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How to Retire Well in Mississippi

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how to retire well in Mississippi

Whether retirement is on the horizon or you’ve already begun your post-workforce journey, choosing a place to settle down is a big decision. The state you select has a substantial impact on both how long your savings last and your overall quality of life. As a result, it’s a choice you don’t want to make lightly. If you think that Mississippi might be the right place for you, it’s crucial to examine several aspects of living there. If your goal is to retire well in Mississippi, here’s what you need to know about heading to the Magnolia State for your retirement.

Cost of Living

One of the first points you should look at when you are selecting a retirement destination is the cost of living in that area. By examining the cost of living metrics, you can compare one state’s affordability to both the national average and other states.

For simplicity, the cost of living score that represents the national average is 100. If a state ends up with scores above 100, it’s a sign that the state costs more than the national average. The larger the difference between the state’s score and the national average, in this case, the more expensive the state is in that category.

Scores below 100 usually mean affordability. The state costs less – either overall or in a specific category – than the national average. Again, the bigger the difference between the two scores, the more substantial the savings.

Mississippi is primarily known as a low-cost state. When it comes to the state’s overall cost of living score, it comes in at 84.8, meaning it costs far less than the national average. In fact, that score makes the Magnolia State the most affordable place in the nation overall.

When it comes to category scores, Mississippi is below 100 in each one. For groceries, the Magnolia State has a score of 93.0, and utilities come in at 92.8. Transportation and healthcare are also low, coming in at 88.5 and 88.4, respectively.

However, it’s housing where Mississippi really shines. In that category, the Magnolia State sits at 67.0, which is far below the national average and significantly lower than the state with the second-lowest score (Alabama with a 70.4).

The low housing score is further backed up by the average home value in Mississippi, which is $133,299. That’s almost half of the national average, which comes in at $266,222.

Tax Considerations

While Mississippi is certainly more affordable than nearly any other state, it is still a good idea to examine the tax implications of moving there. How much of your savings you have to direct to income, sales, or property taxes matters, as it impacts how long your money will last and how much you can pull out each year for retirement income.

Mississippi does have a state income tax. Like the federal government, the Magnolia State uses a bracketed system. Depending on your taxable income level, the rates range from 0 to 5 percent.

However, Mississippi does have deductions and exemptions that benefit seniors, reducing their tax burdens. Taxpayers over 65 can qualify for a $1,500 exemption, for example, that goes above and beyond the standard exemption, which ranges from $6,000 to $12,000 depending on your filing status.

Additionally, Mississippi doesn’t tax Social Security, Railroad Retirement, or Veterans’ Administration payments. Plus, if you’re at least 59 ½ years old, the Magnolia State doesn’t tax most other retirement distributions either, including income from 401(k)s, IRAs, public pensions, private pensions, and annuities. That means, if you mean the age requirements and rely solely on retirement plan-related income, you may not have to pay any state income taxes.

Now, Mississippi does have a sales tax. For most purchases, the base rate required by the state is 7 percent. However, cities can add up to 1 percent to that amount, potentially leading to as high as an 8 percent sales tax rate.

If you buy a home, you will have to contend with property taxes. Generally, the property tax rates in Mississippi are quite low, particularly since home values tend to be smaller. Plus, seniors can also qualify for an exemption worth up to $7,500, something that can substantially lower their overall tax burden.

Part-Time Job Opportunities

Many retirees remain as part of the workforce after leaving their main careers, working part-time to supplement their retirement income. It can make their savings last longer or may even let them stash more cash away, ensuring their later years are covered.

Generally speaking, part-time job opportunities are typically available in Mississippi. While the state historically has unemployment rates above the national average, they usually aren’t incredibly far above that line.

Now, Mississippi was hit hard by the pandemic, pushing the unemployment rate up to 16.3 percent in April 2020. That was higher than the national average at that time, which came in at 14.8 percent.

However, the Magnolia State did bounce back. By December 2020, the rate was closer to 6.2 percent. That was actually slightly below the national average for that month (6.7 percent).

Still, the situation does remain a bit fluid. Savvy retirees should assume that a part-time job search may take a little longer than it did before the pandemic. However, opportunities are likely available, so it might not take too much more time to land a position, depending on your field.

