Maryland Among ‘Most Moved From’ States In 2020, Study Says (renting, house)

[bufflove]

Originally Posted by North Beach Person

What's your income tax rate? If you're typical it's around 7.25%-7.5% (don't forget the County piggyback income tax).

That starts to look unattractive when compared to states like Pennsylvania (3.07%) or Virginia's of 5.75%. Then you start looking at generally lower housing costs.

Right, a few (or a couple) percentage points. It's something that might affect the thought process of someone who feels anxiety about making their 401(k) balance last. It's not something someone with a several million dollar stock portfolio and paid off house is going to care about. Guess which person the state cares about keeping and taxing @ the full rate? I can't imagine a universe where the state decides to give the millionaire retiree a pass just to keep the middle/lower middle retiree from leaving for PA or FL.

[North Beach Person]

Originally Posted by bufflove

Right, a few (or a couple) percentage points. It's something that might affect the thought process of someone who feels anxiety about making their 401(k) balance last. It's not something someone with a several million dollar stock portfolio and paid off house is going to care about. Guess which person the state cares about keeping and taxing @ the full rate? I can't imagine a universe where the state decides to give the millionaire retiree a pass just to keep the middle/lower middle retiree from leaving for PA or FL.

Except the guy who has a several million dollar portfolio is burying that money in tax deferred instruments.

And no one is talking about giving that guy a "pass" but the typical state retiree like who has a smallish pension and maybe Social Security (which is federally taxed if the pension is over $14,000). The pension is open to taxes both federally and by the state.

(I said "maybe" above because of the old Civil Service pension which didn't have the Social Security piece like today's, since 1983ish, Federal Retirement System does)

[Digger 68]

Yeah. All of the above. Housing, and property taxes are making people leave. You can either afford, and want to stay, or can't.

[bufflove]

Originally Posted by North Beach Person

Except the guy who has a several million dollar portfolio is burying that money in tax deferred instruments.

And no one is talking about giving that guy a "pass" but the typical state retiree like who has a smallish pension and maybe Social Security (which is federally taxed if the pension is over $14,000). The pension is open to taxes both federally and by the state.

(I said "maybe" above because of the old Civil Service pension which didn't have the Social Security piece like today's, since 1983ish, Federal Retirement System does)

Re: bolded, this line of discussion is related to my reply to "They should stop taxing retirement income, thats a big reason why retirees leave!" I still don't think retirees as a class will (or should) have all sources of income be untaxed.

As for a more general tax discussion, I (unsurprisingly) agree that "typical" retirees - and typical lower/middle-income earners - should face a smaller income tax burden. Maryland's tax brackets are extremely regressive. Someone making $35K a year is paying roughly the same state/county tax rate as someone making $100K (4.75% + a flat county tax rate on top). Someone's $125,000th dollar earned is taxed at the same rate as someone's $1,250,000th dollar earned (5.25%).

Adding additional tax brackets or otherwise expanding the current spread between the brackets in order to tax lower income at lower rates would be far more equitable for seniors - and everyone else, too.

[Digger 68]

Originally Posted by North Beach Person

Except the guy who has a several million dollar portfolio is burying that money in tax deferred instruments.

And no one is talking about giving that guy a "pass" but the typical state retiree like who has a smallish pension and maybe Social Security (which is federally taxed if the pension is over $14,000). The pension is open to taxes both federally and by the state.

(I said "maybe" above because of the old Civil Service pension which didn't have the Social Security piece like today's, since 1983ish, Federal Retirement System does)

It changes after 1984. Both my Parents get the pre 84 pension. Although my Father made sure he had enough credits from the private sector to qualify for SS as well. He didn't retire, and sit on his ass.
They were grade 15's I believe when they retired.

[selhars]

1) People with Kennedy money (shows how old I am-- OK Bezos money) or multiple millions maybe do stay. At that level you can afford it. But....

2) I think lots of people with over a million saved leave MD. My coworkers who retired had that and moved to New Hampshire, Kansas, and Florida. Some moved to be back in their home state, others had lived in those states before, but weren't not born there.

3) It's working people who can't move because of taxes. But retirees can -- and do move for that reason.

4) Is it that the state MAKES money on retirees? Or that retirees don't COST the state that much. So it can take in more than than spend on them.

I know when I retire my only real spending will be on travel. And how much money will a state earn off of that? A retiree might buy a house initially. But usually they're downsizing, not buying LOTS more house items....like during the accumulation or family building years. And OK, retirees may go out to eat and travel. But I still don't see them as some great. big. money. maker.

I'm not saying that finances (taxes) are THE main factor in retirees living. But I think people pay attention to that to at least some degree.

