Moving to another state in retirement may offer the potential for tax savings, but taxes aren’t the only factor to consider. From family and activities to residency rules and your overall financial plan, there are several things to think through before deciding whether a move makes sense.
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Austin, I have more and more clients asking me about moving to another state in retirement. What’s going on?
Great question, and something we’ve certainly been talking to our clients a lot about lately. I think what it comes down to is nobody likes paying taxes. And by moving to a different state, they may have the potential to save on some taxes.
But what they also need to consider is who’s going to be down there? Are they going to be away from their family? And the other thing they want to know is, who am I going to spend my time with, and what activities am I going to do?
And the other thing that’s really important is understanding how Minnesota operates when you change residency like that and understanding the rules and the dates and how to best make sure that your financial plan accounts for that in order to make sure the tax savings are worth it.
So, if you follow the rules and perhaps have relationships or activities that you love in another state, it may make sense to consider residency in another state.
Absolutely.