moving

Need to Sell Your House? Here's How to Let Go

Sarah Winfrey — Tue, 02 Oct 2018 08:00:12 +0000

When it's time to sell your home, whether due to financial necessity or another reason, it can be hard to let go. This is especially true if you have lived in a place for a long time and have a lot of memories tied to it. Maybe you brought your first child home there or it was the first house you bought with your significant other.

It's completely normal to feel sad about leaving a home that you have loved, particularly if you aren't leaving willingly. If you are selling because you need the money, because you're getting divorced, or because you have a new job in another location, this can make it even harder to let the old house go. Fortunately, there are ways to make the process easier on yourself. (See also: 5 Signs You're Ready to Sell Your House)

Focus on what you gain

Start by remembering what you stand to gain from selling your home. If you need the money, think about the debt you can pay off by selling the house. If you're struggling to pay the mortgage, consider what your life will be like without that stress every month. Consider the freedom you'll have, the better pay or office environment waiting at your new job, or the way you'll be better able to focus on other goals and values.

This may feel forced at the beginning, but make yourself list these things out. It will help to write them down where you can see them. Then, when you start to feel down about moving, look at your list and remember why you chose to sell in the first place. (See also: 8 Signs You're Paying Too Much for Your Mortgage)

Redefine "home"

You may find that your real home is wherever the people you love are. This may be your spouse, your parents, your kids, or friends who are like family. When you think of home in terms of people rather than in terms of a place, it can make it easier to leave a house that you have loved.

Neutralize the home early

Most realtors suggest making your home less personal so that it will appeal to potential buyers. This means removing family portraits, framed diplomas, and anything else personalized that screams you. While their intent is to make it easier for potential buyers to see themselves and their own things in your home, it can also help you let go, too.

Sure, it's hard to take your memories down off the wall. Once you're used to not seeing them there, though, you'll find yourself beginning to detach emotionally from the home. Slowly, you'll realize that you carry your memories within yourself — they don't require the house. If you're really struggling to let go of your home, it may be a good idea to do this earlier rather than later. That will give you more time to detach and will help you see your home as a product to be sold.

Say goodbye

Give yourself the time and space you need to say goodbye to your home in your own way. This will look different for everyone. You may want to throw one last big party at your house. On the other hand, you may want to kick everyone else out and spend time alone in each room, remembering the things that happened there and why you hold those memories so dear.

Some people find that it helps to go through some sort of goodbye ritual. They may want to burn sage in every room, or say a prayer or blessing. The important thing is that you find something you feel is right in helping you make peace with saying goodbye and moving forward.

Let yourself grieve

Grief is not a process you can complete overnight. Even if you effectively say goodbye to your house, you may find yourself thinking of it and feeling sad for a long time after your move. Instead of pushing these feelings away and telling yourself that they aren't helpful, let yourself feel them. You may experience more than sadness, as grief can take make forms; anger, confusion, frustration, and more. Acknowledge these feelings, recognize that you won't feel this way forever, and give yourself proper time to get over your loss.

It can be hard to leave a house you loved, but with time, your heart will heal and move on. Remember that one chapter closing means another is opening, so try to take an optimistic point of view in embracing the next adventure. You'll have a new place to call home, which means you get to make new memories there with the people you love. Eventually, you'll look back on your old home with a fondness that comes without sadness.

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This article is from Sarah Winfrey of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Are Starter Homes Still a Thing?

Dan Rafter — Mon, 25 Jun 2018 08:30:25 +0000

The old formula worked like this: When you were tired of renting an apartment, you'd buy a starter home. This starter home would be affordable and small. When your family started to grow, you'd sell that starter home and buy a larger residence.

Does this strategy still make sense? Should you invest in a starter home before purchasing what you might consider the home of your dreams?

Not surprisingly, the answer is complicated. But in most cases, a starter home is not necessarily the best financial move. That's largely because mortgage dollars are so affordable today thanks to historically low interest rates.

This doesn't mean that buying a starter home is a bad move, just that you shouldn't consider it an essential step. Here are some reasons why a starter home isn't always necessary anymore.

It's more affordable to buy a bigger house

Mortgage rates have been rising, but these rates are still at historic lows. As of mid-June, it was still likely that if you had solid credit, you could qualify for a 30-year, fixed-rate mortgage loan at an interest rate near 4.5 percent.

When interest rates are low, it's cheaper to borrow money. It also gives you more homebuying power. You can take out a larger mortgage loan and still be left with an affordable monthly payment, which means you can purchase a home with a bigger price tag.

Just be careful: You don't want to stretch your budget too far. Only buy a home that leaves you with a mortgage payment you can afford each month, whether it's a starter home or a more expensive residence. (See also: 9 Warning Signs You Can't Afford That New House)

Down payments aren't as much of a burden

Down payments have traditionally been a challenge to homebuyers. After all, 20 percent down on a home that costs $200,000 is $40,000 — a big chunk of money. The challenge of coming up with down payments has led many first-time buyers to less expensive starter homes. The down payments for these homes are smaller.

Today, however, there are a number of programs that require buyers to come up with smaller down payments. Fannie Mae offers a program that requires just 3 percent down, while many borrowers can qualify for a down payment of 3.5 percent for FHA loans. (See also: 5 Ways to Qualify for a Mortgage With a Small Downpayment)

Buying a starter home means moving twice

If you can afford a larger home right off the bat, you'll save yourself time and aggravation by reducing the number of times you have to move.

Moving is a hassle. And it's expensive. You want to do it as few times as possible. Skipping the starter home and moving right into a larger home can help you skip at least one move in your lifetime. And if you've ever been through a big move, you know how much of a benefit skipping one can be. (See also: Don't Forget to Budget for These Unexpected Moving Expenses)

A bigger home provides you with more flexibility

If you buy a home that's a bit too large — as long as your mortgage payments fit comfortably within your budget — you'll have more space and flexibility if circumstances change down the road.

Maybe your family starts to grow, or you take a remote job and need a home office. Maybe you have frequent out-of-town guests who need to stay the night. If you buy a starter home that's barely big enough to fit just you, as soon as you need more room, you'll have to start your hunt for a new residence. With a bigger home, you'll already have the added space for a significant other, kids, guest room, or home office.

When you're touring a home, don't just consider your space needs today. If the home is offered at the right price, and your interest rate is low, think of how your family might grow and how your needs might change. Those rooms that seem like extras today might turn out be invaluable in the future.

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This article is from Dan Rafter of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Best Money Tips: These Cities and States Will Pay You to Move There

Amy Lu — Tue, 17 Apr 2018 00:29:12 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found articles on cities and states that will pay you to move there, expensive things that are not worth the extra cost, and things that a neuroscientist says will make you happier.

5 Financial Risks Worth Taking

Rachel Slifka — Wed, 28 Mar 2018 10:00:07 +0000

They say no big reward comes without risk. That can be a hard pill to swallow, especially when it comes to our money.

Most of us would rather not put our hard earned cash at risk. With the tough economic times of 2008 in recent memory, people are still on edge when it comes to taking financial risks.

On the other hand, leaving your cash in a savings account isn't going to get you ahead of the game. In order to be successful financially, you will eventually have to face some risk. In fact, being too complacent with your cash can be one of the biggest financial risks of all.

Here are the financial risks that can be hugely beneficial.