Best Cities for Retirees in Mississippi

Jackson could be a solid choice for seniors who want to be in a larger city. It’s the capital of the Magnolia State, so it’s brimming with amenities. Plus, the city has a lot of historical significance, and there are plenty of sites to explore. There is also a solid arts scene and excellent access to medical care.

If you prefer a small-town vibe, Brandon might be your ideal option. It offers classic charm, numerous parks, plenty of golf courses, and a great arts scene. Plus, it’s just six miles from Jackson, so you’ll still have access to city amenities, entertainment, and healthcare options.

Another option for historic charm is Aberdeen. It’s nestled along the Tombigbee River and is renowned for its Magnolia trees and gardens. Additionally, there are a variety of cultural attractions here, making it popular among seniors who enjoy the region’s history.

Hattiesburg is another option that should be on your shortlist. It has big-city amenities while maintaining a small-town feel. As the home of the University of Southern Mississippi, there are always intriguing opportunities to learn in the city. Plus, outdoor recreation is highly accessible, including through the numerous golf courses and area bike trails.

If you’re looking for something a bit unique, consider Natchez. It not only maintains its Southern charm, but it is also home to a range of events, including an opera festival and hot air balloon races. Musical and other kinds of festivals are also frequent occurrences, giving you even more entertainment options.

How Much Money You Need to Retire Well in Mississippi

With such a low cost of living, you can retire well in Mississippi for less. This can be a boon for retirees with limited retirement income or anyone who wants to enjoy the best in life without spending more than necessary.

Overall, if you have access to around $53,691 a year, you can live comfortably in the Magnolia State. Covering your needs shouldn’t be an issue, and you’ll still have money available for wants, too.

Do you have any tips that could make it easier to retire well in Mississippi? Share your thoughts in the comments below.

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If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started. Check out these helpful tools to help you save more. For investing advice, visit The Motley Fool.

 

How to Retire well in Massachusetts

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how to retire well in Massachusetts

Selecting a destination for your retirement is serious business. The state you choose has a direct impact on your quality of life, as well as how long your retirement savings last. That’s why it’s so critical that you take a close look at your options. If you’re hoping to retire well in Massachusetts, here’s what you need to know about the pros and cons of retiring in the Bay State.

Cost of Living

Taking a close look at a state’s cost of living scores before you choose it as a retirement destination is, in a word, wise. Cost of living metrics help you assess a state’s affordability. With the national average set consistently at 100, you can identify more expensive states by any scores above that mark. When a state’s numbers are under 100, it signals affordability.

Massachusetts’s cost of living is quite high. The Bay State has an overall score of 130.1 and doesn’t have a single category score below 100 either.

In the grocery category, Massachusetts comes in at 115.3. For utilities and transportations, the scores are 105.5 and 109.0, respectively.

Healthcare is one of the most expensive categories compared to the national, coming in with a score of 126.6. However, for housing, the Bay State scores at startling 169.6.

The high housing score is augmented by the average home values. While the national average is $266,222, Massachusetts comes in at $469,621. That’s a difference of $203,399.

Tax Considerations

Massachusetts does have a state income tax rate. The Bay State levies a flat 5 percent tax on most forms of income. However, Social Security is exempt, as well as income from many public pensions. Additionally, there are several other tax breaks available to many seniors.

For example, seniors may be eligible for a deduction based on their property taxes called the Circuit Breaker Tax Credit. If you’re at least 65, you can also qualify for a $700 exemption. There are also additional medical and dental exemptions.

However, income from IRAs, 401(k)s, and other retirement savings accounts is taxable. The same goes for non-public pensions.

When it comes to sales tax, Massachusetts has a flat rate across the state. It’s set at 6.25 percent and applies to most typical purchases.

Massachusetts property tax rates are generally reasonable. However, based on the average home values in the area, even a low rate adds up fast. Cities and towns may offer property tax exemptions to seniors, helping to lower the financial impact of owning property. Plus, as mentioned above, the Circuit Breaker Tax Credit helps offset some of the burden.

Part-Time Job Opportunities

Since many retirees plan on supplementing their retirement income with a part-time job, understanding the unemployment rate in Massachusetts is wise. It lets you estimate how challenging finding a position may be, allowing you to plan properly.

Like many parts of the country, Massachusetts experienced skyrocketing unemployment during COVID-19. In June 2020, the state peaked with a rate of 17.7 percent, a figure that was far higher than the national average’s peak of 14.8 percent, which occurred in April 2020.

