Always Read The Comments

The Wall Street Journal profiled several people/couples who relocated states seeking to optimize their retirements financially and maybe enhance their quality of life too. These were not profiles of people in financial need. The stories were people who read the Wall Street Journal so they aren't representative of society at large. That's a gift link so you can click through if you're interested.

There are obviously tax differences in many areas. On of the couples profiled moved from Peoria, Illinois to Oro Valley, AZ which is just north of Tucson. Property taxes in Oro Valley are about 1/4 what they are in Peoria. The article says that state income tax in Arizona is half that of Illinois, 2.5% versus 5%. A commenter said that Illinois doesn't tax Roth conversions and the they should have done conversions before they left Illinois.  

It's not for me to say what sort of role lower taxes should have in deciding to change states, I just so happened to land in a low tax state that I enjoy at a young age. It is important to fully assess the tax differences though and be informed before pulling the trigger. Maybe it is low on the priority list so it might just be information gathering and that's ok but take the time to learn. The article made it sound like Florida is not a low tax state despite there being no income tax. I don't know but Gemini says it is a higher tax state for lower earners for generally being regressive. I know that Oregon has generally high taxes despite no sales tax. So there can be tradeoffs, one tax is low or zero while another is relatively high.   

The comments were more interesting than the article but the article itself is worth reading. There were of course comments about red states versus blue states. Having that be a determining factor for any life decision is lost on me. I think Arizona is considered a purple state or at least it has been recently. Prescott is in a very red county and Tucson is a very blue city. If someone can't leave political influences like this out of their lifestyle choices ok, I might be out over my skis on that one but leave politics out of investing, the domestic equity market goes up under both parties. 

There were a lot of comments about poor healthcare versus good healthcare in various places. Prescott has lousy healthcare but it's pretty good in Tucson with Phoenix being better. Being healthy is a very high priority for me and we are two hours from Phoenix so is that close proximity to good healthcare? That depends on who you ask but I think people need to sort this out for their personal priorities but also a have realistic assessment of their health. 

Many comments made staying close to family as the top priority which certainly makes sense. A sentiment I think it related to staying near family, a reader mentioned renting a place in the Caribbean every year for the month of February and someone said something similar about getting a VRBO for a few weeks every winter. Presumably these people live where it is cold so they are able to take a chunk out of the winter for not much money related to buying a house and can be near family the vast majority of the time. I think that is a great idea and for me it relates to moving to another country. I have no desire to leave the US but I love the idea of "living" in another country for a few months. There's a handful of places where I'd want to do that if our life circumstance allowed. For now, fire chief and animal rescue president doesn't really allow for that.

It was amusing to read comments from people who I don't think realize what is going on in Arizona. In expressing negative comments about the summers in Phoenix and other lower desert areas, I don't think people realize that a meaningful portion of the state is at very high elevation, with pine trees, usually cool summer temperatures and meaningful snow accumulation. 

There are several states that have this sort of weather divergence of cooler, high elevations and hotter, lower elevations to create a seasonal arbitrage. Nevada has this effect between Reno and other points north down to the Las Vegas area, California obviously but cost of living is there is rough, and there are a few others that may not be as extreme as Flagstaff versus Yuma. The point of this paragraph is about potentially staying close to family depending on where you live but it probably doesn't help much for Minnesota or Wisconsin. 

Mark Baker on Twitter has a theory that resonates with me that it is important for successful aging to have variation in our lives with weather and changing seasons being a simple example. A little more complex is stress variation that comes with exercising. Too much homogeneity, too much comfort leads to being less adaptable. There's research out there that supports the theory and as I said I believe in it. 

Since we are swimming in these waters a little bit, it is not our intention to pack up from Prescott and stay in Tucson for four months, but check back on that when we're in our 90's. There were several reasons that drove buying the Tucson house, we love the city, it's like Phoenix in the 80's, maybe the 70's. If there was ever a wildfire catastrophe in Walker, we would have a place to go. Less dramatically, Walker has been evacuated twice for fires in the last nine years. I stay of course but the first evacuation my wife took the dogs to her parents house in Phoenix for the week and that sucked for her. The second time she took the took the dogs to United Animal Friends ranch property and stayed in a shed which also sucked. Some hotels allow dogs yes, but five? 

Maybe we will want or need to leave Walker at some point and if that ever happens, it will be much easier to do, we will have a place that will already be paid for. And if that never happens then we'll just have a second place to getaway to, it's a form of optionality. For now we go for about a week every month, including the winters, although I didn't really go down much during our fire season, just three nights in May. 

With articles like the one we're talking about, I usually say read the comments, always read the comments. The idea there is that I believe we can learn from the experiences and observations of people we don't know. There are smart comments we can learn from and some remarkably stupid comments too that can help us figure out what not to do. This is why I share some of our details, maybe readers can pull something or positive from what we're doing and if anyone pulls anything negative, that's ok too. 

The information, analysis and opinions expressed herein reflect our judgment and opinions as of the date of writing and are subject to change at any time without notice. They are not intended to constitute legal, tax, securities or investment advice or a recommended course of action in any given situation.