1. Moving to a new city

Do you feel like your current location is lacking in career opportunities? Or perhaps rent is atrocious and you're finding it hard to get by? A move may be a solution.

There's no doubt about it — moving is expensive. You may have to break a lease and sign a new one, complete with security deposit. You'll probably have to pay for a moving truck, movers, new furniture, and more. Not to mention, your new city could come with a much higher cost of living. But, for some people, moving could be well worth it.

When I moved cities, even though I tried to make it as cheap as possible, I still incurred quite a few expenses. But financially and personally, it was worth it to me. My hometown is small with very few opportunities, so I knew I would have a better shot at earning a bigger income in a larger city. Fortunately, that turned out to be true. (See also: Here's How Much Life in the Big City Will Cost You)

2. Investing in graduate school

Graduate school is a big investment, so it's important to weigh whether or not the expense is worth it in the long run. Tuition costs are ever increasing, books are expensive, and if you choose a full-time program, you are losing out on income you could have earned while working instead.

While it is a big investment, a graduate degree can help you find a higher paying job with more opportunity for growth. And some high paying careers cannot be achieved without some sort of degree in higher education.

Before you sign up for graduate school, take time to truly consider what you want to do and whether it will benefit you financially. Be sure to consider how you can market yourself, even without an advanced degree. While a graduate degree can certainly help in the job process, there are many other factors that determine whether or not you receive a job offer. (See also: 7 Things to Consider Before Paying for an MBA)

3. Starting a business

Starting a business is outside many people's comfort zone. It can cost significant cash to start and to grow a business from scratch. There is also uncertainty in working for yourself if you've only ever worked with for a traditional 9-to-5 employer.

But starting a business can come with many personal and financial benefits. For one, you keep all of your own profit. If the business is successful, you are the one who gets the big payout. For many people, owning and operating their own business is a personal and career preference as well. If you've been dreaming about starting your own business, develop a financial plan before you dive in head first. (See also: Starting Your Dream Business Is Easier Than You Think — Here's How)

4. Investing

The stock markets are full of ups and downs and uncertainty, but the payoff can be huge. Most, if not all, experts would agree that failing to invest is riskier than not investing. While leaving your money in a savings account might ensure it doesn't lose much value in the short term, it won't gain much value, either. In fact, due to inflation, you are likely to lose value over time.

Investing thoughtfully, however, can give you the opportunity to grow your money at a much faster rate. Investing certainly isn't a get-rich-quick scheme, but overall, it can pay off big time with smart decisions. (See also: How the Risk Averse Can Get Into the Stock Market)

5. Buying a home

The housing market isn't necessarily as stable as it used to be, and a home is a major cost. But can it be worth the risk?

There are many factors to consider when deciding if purchasing a home is worth the risk. You'll want to consider resale value, in the event that you need to move. Location, school district, quality of home, and neighborhood are all other important factors to consider. If you are planning to stay in a location long-term, a house may be a smart investment. (See also: 7 Worst Reasons NOT to Buy a House)

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This article is from Rachel Slifka of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

7 Questions to Ask Before Moving Out of State

Kat Tretina — Fri, 23 Feb 2018 09:30:09 +0000

Growing up in Pennsylvania, I learned to dread the winter months. The cold and snow would leave me feeling depressed and miserable. I dreamed of moving somewhere warmer, but I was afraid of the high cost.

After months of waffling back and forth and saving every dime I could, I finally took the plunge and moved to Florida. And while it was expensive and scary, I've never regretted it.

Whether you're contemplating a job offer in another state or simply want a change of scenery, relocating is a big decision. Before deciding one way or another to move hundreds or even thousands of miles away like I did, ask yourself these questions.

1. What is the cost of living?

If you're reviewing a job offer or looking for a new job in another state, make sure you keep in mind the cost of living. Even if you earn a higher salary in your new state, you could still end up in worse financial shape than before if living in the area is too expensive.

Depending on your intended location, you could need thousands more dollars to maintain the lifestyle to which you're accustomed. The cost of everything from housing to groceries can significantly add to your expenses.

Use a cost of living calculator to figure out how much you'd need to earn to afford living in your new city. Say you lived in York County, Pennsylvania and earned $50,000 per year. If you wanted to move to San Diego, where housing costs 160 percent more, you'd need to earn at least $73,673 to keep your same standard of living. (See also: Here's How Much Life in the Big City Will Cost You)

2. Who will care for family members?

If you have elderly or disabled family members, coming up with a plan for their care should be part of your relocation decision. If you cannot be there with them, you'll have to find a way to provide for them otherwise. Depending solely on outside care or nursing home facilities can be cost-prohibitive for your relative; a recent study by Lincoln Financial Group found that a private room in a nursing home costs an average $102,911 per year.

If that cost is beyond your family's budget, and they were depending on you to some extent for help with daily life, moving to a new state may not be practical or financially wise.

3. How will you adjust to the climate?

Although some moves can be beneficial in terms of climate (hello, beaches!), some people struggle adjusting to new weather conditions. If you're from a state with four seasons, moving to a warmer place can be hard. You might find that you miss the snow and changing seasons. If you move from a sunny place to somewhere with long, gloomy winters or regular rain, it can be a strain on your mental health.

If at all possible, spend some time in town during the state's poorest weather season to see how you cope. You might find that you can handle the cold better than you expected, or you might discover you hate it and want to stay put.

4. How much will is cost to move?

You know moving is expensive, but until you see the real numbers, it's hard to get an idea of how much it really will hurt your budget. According to the American Moving and Storage Association, it costs an average $5,360 to move to a new state.

If you have to break a lease or struggle to sell your home, you might need to spend thousands more to make the move possible. (See also: Avoid These 6 Common Mistakes When Moving Across the Country)

5. Is there a state income tax?

If you're in a state like Florida or Texas, which do not have a state income tax, moving to a place that does can come as a big shock. The raise you carefully negotiated at a new job might be negated by the increased taxes taken out of your paycheck.

6. What college savings programs are available?

If you have children, saving for their education is likely a major priority for you. And with current four-year tuition costs reaching an average $9,650 for in-state schools and $33,480 for private schools, that's a smart decision. However, where you live can impact your college savings.

All states offer at least some form of a 529 plan, such as a prepaid tuition or a college savings program. However, some states only offer one type, which can limit your child's educational options.

In addition, some states offer tax benefits for contributing to a 529 plan, while others do not. Switching to a new state could result in losing those benefits, reducing how much you can save each year. (See also: The 9 Best State 529 College Savings Plans)

7. Will you feel isolated?

Beyond financial and logistical issues, moving can be emotionally exhausting and difficult to navigate. If you grew up in one area and became attached to the neighborhood, moving to a place you don't know, without friends or family, can be lonely and isolating. You might find that even the best job is not worth the move without your loved ones.

However, other people thrive on the unknown and the sense of adventure that comes from entering a new place and meeting new people. Only you can know what works for your situation. By asking yourself these questions and preparing for a move ahead of time, you can ensure you make the best decision for you and your family.

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This article is from Kat Tretina of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

7 Reasons You Need to Downsize

Mikey Rox — Wed, 22 Nov 2017 09:30:10 +0000

It can be a tough decision to leave your home, especially if you've worked hard for it or it's the residence you've always dreamed of owning. But for many people, downsizing isn't so much of an option as it is a financial necessity. And if any of these situations apply to you, it may be time for you to do the same.