[North Beach Person]

Originally Posted by selhars

1) People with Kennedy money (shows how old I am-- OK Bezos money) or multiple millions maybe do stay. At that level you can afford it. But....

2) I think lots of people with over a million saved leave MD. My coworkers who retired had that and moved to New Hampshire, Kansas, and Florida. Some moved to be back in their home state, others had lived in those states before, but weren't not born there.

3) It's working people who can't move because of taxes. But retirees can -- and do move for that reason.

4) Is it that the state MAKES money on retirees? Or that retirees don't COST the state that much. So it can take in more than than spend on them.

I know when I retire my only real spending will be on travel. And how much money will a state earn off of that? A retiree might buy a house initially. But usually they're downsizing, not buying LOTS more house items....like during the accumulation or family building years. And OK, retirees may go out to eat and travel. But I still don't see them as some great. big. money. maker.

I'm not saying that finances (taxes) are THE main factor in retirees living. But I think people pay attention to that to at least some degree.

It's mostly your number 4, with the edge to "doesn't spend as much".

Remember we're talking aggregate, not individual, spending. Eating at restaurant, buying groceries, the everyday expenditures all, in the aggregate, create jobs, which create income tax revenues as well as sales tax.

The last is a huge factor for the state.

And retirees may downsize but that doesn't mean that they're downsizing the assessment of their new house. Look at some of the sales prices, or even rents, in Over 55 developments. And, depending on the services offered (clubhouse, dining, on site clinic) they're also job generators.

[emmmcubed]

Originally Posted by North Beach Person

What's your income tax rate? If you're typical it's around 7.25%-7.5% (don't forget the County piggyback income tax).

That starts to look unattractive when compared to states like Pennsylvania (3.07%) or Virginia's of 5.75%. Then you start looking at generally lower housing costs.

If we're still talking specifically about retirees, Pennsylvania's income tax rate is pretty much 0% -- PA doesn't tax Social Security income (neither does Maryland), or pension income (private or public), or IRA/401(k)-type distributions if you're of retirement age. A difference of a few points between one state or another may or may not (or should or should not) impact people's decision making, but effectively income-tax-free might.

On the other hand . . . PA's property taxes are crazy high; MD is a true bargain in comparison. I've opined before that states have to make revenue, one way or another, so your income tax Nirvana often has high property or sales taxes, or lots of "fees," to make up for it. It can be hard to get to a true apples-to-apples comparison, and it will differ for different people. Maybe if I don't mind living in a hovel, I can buy a super-cheeeeep house in PA and thus not have to fork out as much property tax.

I'm about three years away from retirement, and pondering whether I will stay in Maryland. Delaware, Virginia, and Pennsylvania are the most likely possibilities. At some point, I will sit down with tax software and do actual returns for each of the states; percentages are one thing, but if turns out that the "actual dollars ending up in my pocket" figure isn't going to vary that dramatically, then that factor will, accordingly, move lower down the priority list.

[selhars]

I've heard that lots (plenty, a fair number?) of MDers move just north of the state line into PA. So basically they've only moved up the road a bit, stayed in their same area -- and really have NOT moved away from grandkids or friends, etc. They're not moving to PA for nothing.

(Anytime a person/family goes through the trouble of moving -- and barely moving away from where they were...I think something big about the positives of the move were in play. Had to be. It's like moving a block away. No one does that unless it's worth it some how. I had neighbors who literally moved next door.....they moved from a colonial to a rancher. To live all on one level was worth to sell their house and move ONE house over. )

[marlinfshr]

I'm a native and I'm 52. But I have lived in Costa Rica and South FL as well and stayed the better part of 2 years in Venezuela so my blood has definitely gotten thinner and I'd like to return to the palm tree belt!

I don't hate MD, but I think a lot of that has to do with where I live. Worcester county is still affordable, as is pretty much the whole lower shore. Got here after leaving PG (thank god) and Anne Arundel counties in the mid 80's/early 90's.

I think if I was still in the Wash/Balt area I'd hate this state but overall (other then the cold) this state does have a lot to offer. Especially for someone who likes to fish and hunt, believe it or not. We have a hell of a coastline when including the Chesapeake Bay and one can fish all year.

But, I am thinking of moving back to S. FL though I'm sure I'll still be a MD resident for my MD guides license reason and the fact that S.FL is actually more expensive then MD. That no state income tax and cheaper real estate (in some areas) may suck one in but by the time you add ins and other taxes, etc... They'll get you. But that is also coming from the perspective of someone living on the lower eastern shore and not Anne Arundel or Montgomery counties!