Veronica Dagher and Anne Tergesen asked seven retirees to open their books. What comes back is not a story about tax rates. It is a story about which numbers people check and which ones they find out about later.
The arithmetic that worked
Ed and Gina Budde left the Minneapolis area after their youngest finished college. Ed, an electrical engineer who still works about twenty hours a week mainly for the health insurance, was especially keen on a state with no personal income tax. They moved to a 55-plus community in Reno in 2019, then to Henderson this July to be nearer a grandchild.
Annual spending fell from around $100,000 to about $75,000. Property taxes are roughly $2,200, about half what they paid. Groceries run about $150 a week, down from $200. They are not fans of Nevada gas prices. They have roughly $3.5 million saved, and they have no plans to move back.
Earl and Pat Vittitoe left Illinois on Earl’s 63rd birthday and drove to Oro Valley, Arizona. Their property-tax bill went from more than $13,000 a year to about $3,600. For seven years Earl has invested the roughly $10,000 difference in stocks. That balance now exceeds $100,000. “That decision is getting more valuable by the day,” he said.
The arithmetic that surprised people
Don Beck retired to Lakewood Ranch, Florida, after a winter escape in 2021 — he called a real-estate agent the day after he landed and bought a roughly 2,000-square-foot home sight unseen for about $630,000.
Several costs fell. Car insurance dropped about $100 a year. Home insurance fell about $300. The water bill fell about $500. His electric bill rose only $52 a month despite air conditioning and a heated pool.
Then the other column. Property taxes jumped more than $2,200 a year despite a smaller house. And the homeowners’ association dues went from about $120 a month in Colorado to more than $700 a month in Florida — an increase of roughly $7,000 a year, which is most of a state income tax by another name.
The part almost nobody checks
Here is the sentence in the piece that deserves to be read twice: many states exempt Social Security from state income tax, but only a few offer similar treatment for retirement-account withdrawals.
That is not a footnote. For a household whose income in retirement is mostly 401(k) and IRA withdrawals, it is the whole question.
The Vittitoes are the clean illustration. Arizona’s 2.5% rate is half of Illinois’s nearly 5%, so on the surface the move saves income tax every year. But Illinois exempts retirement-account withdrawals and pension income entirely. Arizona does not. When Earl begins required withdrawals from his IRA at 73, they will pay a little more in Arizona than they would have at home.
They still think the move was right — the property-tax saving is larger, and they traded up on lifestyle. But the direction of the tax saving reverses at a specific age, and the only way to know that in advance is to look up how your destination treats withdrawals, not how it treats wages.
A checklist worth fifteen minutes
Look up the treatment of 401(k) and IRA withdrawals, not the headline income-tax rate. Those are different questions and the answer can invert once required withdrawals start.
Get the actual property-tax bill for the actual house, not the state average. Beck’s went up on a smaller home.
Ask for the current HOA schedule and the last three years of increases. A $580-a-month swing does not show up in any state tax comparison.
Price homeowners’ insurance before you make the offer, especially on the coast.
The people in this piece did well. The ones who did best were the ones who knew which number they were actually buying.