1. You're house poor

You're house poor if all of your income is going into your home (your mortgage payments, maintenance, property taxes, and utilities), leaving you with very little money to do anything else.

This isn't only problematic from a quality-of-life standpoint (would you like to go on vacation anytime soon?), but also from a debt-avoidance perspective. You're one small financial crisis away from throwing your whole world out of whack. If you can't seem to save any money because your home is eating it up as fast as it comes in, it's time to investigate other options — like finding a less costly place to live. (See also: 8 Signs You're Paying Too Much for Your Mortgage)

2. You're ready to retire

If you've lived in your home for many years and you've kept up on maintenance, chances are you're looking at a decent payout if you decide to sell. Real estate prices are on the uptick again, and you aren't required to pay capital gains tax on the first $250,000 of your home sale if you're single, or $500,000 if you're married. You must have owned and lived in the home for more than two years to take that exemption.

If you got a late start to retirement savings or had to dip into that fund along the way, downsizing could be exactly what you need to set yourself up for financial success in your golden years — or at least very least, avoid poverty.

3. Your kids have flown the coop

Your decision to have children naturally dictated the type of accommodations you needed, but once they're out of the house, what's the point of paying for all the rooms that no one is using? If your kids give you grief for putting their childhood home on the market — a reason that many aging parents give for staying put when they should move on — suggest that they pay a portion of your mortgage. They'll see things your way soon enough. (See also: 7 Money Moves to Make as Soon as the Kids Move Out)

4. You want a change of scenery

Nobody enjoys moving, but we all need a change of scenery every now and then. In fact, that's all the reason you need to pack up and start fresh someplace new. If you're fed up with the cold weather, head someplace warmer. If you don't like the noise of the city, set up shop someplace quieter. You only live once — and the clock is ticking.

5. You want more time on your hands

Even small single-family houses require a lot of attention. From maintenance to regular cleaning, a one- to two-bedroom home can easily zap a daytime's worth of hours from your week. Less space demands less of your attention, and that all adds up to more time for yourself.

6. You want a lower mortgage

You don't have to be house poor to want a lower monthly mortgage payment. In fact, having the lowest mortgage payment possible while still maintaining a quality of life that satisfies you should be the goal for everyone. Sell the money pit and find something cheaper — then treat yo'self for being so savvy with your cash.

7. Your health is declining

If you're getting older and you live in a house with a lot of stairs and levels, it's important to consider the future and how your home fits into that. Do you want to spend money that you may need elsewhere to outfit your home to accommodate your needs as you age? It's an option, but not a cheap one. Your best bet may be to spend that money on a ranch home or a retirement or long-term care facility where you and your family will have more peace of mind. Plus, at the latter, you'll make new friends and play bingo. I'd like to move in right now.

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This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Avoid These 6 Common Mistakes When Moving Across the Country

Emily Guy Birken — Mon, 13 Nov 2017 08:30:12 +0000

Last summer, my family and I moved from Lafayette, Indiana to Milwaukee, Wisconsin so that my husband could take a new job. Once we got settled in our new house, I politely informed my husband that I would "never, ever move again, so don't even think about asking me."

This reaction to moving is a common one. Moving is incredibly stressful, requiring a great deal of planning, money, time, and flexibility as situations inevitably change. On top of all that, there are a number of easy mistakes to make when planning a move that can add to the stress and the cost of it all — especially if you are moving across the country.

Before you plan your next major move, make sure you protect yourself from these common moving mistakes. (See also: 10 Ways to Save on a Long-Distance Move)

1. Falling victim to a moving scam

Since you're relocating to a different state, it's completely understandable why you might want to hire movers rather than pack up and haul your own stuff in a rental truck. However, it's important to make sure you hire a moving company whom you can trust, since there are a number of scam companies (known in the industry as "rogue operators") out there pulling shady deals.

According to the Federal Motor Carrier Safety Administration (FMCSA), this is what you can expect from a legitimate moving company:

An in-home estimate. Long-distance moving costs are calculated on the distance your stuff has to be hauled and the weight and size of your goods. If a mover offers you a cost estimate sight unseen, it's a red flag that you shouldn't trust them with your stuff.
A copy of Your Rights and Responsibilities When You Move. Federal regulations require all registered movers provide their customers with this document.
A contract that includes price estimates, pickup and delivery dates, and insurance coverage amounts.
To pay at the time of delivery. Reputable companies do not request upfront payment.
While it's possible for a moving company to legally make an estimate that is too low, federal law requires registered movers to complete delivery as long as you pay 110 percent of the estimated price.

If any mover you contact does not offer these, then you should choose a different mover. You can also research the background of any interstate mover, including complaints, safety information, licensing, registration status with the Department of Transportation, and company contact information on the FMCSA website. (See also: Moving? Don't Skimp on These Critical Expenses)

2. Waiting until the last minute to plan your move

When we left Lafayette in June 2016, our movers cleared out the house on a Thursday, but the Milwaukee temporary housing provided by my husband's company did not kick in until Saturday. We had two nights in an empty house before we could arrive in Milwaukee.

This particular moving discomfort could have been avoided if we had planned the move better. We waited to set up the temporary housing, which meant we had fewer choices of which nights we could stay.

Our two days of no beds was a relatively minor discomfort. But waiting until the last minute to find a mover or make other major moving plans can cause potentially huge problems. If you have to scramble to find a mover during prime moving season — between May and September — then you are less likely to have the necessary time to do your due diligence to find a reputable mover. You may also find that all of the local rental trucks are already spoken for if you don't call ahead.

3. Forgetting to set up utilities in your new home

Moving day is generally a long and exhausting slog. It's even worse if you finally get into your new home, only to find the lights won't turn on because you forgot to get the utilities set up in your name. This kind of mistake is even tougher to deal with if you move on a weekend and you have to wait until business hours on Monday to make the call to your new utility companies.

Either your real estate agent or your landlord should be able to provide you with the contact information for each utility you will need in your new home. About two weeks before your move, contact the local utility companies to give them ample time to turn everything on and/or transfer everything into your name.

4. Putting off purging, prioritizing, and packing

It can hardly be a coincidence that no one has ever coined the expression "as fun and exciting as packing!" Packing is the opposite of a good time, and many a mover has put off doing the important work of sorting and packing their stuff until moving day.

There are a couple of reasons why this is a big mistake. Not only does it add to your stress as you get closer to your move, but you also end up putting off the process of prioritizing and purging your stuff. You may end up packing things you would have been happy to sell or give away, adding to the total cost of your move. (See also: Moving? 3 Things to Take, and 3 Things to Leave Behind)

5. Forgetting to label your boxes

Even though my family has been in our new home for over a year, there are still piles of unopened boxes in our basement, each labeled with some variation of the world "miscellaneous."

Don't get me wrong, there is a bit of a Christmas morning feel to opening these mystery boxes. I was delighted to find some of our kitchen utensils (along with a couple of framed pictures, a purse or two, and some shoes) in one recently-opened box. But my life would be a lot easier if I knew what was in each box before having to open it.

I had forgotten just how long the unpacking process can take, and I had assumed that I'd be unpacking these boxes within a few weeks of packing them, so I'd remember what had been put into "miscellaneous" boxes, sweet optimist that I was.

