retirement, looking to buy in the $500-$750K range depending on current property value in 12-15 years.
Not too far from city conveniences - I'm ok being out of town but I don't want to drive two hours to the doctor or the grocery store.

Here is a list of states with no or low income taxes from 1/4/23

This site has both property and income taxes.

Most tax friendly as listed on the 2nd site:
Wyoming - Hard no. Too cold in wintertime. Unless there's some secret temperate spot in WY that I don't know about.

Nevada - Maybe northern, southern is a hard no due to intense summertime weather. Reno weather is maybe pushing cold limit. Low humidity which is a plus in the summer makes 90s temps not so hot. Good mountain views, which I love. I ski now but not sure I would in 20 years. Plus for being close to, but not in, California. Have lots of relatives in CA bay area but don't want to live there due to taxes and general frutiness. But I like to visit and reachable by car is a plus.

Florida - Hard no due to heat and humidity, uninteresting topography.

Tennessee - Very favorable in the eastern portion, probably my #1 choice so far. Mountains and lakes to enjoy. Johnson City TN highs not above 90 in any month, perfect. High temps only below 50 in December and January, average lows below freezing in Dec, Jan, Feb, pretty decent not great, park the cars in the garage so we never scrape ice. Chattanooga little warmer in both summertime and wintertime, 90.5 July with mean max of 97, but no average month below freezing lows.

Other considerations:
Alabama - Far north/northeastern, maybe. Alabama doesn't put income tax on pensions, which I will have. Tax rates vary by county but they seem to average around .33 per thousand. Property values relatively lower than other states. Huntsville AL weather average high July 91.5, Aug 91.3 which is ok not great, better than Texas at least. Mean maximum 97 July and Aug, ok if it's only 1-2 days a month. No month with average high below 50 or low below freezing, which is perfect. Hills and lakes to see.

Of the states with no/low income taxes not already mentioned
Texas-looking to leave. Too hot and crushingly high property taxes.
Washington - possible on wet side, and far away from Seattle. But I think properties are too expensive to consider. Dry side too cold in winter. I grew up in Oregon so that would be a pretty natural fit, but, the prices of real estate are high.
South Dakota - too cold
Alaska - no on many factors
New Hampshire - too cold, salt on the roads
North Dakota - 2.9% income tax - too cold
Pennsylvania - 3.07% income taxes - seen some really cheap nice properties there, but it would have to be in the farthest south possible and nearest to moderating temperatures, ie SE. Probably too cold even at that. And salt on the roads.
Indiana - 3.23 Income tax - too cold, has salt on the roads. I need my car to last in retirement.
Meat Chicken - 4.25% income tax - is this a joke? way too cold.
Arizona - 4.5% income tax - it'd have to be something high elevation in the north of the state. Maybe. Phoenix/Tuscon - hard no.
Colorado - 4.63% too expensive, too cold, too crowded, like visiting but I don't want to live there.

States with low property taxes not previously mentioned, less than $1000 per $100K of value
Hawaii - I'd rather go expat if I wanted to live somewhere tropical.
Louisiana - too humid, too 3rd world.
DC - too expensive, too cold
South Carolina - not sure, I'd have to do my research. Don't know much about it.
Delaware - see DC
WV - too cold
Arkansas - maybe would consider NW or other hilly region, need to look at climate charts.
Idaho- too cold
Mississippi - see Louisiana
New Mexico - seems like most of the areas I like are expensive, but would consider if it fit the budget and had views.

Expat - Common issue is being far from family in USA
Sao Paulo, Brazil or locations further south in Brazil. Wife is native, has dual citizenship, I could probably obtain it if I wanted. Wife's family is large. Cheap, low taxes, cheap property prices. Higher altitude locations preferred, more moderate weather. Crime is an issue in many Brazilian locations. In Sao Paulo and other medium to large cities - air pollution is prevalent at higher levels than most of the USA.
South of Spain - bargains to be found, exchange rate currently favorable but unknown in future, expat friendly
Balkan states - nice, cheap property prices, long term political stability unknown.

Other suggestions? Be honest about the costs and the climate.
 
Honestly, you've considered much. But I would say you need to also look at other factors. Income and property taxes are important, but what about taxes on investments, vehicles, etc? Some states take different approaches and tax that "income" differently. Also, what about sales tax? For example, TN has no income tax, but a fairly high sales tax. The reality is that between ALL applicable taxes, it's probably much more of a "wash" than you'd believe; they pretty much even out.

As for the rest (environment, topography, interesting things to do), that's completly subjective and you'll have to define those "wants" for yourself.
 
Sounds like you should just stay in Texas and keep paying your property taxes.

Where in Austin are you located ?
Some areas in greater Austin are very nice…. other areas not so nice with increasing homeless.

The Carolinas are nice and affordable. Not too cold and not crazy amount of snow or ice.
Maybe Tallahassee / Gainesville / Ocala, FL ?
 
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You also should look at what you might be giving up. Family, friends entertainment if you live a big city now. Wife and I thought about moving as property taxes and income taxes in NJ are considerable. When we thought of all the negatives we decided to stay here. If you cannot afford the taxes in retirement then your decision is made.
 
So how much do you like paying sales tax? If low property and income tax are your desires, guess what - the tax dollars are coming from somewhere... Better bet is to look at overall tax burden (if that's what is important to you) and evaluate how that works with what your situation will be...
 
