Welcome to How to Retire on Time, a show that answers your questions about all things retirement, including income, taxes, Social Security, health care, and more. This show is an extension of the book, How How to Retire on Time, which you can grab today on Amazon or by going to www.howtoretireontime.com. My name is Mike Decker. I'm the author of the book, How to Retire on Time, but I'm also a licensed financial advisor, insurance agent, and tax professional, which means when it comes to financial topics, we can pretty much talk about it all. Now that said, please remember this is just to show.

Everything you hear should be considered informational, as in not financial advice. If you want personalized financial advice, then request your wealth analysis from my team today by going to www.yourwealthanalysis.com. With me in the studio today is my colleague, mister David Fransen. David, thanks for being here today. Pleasure to be here.

David's gonna be reading your questions, and I'm gonna do my best to answer them. You can always send your questions in by either texting them to (913) 363-1234. That's (913) 363-1234, or you can email them to you, hey, Mike, at how to retire on time dot com. Let's begin.

Hey, Mike. When I retire, I plan to move to a more affordable city. Any tips on what to look for and how to research this?

Yeah. So the first mistake I see people make is that they immediately wanna go to a tax free state. Okay. There's no income tax.

Yeah. Yeah. Yeah.

It sounds great, but you need to understand the other taxes that are there.

Mhmm.

So, for example, Texas tax free state, but their real estate tax might be a bit more than you realize. Right. And so you do need to look at taxes as a whole, but don't look at at just income tax. Look at the sales tax. Look at the real estate tax.

Are you gonna have more land? Are you gonna have less land? So the taxes is a holistic conversation. It's not a specific conversation. And, yes, I mean, I love states like Washington state, Texas, Tennessee, and all the different tax free states, but then you need to understand the state laws too.

Like, Washington state has a state estate tax. So if your net worth is above a certain threshold, you might not want to move to Washington state. If it's below a certain threshold, then it's a nonissue. Okay. So taxes, estate planning, that's the first level of kind of understanding.

Then you've gotta consider the modern conveniences that you want or don't want. So do you wanna go out to eat? And are restaurants available? I've got family in Southeast Kansas. Not a huge restaurant selection.

They all have basically Walmart and one other grocery store to to go to for their groceries. It's two hours away from basically anything, but it's so peaceful.

Mhmm.

Homes are dirt cheap. And when I say dirt cheap, nice homes, comfortable, well built homes, but it's like

Yeah. Yeah.

When you compare it to what you would pay here in Overland Park. The life, the taxes, all of it's very, very affordable. I've got many clients that just love gardening. They like their hobby farm.

Mhmm.

Okay. So we're starting to structure what that looks like. Then you've gotta look at medical needs. Yeah. As you get older, are you in a house that has basically the master bedroom on the same floor as the garage and the kitchen and all those things?

Is it easy to get around or not? Right. Might not be a big deal now. Might be a big deal later on. So those are the lifestyle things to think through are gonna matter as well as access to various needs.

If you have a history of heart issue in your family, you might be healthy as can be. But what if high blood pressure or other things just kind of become an issue later on? Mhmm. Is there a good medical facility, hospital or otherwise, that specializes in the heart care? So you need to understand the medical care.

If you plan to go to a long term care facility, whether you're gonna pay for it out of pocket or you purchase long term care insurance, where is that? Social life. If you move somewhere, how are you gonna develop your community? That's church. That's volunteering.

Are you gonna be near kids or cousins or

Mhmm.

Those are other things to factor in. The most practical thing anyone can do is probably move to Mississippi. Like, would you look up I don't even know if Mississippi has state tax or not. Do they have income tax? Mississippi and Arkansas are very, very affordable states.

Wonderful people live there. I think they're among the more affordable places in the country to live. And I think Alabama is also in there, that kind of neck of the woods. But you might not have any tie. You might not have any reason to live there.

Yeah.

And so if you don't have purpose of where you're moving, you might as well just speed up your date of death. Mhmm. Yeah. So here we go. Okay.

4.7% in Mississippi. Okay. So it's not a tax free state, but cost of living and other factors is pretty low. And I'm not campaigning for people to move to Mississippi. I just know it's very affordable there.

Buying a house is very affordable there. So there are multi factors there, but think of the lifestyle, think of your medical needs, but most of all, think of your social needs.

Yeah. That sounds important.

I mean, the way I explain is, look, your spouse is great if you're married, but they can't provide all of your needs. Yeah. You may or may not realize it, but your whole life working, you were intellectually stimulated by other people at work in other areas. I love my wife to death. She could not care less about macroeconomics.

Uh-huh. Uh-huh. Could not care less. Yeah. So when I start talking about it, she's nice and say, uh-huh.

Uh-huh. But I'm not gonna get the intellectual stimulation from her. I need to hang out with other economic nerds. Mhmm. Right?

You have to have other groups. You gotta have your church or religious or spiritual group. You've gotta have your group of people that are getting you out and, you know, a tennis club, a pickleball club, a biking club, a running club, whatever it is.

Yeah.

You've gotta have different communities to make sure that you have a reason to get out of bed and that you're connecting with people. All humans are hardwired to connect. We have to be social. So don't just think about it from a dollar standpoint. There's really no point in trying to become the richest person in the graveyard.

Your money is supposed to serve you, so make that happen. And by the way, there's this idea that you need to maintain principal throughout retirement. No. You don't. If you wanna maintain principal maybe for the first ten years and then slowly start spending down principal,

Yeah.

I think that's perfectly fine. As long as you're planning appropriately, you've got little leftover for, like, medical costs and things like that, but you should have the freedom to try and spend down and, as they say, let your last check bounce.

Okay.

You know? You have nothing to the kids and live your best life, but you need to do it carefully and methodically. You can do that through the bucket strategy. You can ladder things out. There's a number of ways you could do that, but maybe you want that.

Maybe you don't want that. Maybe you wanna preserve principle for peace of mind. The idea here though is as you're planning your life, as you talk about where you wanna live, don't stick to these over cliched ideas of everyone has to fill in the blank. There are so many ways that you could structure this. It all depends on what is right for you, what risks are you willing to take, and how do you paint that lifestyle legacy picture.

That's the goal. That's the benchmark. That's all the time we've got for the show today. If you enjoyed the show, consider subscribing to it wherever you get your podcast. Just search for how to retire on time.

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