25 Cheapest Places to Retire – Episode 224

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[00:03] Welcome to the Prosperity Podcast, fresh alternative personal finance talk for independent thinkers who prosper outside of Wall Street. Here’s your host, bestselling author, Kim D.H. Butler and No BS Money Guy, Todd Strobel. Hey everybody, welcome back to the Prosperity Podcast. This is No BS Money Guy, Todd Strobel. Once again, we have our bestselling author and co-host Kim Butler with us today. And we’re actually responding to one of our listeners who has asked us to shed some light or give some information on the best or least expensive or best tax places to live during retirement. And I know, Kim, that’s not your favorite word. No, I don’t like the idea of retirement. So then I don’t like the word retirement.

[01:00] We’ll go with the article, but let me maybe make peace with it first. Clearly, people will get to, at some point, at least most people, an age where they want to make their life more elegant. That’s the way that I like to put it, rather than slow down. And so if they are moving and if they are already open-minded to being, especially in a different state, which many people are, they want to move closer to family or grandchildren or maybe warmer weather or what have you, then this is a fabulous discussion. You know, it’s funny, somebody brought it up to me a while back and I said, well, would you move? And they said, probably not. And I said, why have the discussion? You know, the tax rates and the cost of living are irrelevant if you’re not willing to move.

[01:48] And so, though we don’t really support the idea of not working, we truly feel people should literally physically work until they are no longer either mentally or physically able to. We do support taking sabbaticals, taking long vacations, taking free days, which is a Dan Sullivan thing, midnight to midnight, no business activity, and sometimes two or three or 10 in a row or 15 or 30, you know, whatever you can fit in. That is all good, good, good. But the typical sense of retirement of no work, just, you know, hang out, play golf, fish, you know, draw, paint, read, whatever, all day, it’s just not good for people. And it’s a really, really flawed societal thing that I’m going to continue to shout from the mountaintops

[02:37] that it is not an effective thing for human beings to do. But that being said, we can still have some fun looking at this list you’ve got of some of the states that potentially have lower cost of living and maybe even no state tax, which I think is a biggie, that could enable somebody to make their life more elegant on a lower monthly income. Super. And again, I want to mention that we did focus on the United States for this one. Maybe on another one, we’ll do an international one. And this information actually comes from CBS News. All righty. So the number 25 place, which surprised the heck out of me, is Bakersfield, California. I wouldn’t have put California on there at all. So I still am going to be concerned that there is a state tax and a hefty one.

[03:32] And I know some people that wouldn’t live in California no matter what they did. So, of course, others love it. Explain a little bit more. What’s their reasoning? Like, how are they measuring this? They’re measuring this by the cheapest places to retire. So your total annual expenses to live there. So one of the things that Bakersfield has going for it is it’s very consistent climate. So you’re going to spend very little on cooling or heating because of the consistency of the climate. Nice. Good info. Also, a lot of produce is grown out there, so the cost of food is lower. Interesting. Very good. All right. Our number 24 is St. Louis, Missouri. So I went to school just north of St. Louis, and I am quite surprised, especially hearing what you just said,

[04:27] because it gets cold there and it’s in the Midwest and it gets hot and humid there. But it is a nice city and it has a lot going for it. And the reason being is, is that in St. Louis, seniors get special home care, home repair, legal assistance and tax help. Interesting. All right. Number 23 is Gainesville, Florida. So Florida doesn’t have any state tax. I’m in. Although neither does Texas. Yes, I have lived there, too. The no state taxes is absolutely wonderful. And if you like alligators, turtles and bats, it’s a great place to go. Number 22 is Columbia, South Carolina. Beautiful town. I bet. Yes, I like South Carolina a lot. I don’t know whether it has a state tax. I believe that it does. What’s the reason?

[05:26] The city’s Parks and Recreation Department is dedicated to offering more programs and leisure activities to seniors. These include low cost trips, events from health screenings to to ball clubs and exercise classes that can add a lot to retirement at little or no cost. Very cool there, because clearly those that do have more time in their efforts to make their life more elegant need to be very careful how they’re spending that time. It’s funny. I overheard somebody the other day saying, well, we can’t cut that tree down because it might take out the satellite dish. And my response was good. Like, take that thing out. There’s way too much TV watching going on in that household anyway. Super. These are these are kind of surprising me. I don’t know about you.