As you pack, make sure you label each box as specifically as you can. You'll be much happier knowing you can put your hands on important things and knowing which boxes can wait a few weeks (or more than a year) to be officially unpacked.

6. Thinking of it as a sprint, when it's actually a marathon

Part of the reason why I hate moving is how much upheaval it causes in my family's life. It's my tendency to try to rush through that upheaval as quickly as possible in order to get life back to normal. When I was a single woman in my 20s, I would unpack from moves in a two-or-three day whirlwind, refusing to rest until each and every box was emptied and broken down, and all of my possessions had a new home.

But moving cross-country with a family in tow doesn't offer the same kind of opportunities for such an unpack-a-thon. Instead of trying to get everything done as quickly as humanly possible, it's psychologically better to work steadily but surely, on everything you need to do for pre-move, moving day, and the great unpacking. That will help you maintain the energy you need to keep going through the long process of relocating.

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This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

9 Retirement Hotspots That Are Cheaper Now Than Ever Before

Nick Wharton — Wed, 18 Oct 2017 08:30:11 +0000

Financial considerations are the biggest factor for many people when deciding where they want to enjoy their retirement years. As the strength of the dollar continues its hold against other currencies, it’s providing us with far more purchasing clout when it comes to buying other currencies.

This in turn is helping to make many destinations even more affordable to U.S. citizens who are looking to decamp to foreign locales. Here are nine retirement hot spots that are cheaper than you thought. (See also: Retire for Half the Cost in These 5 Countries)

1. Panama

With its interesting mix of advanced amenities and lush natural landscapes, Panama has been one of the most popular retirement hot spots in Latin America for a number of years. The capital, Panama City, is a skyscraper-filled, modern metropolis with a well developed infrastructure to rival any city in the U.S.

The U.S. dollar is actually legal currency in Panama so you’ll be able to see just what value you’re getting without any conversions. The cost of living in Panama is comparatively low. Numbeo puts it at around 26 percent of what it is in the U.S., with expenses such as health care and real estate working out extremely cheaply. (See also: 5 Countries Where You Can Retire for $1,000 a Month)

2. Mexico

Hopping over the border to Mexico has always been a convenient option for U.S. citizens wanting somewhere nearby to retire to. Rich with incredible culture, fascinating history, a great coastline, and a mouthwatering cuisine, Mexico is both familiar and exotic at the same time.

The exchange rate hit a high in 2017, meaning U.S. dollars go further there now. That, combined with a cost of living of around 60 percent lower than in the U.S., means your dollar will go a lot further in Mexico than it would at home.

While drug-related crime has risen in recent years, there are many retirement communities that are completely safe. (See also: How Almost Anyone Can Afford to Retire in Mexico)

3. Spain

Spain frequently tops the list of the most popular retirement destinations for Europeans. It’s little wonder when you consider the number of major cities, the stunning beachside resorts along the coastline, and the slow pace of life.

The dollar is closing in on par with the Euro and the country has only just pulled out of a financial crisis that began in 2008. As a result, U.S. citizens have more purchasing power than ever in Spain right now, making the prospect of retiring here even more enticing. The cost of living stands at about 27 percent lower than the U.S., according to Numbeo, so it’s no surprise that there are over 5.5 million foreign nationals living in Spain.

4. Ecuador

If you’re a lover of the great outdoors, then Ecuador could be the ideal choice as your retirement location. It’s home to portions of the Andes mountain range and the Amazon Rainforest, some of the most untouched Pacific Coast beaches in South America, and the remarkable Galápagos Islands.

Pricewise it comes in at around 50 percent cheaper than the U.S., according to Numbeo, so you’ll have plenty of cash left over for exploring and adventuring each month. Ecuador adopted the U.S. dollar in 2000 as its official currency so your nest egg won’t be affected by exchange charges or currency fluctuations. (See also: 5 Amazing Places to Retire Abroad That Anyone Can Afford)

5. Costa Rica

Costa Rica is famous among surfers all over the world for its awesome swells, but in recent years it’s also been making waves of a different kind. People of retirement age are flocking here for its year-round tropical climate, stunning beaches, and green landscapes.

Numbeo reports that the cost of living is around 34 percent less in Costa Rica, so it’s easy to see why up to 100,000 American citizens have decided to call Costa Rica home. Exchange rates to the Costa Rican Colon have been steadily rising over the past year, peaking at around 591 to the dollar.

6. Malaysia

Malaysia is one of the most diverse countries in Asia, making it a continuously interesting place to live. It has influences from Malay, Chinese, and Indian populations clearly visible in the culture and cuisine, with an added bonus that English is widely spoken. It also has bustling, modern cities that have the same amenities, restaurants, and funky bars that you’re used to in the U.S.

Many retirees enjoy a better standard of living here than they would be able to afford in the U.S. thanks to the cost of living being around 52 percent lower, according to Numbeo. Health care is one of the biggest reasons that retirees come to Malaysia — its quality is so good that a medical tourism boom has sprung up.

7. Malta

Thanks to the laid back island life with year-round sun, Malta is a popular destination for retirees. This tiny archipelago of just three islands lies in the Mediterranean Sea between the South coast of Italy and North Africa and has a population of around only 400,000.

Many of Malta’s residents are English speaking, and one of the islands, Gozo, is home to a particularly large expat community with a big American contingent. Numbeo reports that prices here are around 13 percent cheaper than in the U.S. overall, but it’s possible to live for much cheaper.

8. Portugal

Europeans have been retiring to Portugal for decades, attracted by the warm weather, the picturesque coastline, and government tax breaks offered to overseas retirees. But the secret is slowly beginning to reach U.S. shores as Americans start to realize just what they’re missing out on.

Portugal has some impressive infrastructure boasting world class golf courses, fantastic restaurants, and some of the highest rated health care in the world. Despite all of this, the cost of living here is still relatively low, and you’ll pay around 34 percent less in Portugal than in the U.S., according to Numbeo.

9. Thailand

One of the most popular tourist destinations in the world, Thailand is also a hot spot for retirees from all over the globe. Thanks to its diversity, it’s possible to settle down in a vast city, a lush green mountainous region, or even a secluded island with golden beaches.

Despite its popularity, Thailand remains one of the cheapest countries in Asia to live in, with costs at over 43 percent less than in the U.S., according to Numbeo. The exchange rate has dropped in recent months, but is still considered favorable for expats wanting to move here now. (See also: 5 Countries That Welcome American Retirees)

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This article is from Nick Wharton of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Choose the Perfect Country to Retire In

Nick Wharton — Mon, 16 Oct 2017 08:30:10 +0000

Many of us harbor dreams of retiring overseas in some far-flung, exotic country. Whether it’s for pure adventure, to make retirement dollars stretch further, or both, retiring abroad is becoming more common. But choosing exactly where to go can be difficult. Without proper planning and consideration, a country that appears perfect on the surface could end up being a nightmare. (See also: 9 Things to Know Before Retiring Abroad)

I know just how daunting the task of choosing a country can be. I’ve been living a semiretired life in multiple countries over the past eight years and I’ve written many articles on early retirement. I’ve found it helps to start with a list of all the countries where you can envision yourself living. Maybe it will be made up of places you’ve fallen in love with while visiting in the past. Perhaps you’ll include countries you’ve never visited, but have heard are great retirement havens for Americans. From there, follow these guidelines to shorten your list and eventually pin down the perfect retirement destination for you. (See also: Retire for Half the Cost in These 5 Countries)

