Moving Out of Maryland

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Why do you need to move whe yo uretire, as opposed to now? Most people have lower income in retirement (since they aren't working) so income taxes, which are high in MD, are less of a concern.

The nearest state to here with no state income tax is TN and it's about 8 hours drive from MD to Knoxville, TN. Delaware and PA both do have state income tax.

MD has county income tax everywhere. If you're on a fixed income, that can be a burden.

Or you can move to part of MD with lowest county tax or buy a second place there and use as primary address. MoCo has high county taxes.

The counties that have < 3% income tax rate are depressed and doesn't have much culture or diverse restaurants. Might as well move to WV.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My financial advisor tells me I need to move out of Maryland/Montgomery County in retirement because of the tax burden. I understand this in theory but why move to a place with no culture and away from my children just to save on taxes? Is this standard practice? Has anyone here done this and been happy? Where did you go?

A) do you really think that the only place(s) with lower taxes have no culture?
B) how do you know your children will stay here?

I hope they mean the culture they are used to is here. Because, I can assure you that the arts culture in the Triangle area of NC (meaning the music created there, artists who live and work there in visual arts, ceramics, writing, etc.) is far more prolific than that of the DC area where artists can't afford to live.

Great, assuming that you already have family/friends there.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here. I am not trolling. I am not weird. Culture can be as simple as many interesting dining options for me. True, I saw all museums 10x already and I actually have grown to dislike DC proper. Unless one is rich, the options outside of Maryland are quite boring. Gettysburg PA, no thank you! I really have grown to dislike DCUM as well.

yet, here you are ... still on dcum and in MD.

+1…yes whatever do you mean?…I live for the pettiness and mess that is inherently DCUM…these are like my bedtime stories before I go night night. 😝

[Anonymous]

Anonymous wrote:Your children may find that MD is too expensive and move elsewhere. You never know where your adult kids will end up.

Spouse's siblings ended up on two different continents to the parents.

My siblings and I ended up in 4 different states. Only one lives near to parents.

A lot of places in the country are wildly expensive. I just met someone from a small town in Utah who can't afford a house there, so they're moving to Ohio. My family was considering moving to Wisconsin recently for a job and believe me, houses in good school districts there are as pricy as they are in much of Montgomery county. Maryland isn't that much more expensive than a lot of places anymore.

[Anonymous]

^^^very true

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Why do you need to move whe yo uretire, as opposed to now? Most people have lower income in retirement (since they aren't working) so income taxes, which are high in MD, are less of a concern.

The nearest state to here with no state income tax is TN and it's about 8 hours drive from MD to Knoxville, TN. Delaware and PA both do have state income tax.

MD has county income tax everywhere. If you're on a fixed income, that can be a burden.

Or you can move to part of MD with lowest county tax or buy a second place there and use as primary address. MoCo has high county taxes.

The counties that have < 3% income tax rate are depressed and doesn't have much culture or diverse restaurants. Might as well move to WV.

But if you stay in state no one is tracking you.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Why would someone move to a place where they didn't know a soul , just to save a few bucks? It could take years to make up the sunk costs of moving as well.

states with no income tax is saving more than a few bucks.

Those states have to get the money from somewhere and it’s usually very high property tax, as well as a higher sales tax that is applied to everything.

Delaware is very tax efficient because the state earns a ton of $$$s from all the incorporation fees for all the companies technically based in DE but no physical presence. That allows them to have no sales tax and fairly low property and income tax.

You can run this by your AI. There are definitely clear financial advantages to certain states when factoring in all the different types of taxes and insurance. Florida still comes out ahead. Especially the more affluent you are. Maryland always ranks among the more tax burdened states.

OP clearly has reasons for staying in MD, so she should.

[Anonymous]

My hot take is that you should live where you want to live.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The state inheritance tax can be an issue for wealthy people. I would move at some point if I lived in Maryland if you stand to leave a larger estate over $5 M.

$5M per estate or $5M per person!

It is $5m per person and is transferable from one spouse to another so for a married couple it is $10m (the unused portion of the first spouse to die passes to the surviving spouse). For most people this will mean no estate tax. We are over the $10m level but part of that is a house in another state and that is in a separate trust so won't count against our MD limit. There are other ways to pass assets more directly so worth consulting an estate lawyer if you are over $10m. We plan to keep our primary residence in MD despite the estate taxes, but that could change as we get older and our kids settle elsewhere.

[Anonymous]

Anonymous wrote:My financial advisor tells me I need to move out of Maryland/Montgomery County in retirement because of the tax burden. I understand this in theory but why move to a place with no culture and away from my children just to save on taxes? Is this standard practice? Has anyone here done this and been happy? Where did you go?

So Montgomery County Maryland is the only place in the country with "culture"?

[Anonymous]

OP, have your used online financial calculators yourself to see where you stand?

A CPA doesn't necessarily know your total financial picture, where a FA will.

I am wondering if your FA thinks you will run out of money based on the expenses you will have in retirement. Taxes on Required Minimum Distributions are no joke for many people who have saved much of their retirement in tax deferred accounts.

If you haven't already, run Firecalc and cFireism, to name just two online calculators. This will help you better understand your financial situation. And if you haven't had FA run your projected taxes on your RMDs, then get that done.

[Anonymous]

Anonymous wrote:I hate posters like OP.

Why? Seriously curious. (Not OP.)

[Anonymous]

OP's title should be "Moving out of MoCo" not Moving out of Maryland

[Anonymous]

Anonymous wrote:A lot of DCUM retirees move to Delaware.

many of them voted for our president.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Your children may find that MD is too expensive and move elsewhere. You never know where your adult kids will end up.

Spouse's siblings ended up on two different continents to the parents.

My siblings and I ended up in 4 different states. Only one lives near to parents.

A lot of places in the country are wildly expensive. I just met someone from a small town in Utah who can't afford a house there, so they're moving to Ohio. My family was considering moving to Wisconsin recently for a job and believe me, houses in good school districts there are as pricy as they are in much of Montgomery county. Maryland isn't that much more expensive than a lot of places anymore.

I disagree in retirement- My spouse and I will have two large FERS pensions (total about $175K per year), and 8% income tax on that is excessive. We are looking at Philadelphia, Raleigh, Asheville to retire.