While the situation is improving, the Bay State still has higher than average unemployment. As of December 2020, the rate was 7.4 percent. In comparison, the national average during that month was 6.3 percent.

Ultimately, finding a part-time job may be a bit more difficult in Massachusetts for a little while. Recovery takes time, and the Bay State is lagging a bit behind. However, before the pandemic, Massachusetts had lower than average unemployment, so it is possible that the situation will turn around.

Still, it’s wise not to assume that a part-time job will be immediately available. Retirees should ensure they have enough savings to initially handle their needs. That way, if it takes time to nail down employment, they’ll be financially secure.

Best Cities for Retirees in Massachusetts

Along with exploring what a state has to offer, you also want to take care when choosing a city to call home. Each city is unique, offering different costs of living, access to amenities, and entertainment options.

When it comes to affordability, Lawrence, Brockton, or Lowell a great choices if you want to be near Boston. Each qualify as one the most affordable suburbs in the area, allowing your savings to go further. Plus, you’ll be in close proximity to Boston and all of its amenities.

If you’re looking more in the Concord area, then consider Chelmsford. Real estate is cheaper in Chelmsford, which makes it easier for you to buy a homeowner during retirement. Plus, the town has a lot of charm and offers plenty when it comes to amenities.

Braintree can be another excellent choice. It’s near the South Shore and Blue Hills Reservation, is reasonably close to Boston, and has a vibrant small-town feel. Plus, while real estate is more expensive than the national average, it’s far below what you find in many major Massachusetts cities.

You may also want to put Pittsfield on the table. Again, it’s a more affordable option in comparison to the state averages, including when it comes to housing. There are also ample opportunities for outdoor activities like fishing, skiing, and hiking. Plus, it is close to several art museums and even an orchestra hall, making it a great choice for anyone interested in a lively arts scene.

How Much Money You Need to Retire Well in Massachusetts?

As a state with a higher cost of living, it does take more money to retire well in Massachusetts than it may cost in certain other areas. As a result, the Bay State may only be a solid option for retirees with a substantial amount of savings or who are willing to work to supplement their retirement income.

Generally speaking, if you have access to $82,217 a year, you should be able to have a reasonably comfortable retirement in Massachusetts. Handling your needs likely wouldn’t be a challenge, and you’ll be able to shoulder many wants, too.

Do you have any other tips that can help someone retire well in Massachusetts? Share your thoughts in the comments below.

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If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started. Check out these helpful tools to help you save more. For investing advice, visit The Motley Fool.

How to Retire Well in New York

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how to retire well in new york

When people envision their golden years, they typically picture an amazing life. But retiring well isn’t something that happens automatically. You need to choose the right place to settle and make sure that your financial situation supports your preferred location. If you’re hoping to retire well in New York, here’s what you need to know before moving there.

Cost of Living

Examining the cost of living in an area before you choose a retirement destination is a smart move. By looking at those metrics, you can gauge a state’s affordability at a glance. Since the national average is always 100, scores above that are a sign of higher costs, while numbers under 100 are a signal of affordability.

Overall, New York has an incredibly high cost of living. The Empire State’s overall score is 134. The only states that score higher are Oregon, California, and Hawaii.

Additionally, New York doesn’t have one category score below one hundred. Groceries come in at 113.9, while utilities and transportation are 100.2 and 105.5, respectively. For healthcare, the score is 101.2.

When it comes to housing, the Empire State’s score is 198.4. That metric is further supported by average home values in the state. While New York has an average home value of $347,339, the national average is just $266,222. That’s a difference of $81,117.

Tax Considerations

When it comes to taxes, New York is fairly retiree-friendly. Along with exempting Social Security and funds from many public pensions, the state also allows up to $20,000 in deductions for retirement income from private pensions, annuities, and common retirement accounts, like 401(k)s and IRAs.

Otherwise, any amount above the deduction is taxed at the typical rate. Overall, these vary between 4 and 8.82 percent, depending on your income level.

When it comes to sales tax, the Empire State has a base rate of 4 percent. Cities can add to that amount, pushing it up higher in many areas. For example, New York City adds 4.5 percent and also has a Metropolitan Commuter Transportation District Surcharge, putting NYC’s total rate at up to 8.875 percent, depending on the product or service category.

For property taxes, the base rates are actually quite low. However, with higher than average home values, even modest tax rates add up quickly.