Figure out your finances

Finding a country that fits your finances is probably the most important part of the puzzle. It’s crucial that you opt for someplace where you can enjoy the lifestyle that you dream of without draining your bank account in the process. (See also: 5 American Cities Where You Can Retire On Just Social Security)

As a first step, you need to calculate exactly how much you have in your retirement savings and how much you can withdraw every month. Then, project how much income you’ll have from other sources, such as Social Security or any private pension or annuity plans you have. Account for any taxes you might have to pay, and come up with a ballpark figure for how much you’ll be able to spend every month during retirement. (See also: 5 Incredible Places to Retire Abroad That Anyone Can Afford)

Rule out unaffordable destinations

Once you have your estimated income, start researching the cost of living in each place on your dream list and determine whether it fits your finances. Tools like Numbeo and Expatistan are great for estimating the cost of living in different countries. Cross out the places you can’t afford. This will naturally narrow down which countries are realistic to put on a short list. (See also: 5 Countries Where You Can Retire on $1,000 a Month)

Check out the quality and affordability of health care

Health care is one of the most significant factors to take into account when choosing a retirement destination. Medicare generally won’t cover you outside of the U.S., so you need to put a plan in place for how you’ll afford any medical requirements. Fortunately, some of the most affordable countries to live in also have top class medical services, but it’s something you’ll need to research for each country on your list. (See also: Don't Let These Expenses Spoil Your Retirement Abroad)

If the health care is cheap, it may be possible to just pay as you go, but you should also look into suitable insurance plans. In particular, think about how you’d pay for treating a major illness or catastrophic injuries.

Take your hobbies and interests into account

No doubt you have a good idea of how you’d like to fill your free time once you’re not working anymore. But make sure you double check that you’re able to do the things you love most in the country of your choice.

If you’re a keen golfer, there’s no point in selecting a country that has no golf courses, as it’s probably something you’ll want to do more of in retirement. Don’t just assume that every country will have the facilities or resources you need for your hobbies and pastimes.

Consider your security

Unrest and crime are two factors that can quickly endanger your life, affect your finances, and hamper your dreams. Though it’s impossible to predict what will happen in the future, it is possible to make educated assumptions based on the historical and current security situation in the city, region, and country you’re considering. Is it somewhere prone to civil unrest, gang activity, or petty crime? Are there upcoming elections that may significantly alter the political landscape?

Check out the U.S. State Department’s travel website, which provides advice on every country in the world. Also read articles and check with local residents to see whether any problems reported in the media ring true in real life.

Research visa options and other relevant laws

Residency laws differ from country to country and can come with significant costs attached. Check these requirements thoroughly. In most cases, you can find information put out by the country’s immigration office online. You can also contact the closest consulate or embassy of the country you’re considering. Often, you will need to apply for residency while you’re outside that country, but check first. (See Also: 5 Countries That Welcome American Retirees)

Consider other relevant laws and regulations, too. Perhaps you won’t be allowed to work if you’re on a retiree visa, or you won’t be allowed to buy property in certain areas. You may or may not be subject to local taxes, as well. Remember also that moving overseas does not preclude the requirement to pay taxes in the U.S., even if it’s necessary to pay them in your new home. And even if you don't owe anything to Uncle Sam, it's possible you still need to file a tax return. You'll have to meet certain status and income requirements before the IRS says you don't need to file a return.

Consider cultural fit

Moving to a new country, not understanding the language, and trying to adjust to the culture all at the same time can be a singularly isolating experience. Ask yourself if you’re ready to learn a new language if necessary, and whether you’re able to change to fit in with the culture of the places you’re considering. Are there things that you don’t like about a particular culture that you think you’d grow accustomed to? On the other hand, could annoying local biases or customs that you’ve put up with on a vacation grow unbearably wearisome once you’re living in that place full-time?

Get to know the weather

It’s a good idea to check year-round weather forecasts, too. Even if you think you’re familiar with the outlook somewhere, it could drastically change throughout the year. If you’ve always visited during high season, make a conscious effort to check what the weather is like during low season. There’s often a reason why tourists don’t visit then. Temperatures may rise or drop to uncomfortable levels, storms may make living dangerous or at least inconvenient, and drawn-out rains may just make everyone miserable. Many weather websites or destination-specific websites have data on historical temperatures and precipitation for every month of the year. (See also: 33 Places to Retire If You Love the Rain)

Do a test run

Possibly the biggest mistake that retirees can make before heading abroad is to take the plunge without having tested the waters first. Do yourself a big favor and complete a test run in the country that you settle on. It may cost you a little extra, but the expense is usually worth it.

Consider where you’ll go if you don’t like your new retirement country. Maybe you’ll want to move back to the home you own in the U.S. If so, it makes sense not to sell right away. Perhaps you can rent it out temporarily while you do your test run.

Then make a semi-permanent move. Rent a temporary home, preferably furnished, and get by with whatever you can take in suitcases. Give yourself enough time to experience different seasons, get to know a few people, and see if your monthly budget will really work. If it doesn’t work out, you may be disappointed, but at least you’ll have minimized your moving expenses and you’ll have a place to go when you move back. (See also: 4 Questions You Need To Answer Before Relocating in Retirement)

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This article is from Nick Wharton of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Moving? 3 Things to Take, and 3 Things to Leave Behind

Annie Mueller — Mon, 17 Jul 2017 08:30:16 +0000

You're packing up and getting ready to move into your new place. Of course your furniture and personal belongings go with you. But what about items that are yours, but also seem like part of the house you're leaving behind? Here's a helpful list to guide you through what you should take and what you should leave.

1. Take your appliances

Unless your home sale contract specifically includes an appliance, all of your appliances belong to you. The only exception is the oven, as some lenders require that an oven be installed before they will approve a home loan. But all other appliances — washer, dryer, refrigerator, microwave, dishwasher, ice maker, and so on — are yours to take unless stipulated otherwise.

2. Leave behind hardware and fixtures

Here's a general rule of thumb: If it would damage the house to remove it, leave it behind. If taking down the wall-mount for the TV will leave damaged paint and holes in the wall, leave it up for the next occupants.

Another guideline is to leave behind any installed items that are necessary for the house to properly function. For example, don't remove the water softener that connects the water pipes and leave the next occupants with disconnected plumbing. (This happened to us with our first home purchase!) Unless you have permission from the buyers to take items essential to the basic functions of the house, they should stay where they are. (See also: 5 Money Moves to Make Before Moving Out on Your Own)

3. Take your sentimental or valuable decor

As a general rule, items like light fixtures and cabinetry hardware should stay with the home. However, if you've hung a chandelier that is a family heirloom over the dining table, you don't have to leave it behind. You can take the decorative items or fixtures that have particular value to you, sentimental or otherwise. Specify in your contract which fixtures will go with you so there's no confusion.

4. Leave behind custom-made items

Those window treatments you had made to perfectly fit the front windows should stay with the windows. Likewise, if you've had shelves, shutters, blinds, or other items built or installed to match a precise space in your old home, let them stay. These custom-made items are often built into the house in a way that would damage or detract from its value if removed.

