Yahoo Finance These Are the 3 Best States for Baby Boomers and Their Money
Where you live significantly impacts your finances, especially after you retire and need to make your accumulated wealth last for years or even decades.
Check Out: 7 Places To Retire That Are Similar to Europe but Way Cheaper
Learn More: 4 Genius Things All Wealthy People Do With Their Money
Some cities and states are notorious for being expensive and may not be the best fit for if you’re on a budget.
To help you determine the best location for your golden years, we asked three certified financial planners (CFPs) which states are best for retiring boomers and their money. Here’s what they had to say.
Wealthy people know the best money secrets. Learn how to copy them.
Alabama
Cleve Gantt of Gantt Financial Advisors, LLC, resides in Alabama and fully endorses his state for budget-conscious retirees.
“Alabama has the second lowest property tax in the nation, behind only Hawaii,” said Gantt.
“Alabama does not tax Social Security benefits, federal government pensions, designated state government pensions or military retirement plans. In addition, traditional defined benefit plans and Railroad Retirement plans are also tax-exempt.”
Unsure where to start looking for housing?
Gantt explained, “Huntsville is a thriving technology center with some the nation’s most important military and space work happening there. Fairhope, in southern Alabama, annually makes the list of best places to retire in the nation. Gulf Shores and Orange Beach have some of the best beaches in the U.S. and are very popular for beach vacations.”
Georgia
According to Cecil Staton, president and wealth advisor at Arch Financial Planning, LLC, Georgia is another great state to consider retiring, particularly if you want to live closer to the coast.
“In many cases, it’s cheaper to live in Georgia than even Florida,” added Staton.
“Georgia has a retirement income exclusion on retirement income starting at age 62. Taxpayers 62 and older can exclude $35,000 of retirement income per year, and taxpayers 65 and older can exclude up to $65,000.”
Retirement income can include military retirement income, government-sponsored deferred compensation plans, IRAs, 401(k)s, pension plans, annuities, etc.
“In addition,” said Staton, “Social Security benefits are fully exempt from income tax in Georgia.”
Read Next: 4 Ways Baby Boomers Become ‘House Poor’ in Retirement
Hawaii
“Many Baby Boomers dream of retiring in Hawaii,” shared Daniel Masuda Lehrman, owner of Masuda Lehrman Wealth LLC.
Hawaii is considered one of the happiest and healthiest states in the country, with excellent healthcare and a long life expectancy. Unfortunately, living out your golden years on the island has a hefty price tag.
“It’s really tough to retire here if you don’t have sufficient wealth to sustain a comfortable lifestyle,” admitted Lehrman.
Hawaii’s housing costs are higher than most states. Plus, the state’s taxes rival those of New York’s.
However, Lehrman said, “Hawaii has one of the lowest property taxes in the country. [And] there are certain income tax advantages for retirees, such as Social Security being partially sheltered from state taxes.
“Government, military and certain employer-sponsored plans are 100% tax-exempt from state taxes if no employee contributions were made.”
When you factor in the potential tax savings, Hawaii may be more affordable than you once thought. Be sure to double (or triple) check your numbers before making the move, though.
Not interested in living in these states? Check out these cities that are becoming popular with Baby Boomers.
How Much Cash Do You Need in Retirement?
You know you need to stretch every dollar in retirement. But how much cash do you need to save to live comfortably?
The amount you should amass before ending your career varies based on your location and lifestyle. However, experts suggest hitting at least one of these financial milestones in your retirement savings account:
10-12x your current annual income
60-80% of your pre-retirement income (for the next couple of decades)
25x your projected yearly expenses
If you haven’t accumulated this amount yet, you may want to keep working for a few more years.
How To Preserve Your Nest Egg
Apart from choosing a wallet-friendly place to live, there are several things you can do to ensure you don’t outlive your retirement savings. In fact, you could continue to build wealth by working part-time and investing your earnings.
Before you quit your job for a well-earned retirement, pay off high-interest debt and make sure your emergency fund is full (and safely stored in a high-yield savings account). Delay taking Social Secuity benefits until as late as possible in order to get the maximum benefit amount.
Preserve your savings by maintaining a strict budget and avoiding unnecessary spending, like taking multiple expensive vacations, making pricey home upgrades or financially supporting an adult child.
More From GOBankingRates
This article originally appeared on GOBankingRates.com: These Are the 3 Best States for Baby Boomers and Their Money