Luckily, retirees may qualify for some exemptions that reduce their liability. While the programs do vary a bit depending on the city, seniors who are at least 65 years old may be able to reduce the taxable value of their homes by as much as 50 percent, depending on the senior’s income level and the property’s value.

Part-Time Job Opportunities

If you want to boost your retirement income by securing a part-time job, taking a look at New York’s unemployment rate is smart. Those metrics can help you estimate how hard it might be to find a position, ensuring you can plan properly.

Overall, New York is still reeling from COVID-19. The state was hit incredibly hard, and unemployment reached as high as 15.9 percent (July 2020). That’s 1.1 percentage points higher than the peak national average, which hit 14.8 percent in April 2020.

While New York has recovered a bit, the unemployment rate in December 2020 was still 8.2 percent. That’s far higher than the national average for that month, which came in at 6.7 percent.

However, the situation is likely continuing to improve. Still, savvy retirees shouldn’t assume they’ll find a part-time job fast. Instead, plan to rely solely on retirement income, at least initially. That way, you can ride out the economic recovery period.

Best Cities for Retirees in New York

When you’re choosing a city for retirement, you want to examine cost of living, lifestyle, and access to amenities. That way, you can live comfortably and enjoy your golden years, all without breaking the bank.

While every retiree’s personal preferences should play a role, some cities in New York stand out as great options. Great Neck and New Hyde Park can be an excellent choice, for example. Great Neck is on Long Island, while New Hyde Park is just outside of the NYC cities limits, so both are reasonably close to NYC. That means there are plenty of nearby entertainment options. Plus, it offers exceptional access to medical care and has a solid retiree population.

If you aren’t worried about being near NYC, then Fairport could be a great choice. It’s a suburb of Rochester, so it’s still near larger city amenities, including the University of Rochester Medical Center. Plus, there are numerous retirement communities and recreation centers.

Webster can be a stellar option for retirees who enjoy spending time outdoors. The area is home to North Ponds Park and Milton R. Case Park, each of which has many accessible trails. Plus, there are tons of recreation centers.

If you’re looking for a vibrant community, consider Warwick. The city commonly hosts festivals focused on food, art, and music. Plus, it’s close to Sterling Forest State Park, making it great for maintaining an active, outdoor lifestyle. The senior population is also large, so there are plenty of other retirees looking to enjoy the good life, and that could make connecting with people socially easier.

How Much Money You Need to Retire Well in New York

With such a high cost of living, retiring comfortably in New York means having access to a significant amount of retirement income. You’ll either want to have quite a bit in savings or be open to working after you leave your main career, giving you the ability to supplement your savings.

Overall, having around $98,825 a year is typically what it takes to retire well in New York. Along with covering your needs, that amount of income should handle some wants, too, ensuring you can have a quality retirement.

Do you have any other tips that can help someone retire well in New York? Share your thoughts in the comments below.

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If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started. Check out these helpful tools to help you save more. For investing advice, visit The Motley Fool.

How to Retire Well in Arkansas

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How to Retire Well in Arkansas

Choosing where to spend your golden years is a major life decision. It will impact every part of your life, including your finances, lifestyle, and general quality of life. This is why you should consider all aspects of life for retirees. Smaller states may not be appealing at first glance, but you may be surprised just how well you can retire in places like Arkansas. In addition to the mild climate and beautiful scenery, the low cost of living is drawing more retirees every year.

Cost of Living

An important consideration in your retirement years is the cost of living of where you decide to settle down. Your savings will stretch a lot further in cities with a lower composite score. The national cost of living standard score is 100. If the score exceeds this number, then the cost of living is above average. On the other hand, any score below 100 signals a cost of living lower than the national average.

When compared to the rest of the United States, Arkansas has a much lower overall score than most states. The Natural State’s composite score was 88.3 for the last quarter of 2020, ranking it the 4th lowest in the nation. In fact, Arkansas scored well below the national average in all categories. They are as follows:

Grocery 90.4

Housing 76.1

Utilities 91.9

Transportation 87.2

Health 86.6

Misc. 96.5

Although each marker indicates that Arkansas is lower by all measures, the cost of housing stands out from the rest. With a score of 76.1, housing will be much more affordable in Arkansas. To further illustrate this point, you only have to look at average home values. According to Zillow, Arkansas’ home value of $140,849 is nearly half the national average.