5. Take your outdoor furniture

If you have an outdoor dining set and a grill on the patio, a swing in the front yard, and a bench in the garden, those belong to you. Pack them up and take them along. Lawn equipment, such as a lawn mower or trimmer, hoses or rakes, should move with you, too. You can also take any houseplants, and outdoor plants in smaller, free-standing pots. (See also: 6 Surprising Ways a Houseplant Can Save You Money)

6. Leave behind the landscaping

Don't move potted plants large enough to function as a landscape feature: for example, that giant ceramic pot filled with annuals that takes up half of the front flower bed. Certainly don't dig up plants to move with you, no matter how much you love them. If you can't bear to leave your grandmother's peony bush behind (I understand the pain), take a clipping or get permission from the next occupants to dig it up. (See also: 6 Ways to Improve Your Curb Appeal for Next to Nothing)

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This article is from Annie Mueller of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

4 Questions You Need To Answer Before Relocating in Retirement

Matt Bell — Mon, 26 Jun 2017 08:30:12 +0000

Do your post-career plans include a change of address? If so, you're not alone. A 2015 Bankrate survey found that one in five Americans age 65 or older would consider moving to a different city or state for retirement.

If a change of scenery in your later years sounds appealing, the most important question to consider is, "Why?" It's easy to romanticize the benefits of living in a different city. So, before you start packing boxes, here are four key questions that'll help make sure you're relocating for all the right reasons. (See also: 4 Exciting, Affordable American Cities to Retire In)

How would a move impact your finances?

Many people who move in retirement do so for financial reasons. In fact, nearly 75 percent of people age 65 or older said finding a lower cost of living was "extremely important" when thinking about where to retire, according to Bankrate.

Moving for monetary reasons can make sense as long as you look at all sides of the equation. If your retirement account isn't as fully stocked as you'd like it to be, selling a home that you own outright or have a lot of equity in and buying one that costs less may be wise. Just be sure to factor in other ongoing costs in the town you're thinking of moving to, such as property taxes, insurance, sales taxes, and more.

You can get a feel for how your cost-of-living may change by using an online calculator, and the Tax Foundation has information about state and local taxes. But do some additional checking. Talk with a realtor to ask about property taxes, and call an insurance agent to see how your homeowners and vehicle insurance costs may change.

How would a move impact your extended family?

A couple of years ago, an older couple I know sold the home they've owned for many years and moved closer to two of their adult children and their families. They're enjoying spending more time with their grandchildren, attending various school and sports events. And, when the woman in the couple had to be hospitalized recently, their adult children didn't have to fly across the country to be there for her.

On the other hand, my in-laws live about five hours away. When my father-in-law recently became ill and eventually passed away, it was very challenging for my wife and our whole family to be there as much as we would have liked.

Relocating to be closer to family is generally a good idea. However, there are also some risks. For example, the adult children you move to be closer to could end up moving because of career or other reasons.

Be sure to manage everyone's expectations as well by having a conversation with your adult children before you move. How often will you get together? How available will you be to baby-sit your grandkids? And how much help might your adult children provide if and when your health declines?

How would a move impact your friendships?

When considering a move, it's easy to make the mistake of overstating the importance of some factors while underestimating others. For example, Midwesterners are especially open to the idea of relocating for retirement, according to Bankrate, mostly because of their desire for better weather. However, weather is something people tend to get acclimated to fairly quickly, whereas it takes time to develop true friendships. Don't be too quick to move away from close friends.

How would a move impact your future medical care?

Our quality of life is largely dictated by the quality of our health, and as we age, our health is likely to become more fragile. That makes easy access to high quality health care an especially important factor in where we live during our later years. How is the health care in the town you're thinking of moving to? Here are some resources that can help answer that question.

Medicare's Hospital Compare database keeps tabs on hospitals throughout the country, monitoring their 30-day readmissions and deaths by surgical procedure, patient ratings, and more.

The Agency for Healthcare Research and Quality provides state health score cards that look at how the health care in each state compares to national benchmarks.

The Robert Wood Johnson Foundation maintains a database of health care reports, rating hospitals in each state on a wide variety of measures.

Take your move for a test drive

One final idea: If you're thinking about relocating in retirement, before you pull up stakes and hire movers, consider taking an extended vacation to the area you're considering. That'll help you figure out if it's just a nice place to visit, or you would actually want to live there.

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This article is from Matt Bell of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Live a Retired Life Before Retirement

Nick Wharton — Fri, 02 Jun 2017 08:30:07 +0000

Many of us dream about being able give up the day job and settle into a life of freedom, flexibility, and financial security in retirement. But unfortunately for many Americans, this dream is getting further and further out of reach. The reality is that the average age at which U.S. citizens are able to retire is on the increase.

Being financially prepared is rightly a large concern, particularly because people tend to make big plans for when they do finally retire. It also means that some people put off following their dreams with hopes that they will be better able to afford them later in life.

But if you're sensible with your savings and clever with your planning, it's possible to find a balance between securing a comfortable retirement and still living life to its fullest.

Take more time off

Taking vacation is something that shoots fear into the hearts of millions of people. Reasons for this vary from being worried about the amount of work that we'll face when returning to the job, to fears of losing our job altogether as a result of taking too much time off. It's a sad fact that the majority of Americans don't take their full vacation allowance each year, with 55 percent reporting leaving days unused, according to Project: Time Off.

If you're among the large number of Americans who don't use their vacation days, then the first step to getting more holidays is simply to take them. Booking your vacations far in advance will allow your employer to plan effectively for the time that you're not there. It also gives you time to help ensure that whoever is covering you knows what they are doing and is properly prepared.

If you're already using your allotted time off, consider asking for more. Requesting extra vacation is understandably daunting for many people, but as the old saying goes, if you don't ask, you don't get. It helps if you can provide justification for your extra holiday time, like a dream trip to Europe, and it's even better if you can demonstrate it will have a positive effect on your productivity. In fact, a study by the Harvard Business Review directly linked having more vacation days to an ability to get work done quicker.

Another option that many don't even consider is to take unpaid time off. Though this may seem counterproductive, it's basically like buying extra vacation days. If you value your time off then it can work out to be very cost effective.

Ask your employer about "banking time," which basically allows you to work overtime shifts for regular pay (instead of the regular time-and-a-half), and then use those banked days to extend your holidays or take a few extra days off throughout the year when you need a break from the grind.

Focus on discounted, cheap, and free experiences

A great way to enjoy the quality of life that you crave without breaking the bank is to take advantage of discounted and cheap experiences. You might have a list of things that you want to do, see, or accomplish in your lifetime that you're putting off because you think it's too expensive. Instead, try looking out for when it's possible to do these things on the cheap.

Always wanted to visit a certain country? Research when high season is and make a plan that allows you to go in low season instead. This will save you money on flights, accommodations, and many activities to do while you're there.

Create a bucket list with a twist. Rather than containing activities that cost money, focus on experiences which cost little but provide you with a high sense of personal achievement. Physical activities are good for this, like hiking a certain mountain route or running a marathon, as well as things that will tax your brain like writing a book or learning an instrument.

Move somewhere cheaper

Lots of people envision moving away to a rural area or a tropical place when they retire, but why put it off until then? Moving to a cheaper city, state, or even country could allow you to live out your dreams, save more, and work less all at the same time. If you're not tied to your home by your job, then it doesn't necessarily even have to be a permanent move. You could spend half your time in the cheaper place having fun while still saving money.