[06:13] Yeah, skip ahead a few. We don’t want to hit all 25. I think. Well, I got to do number 21 because it’s a favorite of both of ours. Phoenix. Really? Phoenix, Arizona. Yeah. So other than making sure you have some air conditioning in the summer, it is a fun place to be. And there’s lots there. I’m definitely aware, though, that some areas of Phoenix, like Scottsdale and maybe Chandler, can have upper costs of living. But I’m sure, for example, Glendale, I know, is a part of Phoenix that does not have higher cost of living. So, well, I did not know this either. But Arizona does not tax Social Security. Oh, interesting. I did not know that. Can I pass a Texas one or do I have to say it? You have to say it. Austin, Texas.

[07:01] And now I know why you wanted to pass it. So, yes, Texas, no state, of course. What’s what’s Austin’s reason? Let’s see. It’s the fastest growing big cities in America. But far from being extremely urban, Austin is the largest part suburbs means you need a car to enjoy all it has to offer. That’s all it says. Interesting. Yeah, I have to say it wouldn’t be high on my list either. And I definitely have friends that live there. And the driving is horrific. Oh, wow. Number 19 is Dallas. OK, so another Texas state. So Texas has no state tax. And depending on your political persuasion, you know, maybe that matters to some people. I don’t know. Austin is definitely a rather unusual city in Texas because it tends to be fairly liberal,

[07:54] where the most, I would say, other cities are not Texas being relatively conservative a state. But I don’t know that people pick their locale based on that. But I suppose somebody might. What’s good with the Dallas? I’ve already skipped ahead. So you’ll have to tell us about Dallas. But all I can remember is you eat at the restaurant that turns around on the top. Ah, OK. And and I can’t say much about Dallas. It’s three and a half hours from us and I don’t go there very often. Texas is an amazing state. By the time you get from one side of it to the other, you feel like you’ve crossed the country. Absolutely. Totally different. All kinds of things, climate as well as political persuasion, as well as the industry that’s there, et cetera, et cetera.

[08:39] So and it’s big 12 hours left to right. The next is Greenville, South Carolina. And interestingly enough, the median home value is one hundred and twenty two thousand four hundred dollars in Greenville versus one hundred and seventy thousand for the rest of the country. Interesting. So South Carolina is beautiful. You’re very near the ocean. There’s a lot of water and it’s beautiful. And to have a lower housing price there surprises me. Yeah, me too. So that’s a nice potential because if people are wanting to buy a home, then they would be interested, I think, in a home that maybe was nice, but didn’t cost as much. Of course, in another podcast episode, we’ll do some fun information. I recently learned about 1031 exchanges that can be done from real estate.

[09:34] So if you have a home that you’re wanting to sell, that would be a large capital gain. But then you didn’t want to go buy a smaller home because you would end up paying capital gains tax. We have a solution for that. Super. Look forward to that one, too. Pensacola, Florida. And of course, we know that no, you know, this is wonderful thing. No taxes. So, yes. And good weather. What else does Pensacola have? Home of the Blue Angels and as much sandy beaches as you could ever hope for. And I’m sure quite a few activities, too, I think, a lot of the Florida cities, because that has been, quote, retirement haven for so many years, have activities going on for senior citizens. If you like that kind of thing.

[10:20] Sioux Falls, South Dakota. Now, this one kind of surprises me. Interesting. Cold, cold, cold. But I suppose you could heat your house with wood. What are their reasons? Sioux Falls, South Dakota has the lowest health care costs in the country. Interesting. OK, so that could be. How about that? Yep. That could be very important for some people. What a nice thing that they identified that for us. I’ll just take the positive focus route on that. Well, what’s interesting is, is that it has the lowest health care cost, but it’s also listed as one of the healthiest places to live. So I think you can even you can appreciate that. Absolutely. That’s fabulous. Does it say why? It just says it’s on the healthiest place to live.

