People complain that CA is an expensive state to retire, but I wonder how many have actually done the math.
Yes, if you’re young and looking to buy, it’s expensive. And if you’re moving to CA for retirement, it’s also expensive (relative to other states/cities).
But… if you’re been here for 30 years and owned your home for that long, and saved decently, it’s really not that bad.
So you have the following compared to other states:
– lower property tax
– no tax on SSA income
– slightly higher income tax rate (for $60-100k taxable income) compared to states with taxes. Moderately higher for states w/o income tax: you’ll pay more in property tax/sales tax/or other expenditures for things that are not covered by taxes.
How many people are actually paying the higher 10-13% state tax rate in retirement? And if you are, you can probably afford to “retire” to another state and keep your SD property as a second property (espeically now that you can move your property tax base to another property).
So the key here is to reduce your taxable income by shifting as much to Roth before you get SSA. It does take a little planning ahead of retirement