Numbeo ranks the U.S. as one of the most expensive places to live in the world. This means there's a lot of choice if you are looking for somewhere cheaper to settle down abroad. With 8.7 million Americans living overseas, you won't be alone. There are many attractive, cheap locations that could be the perfect place to call your new home.

If you don't know where to start, write a list of what's important to you in your everyday life and research which places can accommodate those aspects of your life. Lots of countries in South America, Asia, and Europe are significantly less expensive than the U.S. but still offer a great standard of living.

Moving to a new country isn't a decision to be taken lightly, and definitely not one that should be made based purely on cost. You need to be sure that the move is right for you and is one that will have a positive impact on your life. But there's no need to hold off until you're 65 to move to an amazing location.

Work from home

If your career is getting in the way of living the life you want right now, then perhaps it's time to start thinking about changing to something that will allow you to do this. The office environment is rapidly transforming, and working from home is no longer a rare and prized entitlement for the lucky few. If you don't have to spend time commuting or dressing for an office environment, you can free up time to do more of what you want to do.

Lots of employers are becoming more flexible when it comes to this idea and there is a wide range of opportunities that are well suited for remote work. Advancements in technology have made remote working progressively easier, with a Gallup survey showing that 43 percent of employed Americans spend some portion of time working from home.

Some industries that have embraced remote working include finance, insurance, and information technology, so it's a bonus if you already have a background in one of these fields. But even if you don't, the trend of working from home is growing, and may hit your industry soon.

Don't confuse working from home with doing less. It's not a way to ease into the retired life in that sense. What it does bring is flexibility around when you work, as well as potentially huge savings in the time wasted getting to and from the office. It's also common for it to lead to increased productivity thanks to having fewer distractions at home than in a typical office environment.

This article is from Nick Wharton of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Would You Move to One of These States to Avoid Taxes?

Andrea Cannon — Fri, 06 Jan 2017 10:00:16 +0000

Some states have no state income tax — but at what expense?

If you're thinking of moving to one of the seven states with no income tax, consider that you may not actually be saving much money in the end, due to higher sales taxes, higher property taxes, and other additional costs. After all, these states can't just forego taxes altogether as a source of revenue; they simply make up the money somewhere else.

So how do you assess how much you're really saving, if anything at all?

The States With No Income Taxes

Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming have no state income tax. Residents of New Hampshire and Tennessee are also spared from state income tax, but have to pay taxes on dividends and income from investments. Other states (such as Kansas, Louisiana, Michigan, Nebraska, Ohio, and Wisconsin) have considered forgoing state income tax, as well, because it tends to result in economic and population growth throughout the state.

These states argue that cutting the state income tax can help to create jobs and prevent workers from leaving the state.

How Much Are You Really Saving?

For this example, let's compare living and working in California to Washington. Let's say your personal income is $60,000 per year. California's marginal income tax rate at this income is 9.3%, while Washington’s is 0%. The effective rate at this income is 4.47%, which will result in $2,680 in state taxes.

California and Washington have similar costs of living, depending on where you live. For instance, Los Angeles and Seattle have very similar costs of living, while San Francisco’s cost of living is 24% higher than Seattle’s. On the other hand, California's sales tax rate is 7.5%–10%, while Washington’s sales tax ranges from 7%–9.9%, depending on where you live.

Consider how much you’d be saving after you factor in your moving costs. According to the American Moving & Storage Association, the average move costs $3,868–$5,415 for the average two or three bedroom home from California to Washington. However, this depends on your personal move and how much you are able to save. In fact, Worldwide ERC estimates the average moving cost from one state to another to be closer to $12,935.

No Income Tax Usually Means Higher Sales Taxes

By forgoing a state income tax, the state needs to make up for their budget in other ways. For instance, the sales tax on your clothing, food, gasoline, and other purchases may be higher in the new state. There are also other fees to consider, such as property taxes, tuition costs, and cost of living expenses, which should be factored into your state-by-state comparisons.

For example, Tennessee has the highest average state and local sales tax rate in the country, which the Tax Foundation estimates at around 9.45%. Nevada also has above-average sales taxes. Texas and Florida also have above-average sales tax and effective property tax rates. Meanwhile, Washington has the highest gasoline prices due to a high gasoline tax of around $0.37 per gallon.

And Higher Property Taxes

It’s also important to consider the property tax rate in the state-by-state comparison, which is 1% of assessed property value in California and 1.025% in Washington, as well as the vehicle tax rate, which is 7.5% in California and 6.8% in Washington.

Property tax can make a big difference, depending on where you live and how much your home is worth — and how long you've owned it. For instance, Warren Buffett pays property taxes of $14,410 (at a 2.9% tax rate) on his $500,000 home in Nebraska and only $2,264 (at a 0.056% tax rate) on his $4M home in California. (California's Proposition 13 essentially "locked in" Buffett's property tax rate at 1970s levels.)

And a Bunch of Other Fees and Taxes

Along with potentially higher sales taxes and property taxes, each state can also employ its own unique fees and taxes. New Hampshire has some of the highest effective property taxes in the country, as well as the highest average in-state tuition. By contrast, Wyoming and Alaska derive high tax revenues from coal mining and oil drilling operations. In fact, nearly 70% of Alaska's income comes from nontax revenue. Nevada receives taxes and fees on gambling, which totals nearly $1B each year, as well as a modified business tax rate of 1.17%.

While South Dakota has a below average sales tax rate, the state charges a range of other fees and taxes to make up for it, including a cigarette excise tax, bank franchise and alcoholic beverage taxes, high motor fuel tax, and licensing fees on coin-operated laundries. Texas charges more than 60 separate taxes, fees, and assessmentsto make up for the lack of income taxes.

Before You Go, Compare All Expenses

According to the Center for Regional Economic Competitiveness, Alaska, Florida, New Hampshire, South Dakota, and Washington all have above average cost of living. Each state is unique in its taxation systems, so it’s important to research your new state’s tax code and alternative revenue streams before factoring in what you would save in state income taxes. Make sure to also use a cost of living comparison tool for a better idea of how much you will save overall (if anything at all) by making the big move.

How to Reduce Your Income Tax Without Moving

Before you decide to move to a state with no income taxes, consider the alternatives. You can contribute more to your 401K, donate more, and take advantage of tax deductions. There are various ways to save money on your taxes each year, so speak with your tax pro to ensure you are taking advantage of every possible deduction.

This article is from Andrea Cannon of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Questions Couples Must Ask Before Retirement

Dan Rafter — Thu, 10 Nov 2016 09:00:09 +0000

What kind of retirement do you imagine? Do you picture taking a long cruise, traveling to international destinations, and racking up the frequent-flier miles? What if your partner is dreaming about a retirement of lazy days spent reading books, watching movies, and visiting the grandkids?

Those retirements are two very different kinds. And if you and your partner can't agree on a version of your after-work years that satisfies both of you, your retirement might be a stormy one.

Fortunately, you can boost the odds that you and your partner will enjoy your retirement years by asking five key questions before you leave the working world.

1. What Kind of Retirement Do You Want?

This is the most basic of questions, but it might be the most important. Couples need to hammer out exactly what kind of life they want to lead after their working years are over.

When you're working, much of your life is planned out for you. You know when you have to be on the job, for instance. If you're raising kids, your weeks are often filled with band practices, soccer games, and gymnastics meets. You and your partner might not even spend much time together during an average week.