Tax Considerations

Before you choose any state as a final location, you need to familiarize yourself with their local tax laws. The amount of taxes will greatly impact your budget as well as your lifestyle. Choosing a state with more exemptions will stretch your savings, allowing you a more comfortable living.

The Cons

Like most states, Arkansas has a state income tax. And much like the federal government, it is bracketed based on your income. The scale ranges from 0.9% to 6.9% for those households earning more than $75,000. However, the effective tax rate is approximately 4.2% for individuals and 6.2% for joint earners.

Furthermore, the state taxes are some of the highest in the nation. The Arkansas state tax is 5.5%. But, localities can also levy an additional 5.125%. While most places do not reach the maximum limit, the state average is 9.3% sales tax according to the Tax Foundation.

The Pros

Although these figures make it appear tax-unfriendly, there are tons of exemptions that actually make it very affordable to retire well in Arkansas. First off, there are no estate, inheritance, or state property taxes. Since you only pay local property taxes, Arkansas is ranked among the top 10 states for lowest property taxes in the country. There is even a provision to maintain low taxation rates for the disabled and residents over 65. If you are in this group, the taxable assessed value on your home is capped at the previous year’s value. It only changes if you make improvements or sell your home.

Lastly, there are no taxes on Social Security benefits, military pensions, or railroad retirement benefits in the Natural State. You can also exclude up to $6,000 for local and state government, civil service, and private pensions. Pensions from other state governments are also included in this exemption. Moreover, the funds can be part of a public or retirement system. This is in addition to the exemptions allowed for IRA and 401K contributions as well.

Part-Time Job Opportunities

Many retirees do not plan to fully leave the work force. Instead, some choose to reduce their hours or find part time jobs. There are a number of reasons people choose to work during their retirement years. Whatever the reason, it is an effective way to supplement your income and stretch your retirement savings.

Depending what kind of work you are looking for, Arkansas has many employment opportunities. However, the state suffered high unemployment rates when the coronavirus began to spread in April 2020. To the state’s credit though, even when unemployment rates peaked at 10.8%, it was well below the national average of 14.7%.

Since the initial outbreak, employment rates seem to be stabilizing. As of December 2020, the unemployment returned down to 4.2%. This is barely 1% higher than the pre-pandemic numbers. While others states are showing increasing unemployment rates, Arkansas is trending in the right direction.

Keep in mind that even with this positive projection, nothing is certain. As we continue efforts to contain COVID-19, the situation remains fluid. So, it is best not to bank on part-time income as a means to support yourself through retirement in the immediate future.

Best Cities for Retirees in Arkansas

The city you choose to retire to is almost more important than the state. This decision will affect access to health care, amenities, entertainment venues, and your overall lifestyle.

If you prefer the convenience and fast-paced life of the big city, Little Rock has a lot to offer. With a population just under 200,000, there is a great deal of diversity and things to do. There are plenty of parks, restaurants, and museums to explore. Recently, more young professionals and families have also moved to the area as well.

The Hillcrest neighborhood in particular receives glowing reviews. This suburb of Little Rock offers all the conveniences of the big city with the charm of historical architecture for which it is famous.

However, if you are more interested in Arkansas’ planned communities, you should really take a look at Hot Springs Village. In the country’s largest gated community, you have access to lakes, biking and hiking trails, tennis courts, nine golf courses, and its own swimming pool. It has its own medical facilities and school system for those in the community as well.

Apps You Need to Prepare for Retirement

Here are some retirement apps you can use in order to prepare for retirement. You need money for retirement and one of the ways to have that is to save by using these apps.

AppFees and MinimumBest for:
Betterment0.25% per year
no account minimum
Saving for retirement
Ellevest$1-$9 per month
no account minimum
Retirement especially for women
Personal CapitalFreePlanning retirement

How Much Money You Need to Retire Well in Arkansas

When put in a side by side comparison with other states, Arkansas is one of the most affordable places to live. Although sales and income taxes are relatively high, the tax exemptions on pensions and retirement income make it a viable option.

Based on calculations by gobankingrates.com, a person could retire well in Arkansas with approximately $55,910. This would cover all your necessary expenses and provide a buffer in case of emergency expenses. Based on these facts and figures, you do not need to be a millionaire to retire well in Arkansas.