Tennessee - Very favorable in the eastern portion, probably my #1 choice so far. Mountains and lakes to enjoy. Johnson City TN highs not above 90 in any month, perfect. High temps only below 50 in December and January, average lows below freezing in Dec, Jan, Feb, pretty decent not great, park the cars in the garage so we never scrape ice. Chattanooga little warmer in both summertime and wintertime, 90.5 July with mean max of 97, but no average month below freezing lows.
I would suggest Tennessee. It's a pleasant state with very low cost of living, it's very liberty friendly, very pro-gun, the people are generally friendly. None of the seasons are unbearable. Summers can get hot and muggy, but not terrible. Winters can see some freezing temps and snow but not much. Taxes are extremely low. Lots of nature things to do, like fishing, hunting, etc. Not any really big natural disasters, other than occasional tornado warnings and low land flooding. Any house should be built on a hill in a hilly area and have a basement. Outside of a few metropolitian areas of known crime, the rest of the state is very safe and crime free. Nashville is a relatively nice fun city. A house an hour away from Nashville would be a good place to start. Maybe look down near Cookville, SE of Nashville. Gets you close to the mountains as well.
 
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Quiet town with good year round weather. 5500’ elevation. Small town living, 25 miles to Sierra Vista (guessing around 30k population) and 20 miles to Douglas (guessing 6k population). 85 miles to Tucson. 5-6k population in Bisbee. Couldn’t afford Texas anymore. Property taxes very reasonable here. Gun friendly state, not unusual to see open carry at grocery stores etc. Excepting the monsoon season very dry here.
 
My wife's parents retired moving from NYC to Latitude Margaritaville Hilton Head, SC. They love it. Been there once and I have mixed feelings about it.
Is that the one with the wacky colored houses on top of each other? There's like 5 colors all mixed up. I looked at the one down there in "Low country". Didn't care for it. Low country is code for high humidity.
 
+3 on Tennessee.
That is where I would move if I left Austin. Just stay well away from Memphis. For a retirement place to live you would be well advised to check out how the health care situation is where you are looking.
 
I get the focus on taxes and temperatures and I can’t get past MeatChicken as a state. Took me a few seconds to get it.

But once you are settled into retirement somewhere other things (fulfillment, happiness, companionship, friendship and maybe family) will become primary. So what are your other interests? Unless for you it is only about cost of living and if so you have done a good bit of research already.
 
Is that the one with the wacky colored houses on top of each other? There's like 5 colors all mixed up. I looked at the one down there in "Low country". Didn't care for it. Low country is code for high humidity.

Those are the houses. One of the reasons why I have mixed feeling on them.
 
South Carolina - not sure, I'd have to do my research. Don't know much about it.
Well I am not much help but I can help with South Carolina.

Property tax varies WILDLY dependent on where exactly you live. Our sub is in the county only. Move my house a few miles in 2 directions and I end up in the "city" and pay 2.5X the property tax. I think this is pretty common - at least talking to my friends all over the Southeast - so you really need to look at specific properties to evaluate this - no online blurb is going to tell you.

SC has an income tax - its 6.5% top rate but it kicks in pretty early. It actually just dropped from 7% - small miracles.

Your county will tax your vehicle / RV / Boat annually. Really irks me.

Sales tax is 6.5% and is on almost everything. Cities and towns will add to that - I think for example Charleston and Columbia proper are 8% with all the adders.

Land isn't particularly cheap here, but with your budget you would have many choices.

Now some +'s - I love the weather. If your looking at the Appalachian end the weather is likely perfect for you. If you don' like the Humidity - avoid the coast. Makes much of Florida look like dry heat. Excellent healthcare, decent infrastructure, and at least the "Southern" raised kids still respect their elders.
 
Having spent some time camping in NE Alabama the last few years, I would say if we were going to move thats where we would look. I dont however see us going anywhere since its hard enough to get our sons to find time to visit and we are only 20-30 min from each of them now.
I am hoping for some income tax relief on my pension though. I retired in 2014 and the Gov in 2011 instated the income tax on pension where there hadnt been one before. Now our current Gov just got re-elected after promising in both her campaigns to repeal it. I believe it may have bi-partisan support this time unless she attaches a poison pill to it like she did 4 yrs ago.
Like Dnewton stated, you have to look at the overall. Compared to a lot of places my property tax isnt outrageous and our sales tax is still at 6%. Overall I think MI is somewhat competitive.
But.... there is that road salt thing (which is why my trucks currently in the barn and we are driving the 9 yr old car that has 120k on it)
 
Of the places you mentioned, I would go for the Reno area if you can afford a house. I spent three years there for a temporary job in the mid-2000s. Most of the snow we got melted off by noon except for one year, when there was about a foot that stayed around for a few weeks because of an inversion. I lived in a duplex with no A/C and didn't really suffer. There weren't too many days above the mid-nineties then, and it always cooled off at night. A lot of houses in the area had swamp coolers.

The Mt. Rose ski area is 30 minutes away. You can showshoe at Tahoe Meadows in 45 minutes. Year-round hiking possibilities are basically unlimited. If your philosophy is that it ain't worth seeing if you can't drive to it, the entire state is a scenic road-trip destination. Most of the roads, at least when I was there, were empty enough that driving was enjoyable. At the casinos in town, I saw such varied acts as Willie Nelson and Cirque du Soleil. Metallica played at the UNR campus arena. There's a drag strip and a road course within an hour or two, and the Hot August Nights car show every summer.

I also spent a few years in Northwest Arkansas. Winter there is pretty mild, but it does snow occasionally. That used to make a lot of Mustangs and Firebirds end up perpindicular on the sidewalks in Fayetteville. Summer is probably not Austin miserable, but you'll want to spend it in the A/C or out West. There's plenty of hiking and canoeing up there, but it takes a little longer to access compared to the Reno area, unless you buy further out in the country.
 
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