How the hell are we supposed to retire?

Santapez

Well-Known Member
Team MTBNJ Halter's
It's not the mortgage, it's the taxes.
Seriously. I didn't move out of state and buy a house for any monetary reasons. Due to life circumstances we were long-term renters.

House taxes discussion came up during the holiday with my wife's family and hearing people's property taxes for pretty generic houses made me a little sick. It's pretty crazy if you own a house mortgage free you are basically paying the equivalent in rent every month.

I don't want to one day have no mortgage, be retired and have to pay +1k a month in taxes.
 

Cassinonorth

Well-Known Member
It's not the mortgage, it's the taxes.

Yeah, taxes are killer too. Fortunately we found a house with super reasonable taxes ($6.5k annually currently). Obviously things change but ~$500 a month isn't "we have to move" worthy for me. There's a decent chance the family we're in NJ for is gone by the time we think about those things anyway so we'll see.

We're quite flexible and have decades to figure it out.
 

Bike N Gear

Shop: Bike N Gear
Shop Keep
Yeah, taxes are killer too. Fortunately we found a house with super reasonable taxes ($6.5k annually currently). Obviously things change but ~$500 a month isn't "we have to move" worthy for me. There's a decent chance the family we're in NJ for is gone by the time we think about those things anyway so we'll see.

We're quite flexible and have decades to figure it out.
Ours were $6300 when we moved in. More than doubled and no sign of slowing down.
 

mfennell

Well-Known Member
Ours were $6300 when we moved in. More than doubled and no sign of slowing down.
When did you move in tho? We've been in our home in Middletown for 22 years and taxes haven't doubled. They've actually lagged inflation if my memory is correct.

My buddy (wealthy investment banker :rolleyes:) periodically complains about his taxes and points out that the rate in Rumson is so much better. Sure dude, go buy a 3MM home on a tiny lot and enjoy your lower tax rate.

My taxes are high but I feel like I get some value out of it. Monmouth County park system is awesome (hat tip to @pooriggy ). My wife and I enjoy them all the time. Our daughter used to go to all kinds of county and town events when she was younger. Streets get plowed, garbage gets picked up. And so on.

WalletHub has an interesting evaluation of overall tax burden. NJ ranks 6th overall. 4th in property tax but 20th in income and 43rd in "Total Sales and Excise". We can b*tch all we want about it but sales tax hits lower income people harder. Just in sales tax, NJ comes up 30th. Everyone's favorite 'cheap' spot, FL, is 23rd. (https://taxfoundation.org/2022-sales-taxes/).
 

Bike N Gear

Shop: Bike N Gear
Shop Keep
When did you move in tho? We've been in our home in Middletown for 22 years and taxes haven't doubled. They've actually lagged inflation if my memory is correct.

My buddy (wealthy investment banker :rolleyes:) periodically complains about his taxes and points out that the rate in Rumson is so much better. Sure dude, go buy a 3MM home on a tiny lot and enjoy your lower tax rate.

My taxes are high but I feel like I get some value out of it. Monmouth County park system is awesome (hat tip to @pooriggy ). My wife and I enjoy them all the time. Our daughter used to go to all kinds of county and town events when she was younger. Streets get plowed, garbage gets picked up. And so on.

WalletHub has an interesting evaluation of overall tax burden. NJ ranks 6th overall. 4th in property tax but 20th in income and 43rd in "Total Sales and Excise". We can b*tch all we want about it but sales tax hits lower income people harder. Just in sales tax, NJ comes up 30th. Everyone's favorite 'cheap' spot, FL, is 23rd. (https://taxfoundation.org/2022-sales-taxes/).
24 years. But Metuchen being a commuter town has always been pricey. Too bad we don't need the trains station anymore due to WFH. Are there parks in Middlesex County? We never use any. Since we don't need the schools anymore, we really should move, but prbably won't until we retire.
 

Patrick

Overthinking the draft from the basement already
Staff member
I don't want to one day have no mortgage, be retired and have to pay +1k a month in taxes.

Why not? Just put it in the budget.

Rick's taxes+hoa are probably in that range in Flemington. My taxes are around there.
I see the bigger problem being maintenance. Yard, pool, snow etc. I do it myself now. How long can I do it?

On the other hand, I'll deal when it happens.

We've been talking about renting if we snowbird, so we don't need to pick one place
 

ChrisG

Unapologetic Lifer for Rock and Roll
Seriously. I didn't move out of state and buy a house for any monetary reasons. Due to life circumstances we were long-term renters.

House taxes discussion came up during the holiday with my wife's family and hearing people's property taxes for pretty generic houses made me a little sick. It's pretty crazy if you own a house mortgage free you are basically paying the equivalent in rent every month.

I don't want to one day have no mortgage, be retired and have to pay +1k a month in taxes.
This is one of the factors in my current “When will I retire?” conversation.

We have no mortgage. Our taxes are ~$600 per month, which is dirt-cheap “rent” in NJ, but a helluva lot more than we’ll be paying if/when we cash out the house and take the money elsewhere.
 

Santapez

Well-Known Member
Team MTBNJ Halter's
Why not? Just put it in the budget.

Rick's taxes+hoa are probably in that range in Flemington. My taxes are around there.
I see the bigger problem being maintenance. Yard, pool, snow etc. I do it myself now. How long can I do it?

On the other hand, I'll deal when it happens.