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Retire Well in Hawaii With These Tips

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For many people, the idea of retiring to Hawaii would be a dream come true. It’s a quintessential destination for your golden years, offering up beautiful landscapes, breathtaking beaches, and plenty of activities. However, choosing the right destination means looking deeper. Retiring well in some areas is trickier than others, especially if the cost of living is high and access to certain amenities may be limited. If you’re wondering how to retire well in Hawaii, here’s everything you need to know.

Cost of Living

Before you settle on a retirement destination, it’s crucial to spend a little time looking at the state’s cost of living scores. These handy metrics help you gauge a region’s affordability, allowing you to estimate how far your money would go in one state when you compare it to others.

When you’re looking at cost of living scores, it’s helpful to keep in mind that the national average is always, and will forever be, 100. States that have scores higher than 100 are more expensive than the national average, while states with lower marks qualify as more affordable.

Overall, Hawaii has the highest cost of living scores in the entire country. The Ahola State’s overall score is 199.1, which is 39.1 points higher than second-place Washington D.C.

Additionally, Hawaii doesn’t have a single category score below 100. For groceries and utilities, the Aloha State comes in at 168.9 and 198.5, respectively. Transportation is a starting 142.4, while the state’s lowest score, which is in the healthcare category, is 115.2.

While those scores may seem incredibly high, they don’t hold a candle to Hawaii’s housing score. That comes in at 339.2, showcasing just how expensive housing can be on the islands. That score is 63.4 points higher than Washington D.C.’s housing score, and 140.8 points above New York’s.

That point is reinforced by the state’s average home value of $673,344. That’s $407,240 above the national average, which sits at $266,104.

While you might assume that means Hawaii’s homes are of a higher quality, that isn’t necessarily the case. Instead, two comparable houses – one located in Hawaii and another in an area that aligns with the national average – simply cost different amounts because of where they are located.

Tax Considerations

When you are selecting a retirement destination, it’s smart to look beyond the cost of living and pay special attention to tax rates. How much you’ll need to spend to cover your taxes has a substantial impact on your retirement. Higher tax rates means more of your savings has to go to covering that expense, while lower rates allow budgets to stretch further.

Hawaii does have a state income tax. Like the federal government, the Aloha State uses a bracketed system, with rates ranging from 1.40 percent to 11 percent, depending on a person’s income level.

Luckily, retirees don’t have to pay income taxes on Social Security. Additionally, public pension income isn’t subject to taxation.

All other types of retirement income are typically taxable. This includes private pensions, 401(k)s, IRAs, and other retirement vehicles. For taxable retirement income, the traditional state income tax rates apply. However, seniors do qualify for a larger income tax exemption, lowering the burden slightly.

Hawaii doesn’t have a state sales tax. However, the Aloha State does have a general excise tax (GET) that does impact consumers. The GET reaches as high as 4 percent, depending on the purchase category. There can be additional surcharges as well, pushing the effective tax rate a bit higher in many areas.

However, even with the surcharges, the tax rates are relatively low compared to many other states. Typically, you won’t see a rate above 5 percent no matter where you shop in Hawaii.

For property taxes, seniors do qualify for some exemptions that reduce their financial burden. The exact amount can vary depending on the homeowner’s age and the county where the home is located. For example, in Kauai County, seniors can receive additional exemptions worth up to $200,000.

Part-Time Job Opportunities

Retirement doesn’t always mean calling it quits on the workforce as a whole. Instead, many seniors simply pivot, embracing part-time jobs that can supplement their income, keep them active, and more. This helps many seniors to retire well in Hawaii.

While, for some seniors, a part-time job may mostly be about staying social and engaged, for others, having one is a financial necessity. That’s why understanding the job market in the state you want to retire to is so crucial.

When it comes to part-time jobs in Hawaii, they are traditionally fairly available. Pre-COVID (March 2020), Hawaii’s unemployment rate was a mere 2.4 percent, a full 2 percentage points below the national average at that time (4.4 percent).

However, when COVID struck, Hawaii was hit hard. The unemployment rate in the Aloha State skyrocketed to 23.8 percent in April 2020, while the national average for that month was 14.8 percent.

While it’s true that the situation has calmed, unemployment is still a far cry from pre-COVID levels. As of December 2020, Hawaii was sitting at 9.3 percent, which is 2.6 percentage points above the national average for that period (6.7 percent).

