Read these 6 Affordable Places to Retire Tips tips to make your life smarter, better, faster and wiser. Each tip is approved by our Editors and created by expert writers so great we call them Gurus. LifeTips is the place to go when you need to know about Retirement tips and hundreds of other topics.
When looking for an affordable place to retire, find out how property is taxed. Learn what type of property is taxed, what the tax rates are, and what the exemptions are. For instance, Florida has no income tax, but in addition to a high sales tax there is an intangible personal property tax that taxes a person's investment portfolio. So it might not be the cheapest place to retire. Watch out for local income taxes. States can levy income taxes either at the state, county, or city level.
The biggest consideration in finding an affordable place to retire is housing. A good rule of thumb is to assume your housing costs will probably consume at least 30 percent of your expenses. When looking for a cheap place to retiren consider that even though most mortgages have been paid off by retirement age, taxes and upkeep will increase. Studies have shown that households made up of individuals over 65 will decrease expenditures in nearly every other area by a larger percentage than they will on housing.
The search for an affordable place to retire is best carried out systematically. Make a list--a very long list--of cheap places to retire and prune it down to about ten choices. Now, write to the chambers of commerce and tourist bureaus for each of those cities. You can get tons of information this way about amenities, weather, activities, housing... and the information is free!
Looking for an affordable place to retire is a good idea, even if you think you have plenty of money to retire on. Remember, you will have to contend with illness and other problems associated with aging. A cheap retirement means planning for problems you wouldn't even think about during your younger years. So consider those contingencies when you look for affordable places to retire.
Finding the cheapest place to retire means more than cutting expenses, you need to beware of the tax climate. Not every state will be an affordable place to retire. Forty of the 50 states give a variety of tax breaks to retirees. Seven have no state income taxes for all residents, and eight gave property tax relief to homeowners over 65. Fourteen give homestead exemptions to all homeowners. Most states will allow you to deduct some portion of your government, military or private pension when calculating your income tax.