Yeah. I like Fidelity, but their articles and such are pretty weak, IMHO
Fidelity's effective tax rates on IRA withdrawals by state
- Thread starter gfh77665
- Start date
I don't believe that? What exactly are we talking about. I have lived in several states, some supposedly low tax, some supposedly high tax. My personal experience is in the end they get you one way or another - if its not income tax its property tax or vehicle registration or sales tax on everything or whatever. Except maybe CA or NY - they seem like they have taken taxation to a whole new level.
Also, I think the primary reason for retirees is either going to be weather or near their children.
As I already disclosed, its not all encompassing, its one data point, but an important one. The overall cost of living state to state matters the most. Nothing is cherry picked. I was exceedingly clear it was one data point, among others. Fidelity is a good source.
edyvw
$50 site donor 2025
That is my point. Many make decisions that are based on income tax primarily, just to find out that they get it some other way, or the trade-off in quality of life was not worth it.
As for retirees, there are too many variables. Like you said, some want to be closer to children/grandchildren, some want warmer weather etc, etc.
It’s not a significant data point, though.
Who is taking out $100,000 every year from an IRA? If you check the RMD tables, that presumes an IRA balance of several million.
So, to whom on this board does this apply?
To whom across America does this apply?
What about a more typical IRA withdrawal at a slightly lower level?
What about a Roth? 401(k)? Roth 401(k)? Taxes on SS? Taxes on military pensions?
Taxes on your home? Other personal property? Homeowner Insurance rates? Vehicle insurance rates? Electric and utility rates.
That’s the cost side. Most of the actual, total costs that vary from state to state are ignored.
This “chart” ignores the benefit side, as well. Amenities? Climate? Recreation? Earning potential?
So, doing a cost benefit analysis that ignores most of the cost and all of the benefits isn’t particularly useful.
Or even very interesting.
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I will bet you if most people understood what they actually pay in all taxes as a percentage of their income, they would be astonished how high it is.
I just got a letter from the local water district. Monthly fee is being raised by 20% and usage by 10% per whatever to account for "growth in the community". Its gone up every year for the last 5, but not this much.
So lucky me, roads are crowded, schools are over crowded, yet counsel keeps allow development. All kings want a larger kingdom. I thought we did away with this in 1776.
I would move but I am am having trouble finding places any better.
4WD
$50 site donor 2025
I hope property taxes freeze - but the cost of the property is not terrible here …
https://www.houston.org/houston-data/housing-cost-comparison
https://www.houston.org/houston-data/housing-cost-comparison
In fairness, the article title is specific "The best states to retire for taxes"
Its from Fidelity, so its targeted at high net worth individuals. They might very well have 5 homes and do actually withdraw $100K a year, and so might choose their state of residence based to some degree on taxes, irrelevant of where they hang their actual hat.
Relevant for the average person - probably not.
But it’s really not the best state in which to retire for “taxes“ it’s the best state to retire for those who have a high IRA balance, RMDs at the $100,000 level and absolutely zero concern for things like property tax or income tax.In fairness, the article title is specific "The best states to retire for taxes"
Its from Fidelity, so its targeted at high net worth individuals. They might very well have 5 homes and do actually withdraw $100K a year, and so might choose their state of residence based to some degree on taxes", irrelevant of where they hang their actual hat.
Relevant for the average person - probably not.
So, yes, if I owned no cars, no house, no other assets, and also had no income, no other investments, then this chart might be of interest to me…
Making it largely irrelevant.
If you put the retirement tax chart with this one it will give you a pretty good idea of the total state tax burden.
https://www.visualcapitalist.com/visualizing-the-tax-burden-of-every-u-s-state/
https://www.visualcapitalist.com/visualizing-the-tax-burden-of-every-u-s-state/
4WD
$50 site donor 2025
Yep, and low crime …
These are clearly disingenuous questions. What you ask no one could answer. I have no idea "who on BITOG or who in America it applies to". Also, 300 Million Americans do not share their personal info with me. Nor do I know "what about climate, amenities, recreation and earning potential' or any other "side benefits' that may or may not exist for everyone.
You are staff. Its easy, just delete the thread if its so irrelevant, and you dislike it so much. Please.
edyvw
$50 site donor 2025
There is nothing disingenuous about the questions.
Those questions, which are rhetorical, merely point out the inadequacy of this analysis.
They point out how limited the scope, how narrow the question, that was answered.
As a staff member, I moderate behavior, not content. People are free to post all sorts of things that I find specious, pointless, or poorly thought out.
As long as they are within the guidelines of behavior, they stand.
I do reserve the right to comment on those things.
A lot of people that moved to the Austin and other parts of Texas during the pandemic moved back to CA based solely on the weather.
edyvw
$50 site donor 2025
As someone who lived in San Diego and still has place there, it is very, very hard to beat that climate.
I can tell you that the 7.6% state tax burden for Texas is pretty much fiction for me. I'm several percentage points higher than this on property taxes alone, this is for probably the cheapest 2500 square foot house that can be found within 5 or so miles from my location. And then the sales tax here is 8.25% on non-food items.
Now, you do get to write both off your federal 1040, but you're really only saving say 10-20% on the dollar based on what your effective federal tax rate is.
SC claims 7.5%, I don't know where these numbers come from. SC has a 6.2% income tax after the first $17,000 in income, and a 6% sales tax, but just about every county and city have their own sales tax so its usually 7% and 8%+ in the cities.
Thats not even getting to any property or other taxes.
I would be a dead lizard in the sun in Texas. On the road. Dead
I had to visit a gas regulator company in in San Marcos. Hottest day ever recorded there 116° or something yeah dead no. The asphalt felt like walking on a Temperpedic mattress. Oh hell no
I had to visit a gas regulator company in in San Marcos. Hottest day ever recorded there 116° or something yeah dead no. The asphalt felt like walking on a Temperpedic mattress. Oh hell no
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