3 Reasons Why Your Finances Will Thank You for Retiring in Texas
There is some contention about the state of Texas. Some people love it, while others do not care for it so much. In general, if you are thinking about living there, you will probably have a better experience if you go to a part of the state that is a match for your sensibilities. For instance, Austin is known as being a bastion of liberalism, while somewhere like Dallas or Houston is thought to be more conservative.
You might decide that you want to look into Texas as a state where you might retire. There is more than one lovely retirement community in Texas where you will have plenty of activities to keep you engaged, like swimming, golf courses, fine dining, shopping, and much more.
If you move to Texas to retire, you may decide that it is the best idea from a financial standpoint. There are undeniably some nice things about living there if you are focused mainly on your wallet. We will talk about three of the most notable financial benefits of retiring in the Lone Star State in the following article.
There is No State Income Tax
Texas happens to be one of only seven states that do not have income tax. Income tax can be a burden for many people, and the idea of not having to pay any may be more than enough incentive to move there when you become an older adult.
Retirees are able to keep more of their retirement income if they settle down in Texas to celebrate their Golden Years. You can use the extra money that you are saving in retirement income for things like healthcare, travel, or whatever else you happen to be prioritizing.
As someone living in Texas who can take advantage of their no income tax policy, this means you do not have to pay taxes on your Social Security checks. That alone is a tremendous value for you.
You will also not pay any taxes on your pension plan, if you happen to have one. That can be a difference of hundreds or even thousands of dollars over the course of a single year.
There is also the added bonus that you will not have to pay any taxes on deductions you make from a 401K or an IRA. That means more money goes right into your pocket when you are ready to start dipping into that stash you have probably been adding to for decades.
As a retiree, the no state income tax policy will give you a larger budget to work with. You and your spouse or partner can probably come up with all kinds of ways to use that additional money. If you’re single and looking for a romantic interest, that leaves you plenty of money to take someone out on a date who you have had your eye on.
The Cost of Living
In a general sense, you can say that Texas has a relatively high cost of living. However, much like in several other states, it all depends on where you live.
There are several cities in the panhandle that are reasonable in terms of rents. In North Central Texas, you would do well to try Breckenridge, which has both low-pricing housing and a strong economy. Wichita Falls is another viable option for the budget-minded retiree, and there are some amazing hiking trails and golf courses as well.
If you would prefer the heartland region, you might check out Amarillo. It is one of the cheapest places to buy a house in all of Texas. There’s Lamesa as well. San Angelo also gets a lot of attention if you want affordable housing.
You would do well to avoid a city like Dallas or Austin, though. They have some of the higher costs of living in the state, and they are also densely populated, which some retirees may not like so much.
Lower Sales Tax
A third reason why you may like retiring in Texas is that they have a much lower sales tax than a lot of other states. In fact, there are several items that are subject to no sales tax at all.
These include over-the-counter meds and prescription drugs. If you need some of these in your retirement years, as many older individuals do, this will be music to your ears.
You will also pay no sales tax on groceries. This combination of no sales tax on several items and low sales tax is general is another reason why Texas might appeal as you are considering where to spend your time in retirement.
Some Bonus Financial Reasons to Retire in Texas
While three reasons may be enough to convince you that this is a smart idea, we would be remiss if we did not mention some additional financial perks that are unique to Texas for older individuals. The cost of healthcare in Texas is pretty reasonable as compared to some other states.
Medical options can be yours at an affordable cost, and you will also have access to some of the most renowned medical facilities in the US. Those include teaching hospitals, clinics, and research institutions coming out with new treatment methods seemingly every day.
If you do decide to move to Texas when you retire, spend some time studying the layout of the state and consider what’s most important to you before packing up and heading there. This is a state of contrasts. Some individuals may be fine living in smaller communities, but others may wish they had more options as far as nightlife, dining, etc.
That means avoiding the smallest communities, most of which are in the panhandle. While many of them are quite affordable, if the lifestyle is not to your liking, it might very well defeat the purpose of moving there.
You want to save money, but you also want to be happy. Balancing those things might be a challenge in retirement, regardless of whether you choose to live in Texas or any other state.
