Sun, surfing, long stretches of Pacific Ocean, this is the California we know. The Golden State is the home of Hollywood premieres and Haight Ashbury, the place where dreams are made, a playground to the rich and famous. But, if are you planning your retirement in the Golden State, think again. Retired residents should have a plan B or they may end up on the boulevard of broken dreams.
Disney, Apple & Taxes!
The home of Disney make-believe, Apple, The Golden Gate Bridge and Paramount Studios, is also the state with one of the highest personal income tax rates in the entire nation. Although there is a tax exemption for Social Security benefits, it brings little relief as all other retirement income gets taxed in full.
And if you own real estate in California, property taxes are assessed at 100 percent of the home’s value, up to a maximum of 1 percent of the home’s cash value. What does that do to quality of life? You may live in the heart of Malibu among millionaires and princes, but if taxes are so high that they seriously impact income, how does that affect one’s quality of life?
Among the Stars…
Just think, the average home price for new and existing homes and condominiums is up to $340,000. Incidentally that median price is much higher in places like San Francisco, Los Angeles and San Diego. In certain parts of the country one could purchase a palace practically for that much money. As reported originally by Yahoo Finance, the tax chart below is telling.
State income tax: 1% – 13.3%
State sales tax: 7.5% (combined state, local rate)
Mean property tax rate as a percentage of mean home value: 0.8%
Property tax ranking: 33
Estate tax: Limited to the federal estate tax collection rate
Inheritance tax: None
Still planning on retiring in sunny Cali among the stars? Just remember where you live during retirement could really impact your life especially if you choose to spend your golden years in the Golden State. Yahoo Finance states:
You’ll soon learn that where you live during retirement largely dictates what you spend.
… California’s top income tax rate is a budget busting 13.3 percent.
Maybe a camper under the stars might be a good, safe plan B!
AUG
