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How to think about taxes in early retirement

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  • ENT Doc ENT Doc 
    Participant
    Status: Physician
    Posts: 3019
    Joined: 01/14/2017

    Just don’t die there.

    #197741 Reply
    Avatar JBME 
    Participant
    Status: Spouse
    Posts: 413
    Joined: 03/26/2018

    I stress over similar questions. But I can’t help but find humor in the “should I move to a no income tax state” idea.

    As 93% of my investment portfolio is in tax-deferred retirement accounts, I am moving TO Pennsylvania, because of family, the lower cost of living than NYC metro where I am now, and importantly, no state taxes on retirement account distributions or social security!

    Click to expand…

    PA is indeed a great state to move to for retirement purposes for the reason you list, but yeah you don’t want to die there…it’s one of a few states that has an inheritance tax. Any states in yellow or green here are bad states to die in but I’d argue green is worse than yellow:

    https://taxfoundation.org/does-your-state-have-estate-or-inheritance-tax. If you want to stay in the northeast, although it’s admittedly not that close to the NYC metro, you want to be in New Hampshire.

    #197746 Reply
    Liked by ENT Doc
    Avatar Antares 
    Participant
    Status: Physician
    Posts: 458
    Joined: 01/20/2016

    I may end up paying the Divine Surcharge 😁

    #197782 Reply
    Avatar redpen1 
    Participant
    Status: Physician
    Posts: 11
    Joined: 01/22/2018

    Antares, at what age do you plan to stop working?  Are you planning Roth conversions?

    #197807 Reply
    Avatar Antares 
    Participant
    Status: Physician
    Posts: 458
    Joined: 01/20/2016

    Antares, at what age do you plan to stop working?  Are you planning Roth conversions?

    Click to expand…

    I’m 60, aiming for 65. And at 93% in tax-deferred, due in part to being in a two-physician couple both making 25% solo 401K contributions for many years, there’s not much available to convert with…

    #197907 Reply

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