[11:10] There you go. Google that. And mostly but miles, 28 miles of paved hiking and biking trails. There you go. How fun. That makes me want to go right now. Ann Arbor, Michigan. What a beautiful place. But I would have thought of it as expensive. Yeah, it’s probably like Phoenix has spendy areas and then maybe not so expensive areas. I’ve never been. You probably know more about it than I do. Oh, it’s a huge supporting of course, University of Michigan, which is a big football program. I’m trying to see what it’s got on here. The rent’s a little high. The groceries is about the lowest of any of them we’ve talked about. So I assume that’s what brought that one in. Interesting, which seems odd. Michigan, I think raises cherries, but I wouldn’t call it farm country.

[12:03] Number 14 is Fremont, California. Another California state or California city, I should say. I am going to restate that I would be concerned about a California city just because California state and many of the counties there have really high income tax. So that’s something that should be looked at. But there are other reasons to choose a locale besides income tax and sometimes family and other aspects like weather override that. So that’s fine. I think California is kind of like the lottery because, you know, any day your property could become waterfront property with. Yes, and my experience in California is that it’s too cold because I lived in Arizona and Texas with hot, hot, hot summers.

[12:50] So to me, California is chilly. How about Tulsa, Oklahoma? A good place. Little oil there, probably another fun subject that will hit on the podcast in the coming days. Tell us what they say about Tulsa. Well, this is interesting. This one made the list because it has 16 public golf courses. OK, well, there you go. If you’re a golfer, you’re a golfer. Yeah, I’m guessing that that wouldn’t be it’s not a Florida. So maybe the courses are nicer and less crowded and also less expensive. How about Salem, Oregon? Couldn’t pick a more beautiful place to live. How about that? That’s an hour from where I grew up. And I can absolutely speak to the Oregon and the Willamette Valley, which is Portland, Salem, Corvallis and then Eugene.

[13:39] It’s an hour from the Pacific Ocean and you’ll get some rain for sure. But it is a very nice town. I guess it’s the capital, but city, I wouldn’t quite call it that, has a good revitalized downtown area and is, like I said, an hour from the coast. And Oregon does not have tax on Social Security and has no sales tax and has one of the lowest property taxes in the country. Correct. All very good information. Madison, Wisconsin, they don’t tax Social Security. 401Ks and IRAs are taxed. There’s lots of bike paths and walking trails. And that’s about it. So I assume it’s the tax thing. And the rent is relatively low. So I’m assuming the housing values are pretty reasonable. Probably. Kansas City, Missouri.

[14:42] This is the town that confuses me because there’s a Kansas City, Kansas and a Kansas City, Missouri. And you can’t tell when you’re in one and out of the other. Yes, that’s very true. I’ve been there. I think it’s the only World War One museum in the country there. And it’s quite a special place. It’s listed even in US News and World Report as the number 19th most reasonable place to live. Again, the rent and food is very reasonable. Number nine. Wow. Rochester, New York. Very surprised New York’s listed at all. So the New York area, of course, especially when you get out of the city, has some wonderful farmland. I’ve heard just amazing stories about some of the produce that comes from there.

[15:31] Of course, you have access to the city, which can be lots of fun. Tell us what the reasons are. The summer average temperature is 78 and the winter average temperature is 32. So it’s a moderate climate. They call 32 moderate? Well, in this side of the country, we do. Yikes. I’m glad I live in the South. Number eight, my home away from home, Salt Lake City. There you go. I’ll vouch for that. Yeah, very, very pretty, very clean city. Of course, you know, Mormon community there, which keeps things on the clean, not only physically, but just mentally and a lot of other areas, I think. And their downtown is beautiful, very walkable. Nice, nice place. And of course, close to good skiing. And it’s one of the few cities that’s gridded so that there’s an exact grid on top of the city.