We've been talking about renting if we snowbird, so we don't need to pick one place
Because I can move that into the "Go on awesome trips" budget instead of "feed the tax monster budget".

Didn't Rick sell, or is in the process of selling?

This is one of the factors in my current “When will I retire?” conversation.

We have no mortgage. Our taxes are ~$600 per month, which is dirt-cheap “rent” in NJ, but a helluva lot more than we’ll be paying if/when we cash out the house and take the money elsewhere.
Yeah, a lot easier to retire when that expense isn't there every year.
 

clarkenstein

JORBA Board Member/Chapter Leader
JORBA.ORG
NJ’s effective tax rate is not amazing but honestly not that bad overall considering. Which is insane.

I debated a move to NC but when I looked at the offer I was given, it wasn’t good enough, plus it turned out I would pay more in taxes overall. So I stayed put, for now.
 

Santapez

Well-Known Member
Team MTBNJ Halter's
NJ’s effective tax rate is not amazing but honestly not that bad overall considering. Which is insane.

I debated a move to NC but when I looked at the offer I was given, it wasn’t good enough, plus it turned out I would pay more in taxes overall. So I stayed put, for now.
When you say you'd pay more, what do you base that on? Did they want to give you a pay cut?

Like I said, I didn't move to NC to save money, but besides property tax being lower, the income taxes for us are lower too. Quick googling has NJ Married, filing jointly couple that makes 150k-500k combined at 6.37% rate. 5.25% for 80k-150k for a married couple.

NC is going from 2022 4.99% to 4.75% for 2023. It is going down to 3.99% in yearly drops in 2027. It was 7.75% back in 2013 apparently.

They tax food and clothes down here which I think is BS. Doesn't really affect me that much but that really hurts low income people. And there's county/city sales tax.

I have yet to switch my cars over to NC insurance and the DMV is as messed up as NJ. I think my appointment we made at the DMV two months ago is for late January. People made fun of me for moving with "Have fun paying property taxes on your car every year!" but according to the DMV website it's going to be around $80 a year.

---

Not specific to any state, but one concern isn't necessarily income tax in retirement, it's capital gains. New Hampshire for instance is great for no property tax but then taxes your dividends in retirement.
 

clarkenstein

JORBA Board Member/Chapter Leader
JORBA.ORG
When you say you'd pay more, what do you base that on? Did they want to give you a pay cut?

Like I said, I didn't move to NC to save money, but besides property tax being lower, the income taxes for us are lower too. Quick googling has NJ Married, filing jointly couple that makes 150k-500k combined at 6.37% rate. 5.25% for 80k-150k for a married couple.

NC is going from 2022 4.99% to 4.75% for 2023. It is going down to 3.99% in yearly drops in 2027. It was 7.75% back in 2013 apparently.

They tax food and clothes down here which I think is BS. Doesn't really affect me that much but that really hurts low income people. And there's county/city sales tax.

I have yet to switch my cars over to NC insurance and the DMV is as messed up as NJ. I think my appointment we made at the DMV two months ago is for late January. People made fun of me for moving with "Have fun paying property taxes on your car every year!" but according to the DMV website it's going to be around $80 a year.

---

Not specific to any state, but one concern isn't necessarily income tax in retirement, it's capital gains. New Hampshire for instance is great for no property tax but then taxes your dividends in retirement.


It came down to COL and effective tax rate for me. The salary was a raise from what I was making at the time, and based on where I would have had to live to have a human-based commute (I can take commutes up to 1:15 one way), the property taxes in the areas I would consider within that commute radius, and the lack of a guarantee that the area I chose to live in would be the place where my kids go to school, it ended up showing me that for my situation, NC was going to cost me up to almost 5% more to live there. Is that a lot for some, no, but at certain income levels - yes, especially when talking what goes into a retirement account versus the government’s accounts.

Each person’s situation is different, and the city/town you land in can affect that, but trading what I have here in NJ for what I would have had in NC would have been a loss overall for me. Having kids may be the big differential.

I wish I could, but I’m not getting into my finances on a public forum, because I was honestly amazed at the final numbers. It was not what I expected. I ran them by a colleague in my line of work (fellow CPA) and he totally agreed with my numbers, and was equally surprised. I always believed the south was the tax Promised Land, but now know if I move, I’m doing my COL analysis first.
 

Cassinonorth

Well-Known Member
When you say you'd pay more, what do you base that on? Did they want to give you a pay cut?

Like I said, I didn't move to NC to save money, but besides property tax being lower, the income taxes for us are lower too. Quick googling has NJ Married, filing jointly couple that makes 150k-500k combined at 6.37% rate. 5.25% for 80k-150k for a married couple.

NC is going from 2022 4.99% to 4.75% for 2023. It is going down to 3.99% in yearly drops in 2027. It was 7.75% back in 2013 apparently.

They tax food and clothes down here which I think is BS. Doesn't really affect me that much but that really hurts low income people. And there's county/city sales tax.

I have yet to switch my cars over to NC insurance and the DMV is as messed up as NJ. I think my appointment we made at the DMV two months ago is for late January. People made fun of me for moving with "Have fun paying property taxes on your car every year!" but according to the DMV website it's going to be around $80 a year.

---

Not specific to any state, but one concern isn't necessarily income tax in retirement, it's capital gains. New Hampshire for instance is great for no property tax but then taxes your dividends in retirement.

I was interviewing for a while in Raleigh but I'd need to make almost double to offset my wife making half as a teacher down there.
 
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