If you have the option to live anywhere in the United States upon retiring, where should you go? Of course, you’ll factor in many things from weather to where your family resides. However, don’t neglect to consider the financial aspect. This includes cost of living, tax considerations, part-time retiree jobs, and more. Here is some of the info to consider if you want to know how to retire well in Pennsylvania.
Pennsylvania Cost of Living
You definitely want to think about cost of living when deciding where to retire. After all, the more you have to pay out in annual living costs, the more money you’re going to need to retire well. According to Best Places, Pennsylvania is slightly below average on most cost of living factors.
Most importantly, the median home cost in Pennsylvania is only $173,700. That’s significantly lower than the country’s average, which is $231,200. On the Best Places Scale, a score of 100 puts you at average, so anything below that is good. On the housing costs scale, Pennsylvania is a relatively low 75.1.
Pennsylvania does score slightly higher than average on a few cost of living factors. Transportation and grocery costs are slightly higher there than the median for the United States. On the other hand, it’s slightly lower in Pennsylvania for health, utilities, and miscellaneous costs. On that 100 scale, Pennsylvania is at 92.5 overall. Therefore, it’s a good place for many people to consider if they want to retire well.
Tax Considerations in Pennsylvania
Of course, you don’t want to live in a state that has a low cost of living but terrible taxes for retirees. Luckily, that’s not the case for Pennsylvania. According to an article that cites Pennsylvania as a great place to retire, there are many tax benefits for retirees.
Most importantly, it is one of only two states that does not tax residents’ retirement income. All pension income is tax-exempt at the state level in Pennsylvania. That’s a huge factor to consider. It’s definitely a reason to think about for how to retire well in Pennsylvania. After all, this means that the more retirement income you can accrue before retiring in Pennsylvania, the better off you’ll be.
Other tax considerations for Pennsylvania retirees include:
- The federal income tax rate is low. It is a 3.07% flat tax rate. That’s actually the lowest in the United States!
- The state sales tax is 6% which is one of the lowest in the country.
- Moreover, food, clothing, and both prescription and non-prescription medication are tax-exempt in Pennsylvania.
- There are military tax benefits for members and their surviving families.
- Low-income home renters and homeowners can receive housing rebates in Pennsylvania that offset property taxes.
- If you leave an inheritance to someone in your family who is under age 21, then there will be no estate tax on that inheritance.
If you have a strong retirement income and can benefit from tax-exempt status on things like medication and food then you can retire well in Pennsylvania. There are also several other tax benefits to consider for low-income, military, and people intending to leave an inheritance to younger family members.
Best Pennsylvania Cities for Retirees
Lancaster, Pennsylvania was recently named by the US News and World Report as the fifth-best city for retirees out of the entire country. It ranked especially high in health care. In fact, high-quality health care is one of the most important reasons that people retire well in Pennsylvania. Obviously, as we age, we need more health care. With quality care plus tax-exempt status for medication, Pennsylvania really offers a lot in this area.
Pittsburgh, Harrisburg, and Allentown are also within the top 40 on this list. Do note that Pittsburgh does have a local tax on top of the state tax. Philadelphia is the only other city in the state that adds a tax like this. That’s certainly something to consider if you want to retire well in Pennsylvania.
In a list by the same organization on the best places to live in Philadelphia, Lancaster is number two behind Harrisburg. Pittsburgh, Reading, and York are also in the top five. While it’s important to look at factors specific to retirement, it’s also smart to consider all quality of life factors. Do your research when thinking about where you want to retire. After all, your retirement lifestyle is entirely up to you.
Part-Time / Retiree Job Opportunities in Pennsylvania
If you want to retire well in Pennsylvania then you might think about getting a part-time job. Do something that you love that will also earn you a little bit of extra income. The Bureau of Labor Statistics reports that Pennsylvania has an unemployment rate hovering around 7% which is just about 1% higher than the national average. Chief executives, financial managers, sales managers, and of course doctors and lawyers all do well in Pennsylvania. That said, if you’re ambitious and seeking employment, you should be able to find part-time work in the state.
How Much Money Do You Need to Retire Well in Pennsylvania?
Everyone has different retirement needs. Therefore, you need to figure out exactly what it means to you to retire well in Pennsylvania. Nevertheless, it helps to have some guidelines. Go Banking Rates says that the average annual expenditure for Pennsylvania retirees is a little over $52,000. They recommend a 20% “comfort buffer.” As a result, they suggest an annual retirement cost of between $65,000 and $66,000.
In order to figure out how much money you need to retire well in Pennsylvania, you have to consider how long you’re likely to live there after retiring. At the above rate, you’ll need $650,000 to retire well there for a ten-year period. Of course, you can factor in your retirement income, which might include retirement benefits, pensions, part-time work, etc.
Do you have tips for how to retire well in Pennsylvania? We’d love to know about them in the comments below!
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