[16:25] So every street is numbered. So, you know exactly where you are all the time. Yes. Number seven is Omaha, Nebraska. Oh, my. So that’s where my dad grew up. And I don’t think he would go back. And the movie, Nebraska, that came out, he said had more truth than he cared to admit. So tell us what’s good about Omaha. It says it’s a good thing Omaha has such a low cost of living and modest grocery cost because Nebraska is not the tax-friendly estate for seniors. Interesting. So if you are in a tax situation, which most of our listeners are, avoid Omaha. Absolutely. Albuquerque, New Mexico. This is something I know nothing about. Yeah, very, very nice area. I’ve been a couple of times and it has got both desert as well as high mountains,

[17:18] which is nice and very, very close, very uncrowded. If you enjoy snow at all, you know, I mentioned skiing earlier. Yes, you can ski when you’re 70 and 80 and 90. It is done. Snowboard, et cetera. Of course, the Albuquerque Balloon Festival is there. I would go just for that. It’s 68.8 degrees, 310 days, or no, I’m sorry, has 310 days of sunshine a year. Okay, yes. I would move there just for that. Number five is Mobile, Alabama. Okay, Mobile, maybe. I’m not actually sure on the pronunciation. So the whole Alabama and Arkansas, that area, definitely my experience, very low cost of living, has some nice little places, you know. It may not be the hottest part of the country in terms of social acceptance, but there

[18:12] are definitely some nice things there, some good that can happen, and any time you get in those more out of the way states and cities, you’re going to have less cost. There’s just no really way around it, which can be good, and could also mean less activity, don’t know. What do they say? And their claim to fame is they get five and a half feet of rain a year. Five and a half feet, wow, that’s a lot. I’ve never even heard it expressed in feet. That’s a lot. So it’s, love rain, this is the place for you. Okay. Number four, Tucson, Arizona. Yes, also nice, and if you liked the southern aspects but didn’t want to be in Phoenix, that would be the place to go. And Tucson actually has some mountains.

[18:59] I think a lot of people are not aware of that at all. There’s quite a bit of mountain range there. Correct me if I’m wrong. This is about the closest you can get to experiencing Mexico without being in Mexico. Absolutely, right across the way. Oklahoma City. Okay, so similar to Tulsa, I’m guessing. What’s the difference? It has the lowest cost of living in the nation, exempt social security from taxation, has a $10,000 deduction for all types of income. Interesting. But the sales taxes are high and the property taxes are low. Okay. We’re up to number two. Now this is a city I’ve been to, and I’m not sure if I like it or not, but San Antonio. Ah, all right. So another Texas, I like it very much.

[19:50] They have a beautiful river walk, but I have to admit, would I want to live there? Not so much. A little crowded for me. Yeah, and I was really disappointed because, you know, I went to all the historic sites and did the river walk and so much of the stuff says this is what it might have looked like and might have been where it was. I was kind of hoping for a little more exact. Yes, yes. All right, we’re up to the number one. Any guesses? No. Athens, Georgia. Holy cow. Well, I will say that I love aspects of Georgia for sure. I’m in Atlanta quite a bit and other smaller towns around. So, yeah, it’s beautiful and has nice climate, not too hot, though. Tell us what else their reasons are. If you are older than 64, a $65,000 per person deduction on all other types of

[20:50] retirement income apply. OK, well, that can be good. That is that’s quite a chunk of non-taxable income. That would add 20 percent at least to your buying power, wouldn’t you think? Yeah, I do. So as we’re finishing this up, it is, I think, really important just to acknowledge that we don’t always want the tax tail wagging the financial dog. There’s a lot of people that are literally just resisting spending their income because they don’t want to pay the tax. And that doesn’t make any sense to me. But if you can legally lower it, then that does make sense to me. So super helpful info. Super. Well, again, I would invite our listeners, if you have information that you would like to add. I really think that when it comes time to picking a place to live, your

[21:42] happiness has to come first. And I mean, yeah, maybe you pick the top 10 places that you’d like to live and then factor in the taxes and the cost of living and that type of thing. But to live someplace that is just absolutely miserable to you in order to save money, probably not the way you want to end your life. Yes. Well said. Well said. And sometimes we don’t have a choice. We’re needed to be somewhere. And then if you don’t think that’s the best, it’s time to do positive focus every day and find the good that’s already there. Super. Well, again, this is No BS Money Guy for the Prosperity Podcast. Special thanks to Kim Butler. Thanks to all of our listeners. And we look forward to talking to you all again real soon.

[22:24] Thank you for listening to the Prosperity Podcast to take control of your money and have it work for you. Visit us at partnersforprosperity.com. If you liked this episode, make sure you subscribe and leave a review.