Overall, part-time job opportunities may be harder to come by in Hawaii for a while. Much of the economy is dependent on tourism, an industry that ground to a halt during the pandemic. While states are moving toward recovery, it may take time for the travel industry to recover. Until then, it may be best to assume that part-time positions aren’t as readily available and to plan to live on savings until the situation improves.

Best Cities for Retirees in Hawaii

When you’re retiring, the city you choose as your new home plays a big role in your quality of life. Not only may it impact your budget, as different areas can have different costs of living, but it affects your access to amenities and your overall lifestyle. After all, each town will have a unique vibe, and some may better suit your needs than others.

For retirees who want to be close to a big city without living in one, Kaneohe, Oahu could be a perfect option. It’s near Honolulu, as well as being close to the Koolau Mountains, beaches, and more. The nearby bay is a favorite among locals and tourists alike, offering up a range of recreational activities to those who like being outdoors.

If you want to spend your retirement golfing, try Kailua-Kona, Big Island. Along with several fantastic golf courses, the town is oceanside, with a fun downtown area that’s great for shopping or strolls. Plus, it’s near Kaloko-Honokohau National Park, which is excellent if you want to stretch your legs outdoors.

Additional Places to Retire in Hawaii

Another Big Island option is Hilo. It’s got a lower cost of living than many other Hawaiian cities, which could be a boon for budget-conscious seniors. Plus, it has an amazing zoo and botanical gardens, and is near Rainbow Falls.

To retire well in Hawaii, retirees who have their sights set on Maui, consider Paia. The town is a bit tucked away, so it isn’t overrun with tourists. Plus, it’s full of quirky art galleries, quaint shops, and outstanding restaurants, all while staying within walking distance of the beach.

Kahului is another option on Maui. It’s the island’s largest city, offering up great amenities, beaches, parks, and more. Plus, comparatively speaking, Kahului is fairly affordable.

If you prefer a country feel, Lihue, Kauai may be your best bet. It offers a small-town feel and a relaxing atmosphere while also being a great option for anyone who loves the outdoors thanks to its proximity to hiking trails.

How to Retire Well in Hawaii-Financial Requirement

With Hawaii being the highest cost state in the country, you’ll need more money available if you’re going to retire well in Hawaii. While the city you choose can have an impact, generally speaking, you’ll need $125,259 in annual income to be comfortable. That will allow you to handle your needs, as well as some wants, ensuring you can enjoy your retirement instead of merely surviving it.

What are your tips on how to retire well in Hawaii? Share your thoughts in the comments below.

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How to Retire Well in New Mexico

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how to retire well in Mexico

One of the biggest choices you’ll ever have to make is deciding on the best place to retire. The state you choose will play a major role in your quality of life during your golden years. Additionally, it may alter the amount of time your existing retirement savings will cover. While New Mexico may not be a conventional destination. The Land of Enchantment does have a ton to offer retirees. Plus, it’s more affordable than many other states. Which is something that could be crucial for budget-conscious seniors. If you’re wondering what it would take to retire well in New Mexico. Here’s everything you need to know.



Cost of Living

Taking a look at a state’s cost of living is a great starting point when you’re trying to decide which is the best place to retire. Cost of living scores give you a solid idea about a state’s affordability. Not only can you compare the metrics to the national average with ease. You can also use the scores to determine if one state is a better fit for you than another.

As a quick overview of how the scores work. It’s important to understand that the national average is permanently and forever set at 100. If any state ends up with a score below 100. This means it is costs less there than the national average. For scores above 100. The state is more expensive than average.

New Mexico has an overall cost of living score of 88.7. That makes the Land of Enchantment one of the most affordable states in the nation.

When it comes to common spending categories. New Mexico does well across the board. Groceries and utilities are generally viewed as affordable. The same goes for transportation and healthcare.

Additionally, most would consider New Mexico’s housing costs quite reasonable. The median home value in New Mexico is $224,374. That makes it $41,730 lower than the national average, which sits at $266,104.

Tax Considerations

Cost of living isn’t the only metric you need to examine when choosing a retirement destination. Looking at a state’s tax rates is also a smart move.

The amount of money you’ll owe in taxes has a major impact on your overall budget. When tax rates are high. That can create a substantial financial burden that could alter your quality of life. With lower tax rates, less of your savings needs to go to that cost.  Thus, allowing you to spend more on your needs and wants instead.