But when you retire? That all changes. Those hours in the office are now hours spent at home. You and your partner need to determine what you want to fill those hours with. You might want to travel and take on new hobbies. Your partner might prefer quiet days with favorite books.

The type of retirement you want also impacts how much money you'll need to save. You'll need more money if you plan to travel the globe and less if you picture quiet nights in your existing home.

If you discuss this before retirement, you might be able to work out compromises. Maybe you agree to take two trips a year. Maybe you agree that you'll investigate a new hobby while your partner plows through War and Peace. But you won't be able to agree on anything if you don't first talk about what your ideal retirements look like.

2. Where Do You Want to Live?

Do you want to stay in your current home? Or perhaps you'd like to sell your home and move into an apartment in the middle of downtown? These are both good choices. But you and your partner need to discuss them before you retire. You don't want to be dreaming of a downtown apartment if your partner is making plans for a new sunroom in your current home.

And what about your grandkids? Do you want to move closer to them? Or do you want to stay put? This, again, is another conversation that you must have before retirement.

3. When Do You Want to Retire?

You might plan on working late into your 70s. Your partner might be counting down the days to 67. Make sure you and your partner discuss when you both plan on retiring.

Your partner might expect that you'll both retire at the same time. Don't make it a surprise that you want to retire earlier or later. The timing of your retirement plays an important role in how much you have to save each year to meet your retirement goals. So talk about this choice early and often.

And if you change your mind? Don't keep it a secret from your partner.

4. How Much Money Do You Need?

This might be the most perplexing question of all to couples. It's also the one that couples need to talk about early in their relationship. Couples need to agree on how much money they'll need each year to live a comfortable retirement. If they don't? The odds are high that money issues will be a constant source of tension.

How much money couples need in retirement varies depending on the lifestyles that they want. Couples who want to travel during their retirement will need more money. Those who want to spend their time visiting their grandkids will need less.

Those couples who plan on living in a pricey seniors' center or an urban apartment building will probably need more money than those who plan to live for as long as possible in a home that they have already paid off.

There are plenty of formulas for determining how much money couples should save during retirement. Your best bet, though, might be to meet with a financial adviser who can help you and your partner work through your retirement goals and determine the best way to save for them.

5. Who Will Do What Chores?

You might have been happy with being the home's main cook if your partner worked longer hours. But what about when you are both retired? Will you still want to handle the bulk of the cooking chores then? Maybe not.

It pays to talk with your partner about who will handle the bills, cook the meals, clean the house, and mow the lawn once retirement arrives. The old ways of splitting these chores might no longer make sense after you both settle into retirement.

Again, not talking about this issue could cause tension. You might not be thrilled to serve your partner dinner if that partner spent all day watching TV or reading a book. So don't be shy about the chores conversation. It might be time to work out a new household schedule.

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This article is from Dan Rafter of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Here's How Much Life in the Big City Will Cost You

Andrea Cannon — Tue, 01 Nov 2016 10:00:15 +0000

So, you got a new higher-paying job in the big city. Now you have to decide whether it's worth making the big move. Fortunately, there's an easy cost analysis that can help you determine if the move is worthwhile.

Cost of Living Calculators

For a better estimate of how much you'll need to earn to maintain the same standard of living, use a cost of living calculator. Once you enter your current income, where you currently live, and where you would like to move, you can see a side-by-side comparison of what it will cost to live in both cities.

Some basic calculators will show how far your salary will go in another city by comparing the price differences of major categories, like housing, utilities, and groceries. There are also more advanced cost of living calculators that will break down everything from what gas costs in the two areas, to how much you pay for coffee and ibuprofen.

For example, say you're living somewhere like Bakersfield, California with an income of $50,000, and you're deciding whether to move to a big metro like San Francisco. So, how much will you need to earn in order to maintain your same standard of living? Using a cost of living calculator, you can see that you would need to be making $81,636. Otherwise, you'll have to get used to a lower standard of living and cut costs wherever possible.

Housing

Generally speaking, the closer you live to downtown, the more expensive the rent, food, and entertainment costs. When you live in a bigger city, it also generally means that you will have a smaller living space. Worst of all, rent just keeps getting more expensive over time. According to StreetEasy's annual New York City Rent Affordability Report, the median rent-to-income ratio in NYC rose from 59.7% in 2015 to 65.2% in 2016. This means that nearly two-thirds of New Yorkers' income is devoted to rent. (See also: The Simple Way to Decide How Much Rent You Can Really Afford)

Higher Income

In most cases, a higher cost of living also means that the area has a higher than average median household income. While you can usually get a more robust starting salary in a large city, you might not want to count on hefty raises. Income growth is lagging behind things like rent increases and cost of living growth, so your expenses may increase in the years to come, but your income might not keep up.

Transportation

In most cases, the closer you can live to work, the better. This will allow you to bike to work, take part in a carpool, use Uber, or even take public transportation.

If you will be taking advantage of public transportation, consider storing or selling your car, so you don't have to worry about parking. Driving can also be a lot more overwhelming for someone moving from a smaller town to a big metro (think Los Angeles gridlock). Look into public transportation options in your new city to determine if you can reasonably live there without a car, and how much you would save by making the change to public transportation. Keep in mind that places that are more walkable, or have better transportation options, are typically more expensive to rent.

Parking

In cities like Los Angeles, New York, San Francisco, and Seattle (to name a few), free parking is basically a pipe dream. With parking meters and paid parking lots as far as the eye can see, it's very unlikely that you'll find free parking. Even if you did find street parking, the posted rules can be very confusing and, in large cities, parking tickets are very common.

Convenience

Living in a large city means most things will be at your fingertips. For instance, there isn't much that you won't have access to in New York City. However, getting what you want and need is a different story. Living in a small town means quicker trips to the grocery store and general merchandise stores like Target.

In a big city, on the other hand, you have to worry about fighting traffic and finding parking before you even get to the store. Then, there are hordes of people to deal with and long lines at the checkout counter, so small day trips can become much longer and more stressful. Try completing your errands at odd times, like early in the morning or during your lunch break, to beat the crowds.

Entertainment

Living in a big city means there are generally boundless things to occupy your time, such as endless places to eat, shows to watch, people to meet, and free activities to take part in. In a city like San Francisco or New York, you will be exposed to more culture more easily, and can find more fun, free events for the kids.

To better deal with the culture shock, try seeking out social groups and other resources for newcomers to the area. Make a valiant effort after moving to make friends with locals and other transplants so you can quickly become acclimated with the city and what is available to you.

Is It Worth It?

Moving to a large city can be very expensive. The move itself can be a frustrating, expensive undertaking, and once you're there, things like rent, groceries, utilities, health care, and transportation can be much more expensive than what you're used to. Take this into account when you're deciding whether to make the move or not.

The decision on whether it is worth it to make the big move is an entirely personal one. After living in New York City, San Francisco, and Los Angeles, I can attest to the fact that there is nothing comparable to living in a big metro. What you can (and will) experience in a shorter amount of time there is well worth the higher cost of living. However, if you are trying to save more money or contribute more towards your debt, savings, or retirement accounts, you'll need to use a cost of living calculator (at minimum) to determine whether it's worth it for you.

This article is from Andrea Cannon of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

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