Personal Finance News Monday 5/7

Phil's Personal Finance Tip of the Day:

Picking a Place to Retire
By ELLEN E. SCHULTZ From the Wall Street Journal

Where to retire? It's an age-old question that for many people centers on two big variables: housing costs and taxes.

They should add a third criterion to their list: the percentage of people collecting pensions.

Most people tend to retire close to home, according to an analysis of U.S. Census data by Cheryl Russell, a demographer and editorial director of New Strategist Publications. Those who move farther away fall into two groups: the frail elderly, who want be closer to their children, and, as Ms. Russell calls them, the "energetic affluent."

For those looking make a long-distance move, the websites Zillow, Trulia and Realtor.com provide listings, historical sales prices, mortgage rates, property taxes and foreclosure rates, among other information.

Zillow, for example, shows trends within states and metropolitan areas over one, five and 10 years, the percentage of homes sold for gain or loss, and the percentage that increased or decreased in value. Trulia includes data on crime rates and schools, and Google Earth lets you peek at the property.

Taxes are more complicated. States vary considerably, with different rules for different kinds of income.

Tennessee, for example, doesn't tax wages, Social Security benefits, or pension and IRA distributions. But the state sales tax is high (7% for tangible property, for example), and it taxes interest and dividends at 6%. Estate and inheritance taxes range from 5.5% to 9.5%.

Florida has fewer variables. It has no state income tax of any kind, no inheritance tax and limited estate taxes. Property taxes have a number of homestead exemptions. The state sales tax is 6%, though some counties have a sales tax that can bring the combined rate to 9.5%.

To read the entire article by ELLEN E. SCHULTZ/The Wall Street Journal:
http://online.wsj.com/article/SB10001424052702303877604577380360566783028.html?mod=WSJ_FamilyFinance_FamilyFinance_2

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