New Mexico does have a state income tax. Like the federal tax system, the Land of Enchantment uses brackets. Depending on your income level. Your tax rate can be as low as 1.7 percent or as high as 4.9 percent.

However, for 2021 taxes, a new bracket is being introduced. High earners – individuals who have income above $210,000 and couples that file jointly with income above $315,000 – will be subject to a 5.9 percent tax rate.

Retirement Income Is Taxed

It’s important to note that New Mexico does tax retirement income, including Social Security. However, many lower-income seniors can qualify for a deduction that reduces this overall tax burden. The income tax break can reduce taxable income by up to $8,000. Additionally, the Land of Enchantment offers exemptions and credits for qualifying medical expenses, the value of which depends on the total amount paid and whether the costs were unreimbursed or uncompensated.

One interesting tidbit about New Mexico is that anyone aged 100 or older who aren’t classified as someone’s dependent is actually exempt from all New Mexico personal income taxes. That exemption applies regardless of the person’s income level.

New Mexico does have a sales tax as well. The base state sales tax is set at 5.125 percent. However, cities and counties can levy additional taxes, pushing some local rates above 9 percent.

New Mexico does offer some property taxes breaks and programs that can also help seniors. For example, the property valuation freeze can make homeownership more affordable for low-income retirees who are at least 65 years old.

Part-Time Job Opportunities

For many seniors, retirement isn’t a time where they completely leave the workforce. Instead, transitioning into a new part-time opportunity is incredibly common.

At times, a part-time job is a financial must. It allows any retirement savings to last longer as that income is bolstered by traditional wages or freelance contracts. For others, working is a way to stay active physically, mentally, or both. It can also provide a much-needed social component.

When it comes to part-time jobs in New Mexico, positions are often reasonably available. While unemployment rates pushed up during COVID-19, reaching as high as 12.7 percent in July 2020, the rate is now declining.

As of November 2020, the unemployment rate in New Mexico was back down to 7.5 percent. Now, this is still a far cry from the pre-COVID rate of 4.8 percent, and it is also above the national average for that period, which came in at 6.7 percent. However, it shows the rate moving in the right direction.

Still, retirees may want to prepare for some potential challenges if they head to New Mexico during the first half of 2021. The COVID-19 pandemic situation is still incredibly fluid, and circumstances could change unexpectedly. As a result, it may be better to assume that finding a part-time job right away won’t be easy and plan on initially relying on savings until the pandemic resolves.

Best Cities for Retirees in New Mexico

When you’re planning your retirement, the city you select matters. In most cases, the town has a major impact on your overall quality of life, especially when it comes to accessing critical amenities. Plus, every city has a unique vibe, and some may better suit your preferences than others.

Ultimately, New Mexico has plenty of great cities for retirees. Here are a few you may want to start with if you aren’t sure which ones to consider.

For some retirees, Taos may be the perfect destination. It’s near the Rio Grande Gorge, so the area has a lot to offer when it comes to outdoor recreation. Plus, it’s brimming with amenities and has a sizable senior population, both of which may improve your quality of life.

More Affordable Cities

If you’re looking for one of the more affordable cities, Placitas might be a great option. Its tax rate is a bit lower, so less of your money will need to go toward those expenses. Additionally, the city is near Albuquerque, giving you quick access to a larger metro area.

While Silver City is considered a college town, it can still be a great option for retirees. There’s a vibrancy here that many seniors would appreciate, as well as a stellar arts and music scene.

If you’d prefer a larger city, Santa Fe is a solid choice. New Mexico’s capital has plenty to offer, including a lot of amenities and entertainment options. It’s also a popular tourist destination, so it may be easier to convince family and friends to head out for a visit.

How Much Money You Need to Retire Well in New Mexico

Overall, New Mexico’s cost of living is fairly reasonable. As a result, you can retire comfortably even if you don’t have access to a ton of retirement income every year. This is especially true if you select cities that come in below the state’s cost of living averages, allowing you to spend even less.

Typically, if you can access around $55,276 a year in retirement income, you can retire well in New Mexico. You’ll be able to cover all of your needs without much issue, providing you with plenty of peace of mind. Plus, many of your wants are potentially affordable, too, ensuring you can have a kind of retirement that’s at least close to – if not an exact match to – what you envisioned.

 

Do you know of any other tips that can make it possible for someone to retire well in New Mexico? Share your thoughts in the comments below.

 

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