Relocating for Retirement: Is It Worth Chasing Lower Taxes?
As retirement approaches, it’s only natural to start dreaming about warmer weather, fewer responsibilities, and—ideally—a little less attention from the tax man. The idea of relocating to a “tax-friendly” state is appealing, especially if you’ve spent decades watching your income get picked apart by federal, state, and local taxes.
But before you pack up the moving truck and head south like a financially savvy snowbird, it’s worth asking: Is relocating purely for tax savings worth it?
Let’s break it down.
The Usual Suspects: States That Go Easy on Your Retirement Income
When it comes to avoiding state income taxes, a few familiar names rise to the top:
Florida, Texas, Nevada, and Tennessee all offer the big selling point of no state income tax. Even Alaska makes the list—though the weather might be a dealbreaker unless you’re into ice fishing and darkness by 3 PM.
A lesser-known option? Pennsylvania—which, while not exactly tropical, doesn’t tax retirement income like pensions, 401(k) withdrawals, or Social Security. So, if you already live in the Keystone State and hate packing, you may not need to look far.
But here’s where things get more complicated: not all tax-friendly states are created equal.
The Hidden Costs of Moving
It’s easy to focus on income taxes, but relocation comes with a full menu of financial considerations, and some of them are far from obvious:
1. Estate and Inheritance Taxes
Some states still impose taxes after you’re gone. Depending on where you move, your heirs might face state-level estate or inheritance taxes—even if the IRS doesn’t take a bite.
2. Sales Tax
States with no income tax often make up for it elsewhere. If your new home state charges 8–9% on every purchase, your “tax savings” could shrink fast—especially on big-ticket items.
3. Property Taxes
Think you’re done with housing costs because your mortgage is paid off? Think again. In many states, property taxes can rival or exceed your old income tax bill. And they tend to go up, not down.
4. Insurance Premiums
Moving to a coastal or wildfire-prone area? Expect higher premiums on home and auto insurance—sometimes dramatically higher. In some regions, coverage is not just expensive—it’s difficult to get at all.
5. Cost of Living and Healthcare Access
Warm weather doesn’t always come cheap. The overall cost of living, including groceries, transportation, and medical care, can vary widely by state and even by zip code. And access to quality healthcare? That’s a crucial factor in retirement—one that no tax break can replace.
Is It Actually Worth It?
So, back to the big question: Is moving for tax reasons worth it?
Maybe. If the numbers show a significant, sustainable savings—and the move supports your lifestyle, community, and healthcare needs—then sure, it could make sense.
But if you’re giving up proximity to family, your trusted doctor, or a strong sense of community just to shave a few percentage points off your tax bill? You may want to think twice.
At Paragon Wealth, we like to say:
Don’t let the tax tail wag the retirement dog.
Taxes are important—but they’re only one piece of the bigger picture.
Considering a Move? Let’s Run the Numbers.
Before making a major relocation decision, let’s evaluate the full financial impact—from taxes and insurance to housing, healthcare, and estate planning.
Whether you’re thinking about retiring in Pennsylvania, heading south to Florida, or exploring somewhere in between, we’ll help you approach it with clarity—and maybe even a spreadsheet or two.
Give us a call or send us an email to schedule a planning conversation. We’re here to help you retire with confidence—whether your future includes snow boots or flip-flops.
Paragon Wealth Management
Dedicated to helping you retire on your terms—sunshine optional.
About Phil Rosenau
As a graduate of Germantown Academy, Phil Rosenau earned his bachelor’s degree in economics at Drew University, while also earning a minor in business management. His passion for creating and maintaining business relationships drove him to join the Prudential Advisors team, where he met Charlie and Ricardo before starting Paragon Wealth together.
Phil is a lifelong resident of Bucks County and the son of a local entrepreneur. He understands the unique needs of small business owners, takes pride in providing his clients with the knowledge to understand their unique financial situation, and helping them navigate their financial future with confidence. He enjoys spending time with his wife, Caroline, and two children, he is the current president of the MDM networking group, and he is active with the local CrossFit community. Phil is also proud to be part of the Drew University Lacrosse Legacy where he played all four years. You can find Phil here on LinkedIn, or here on Facebook.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All investing involves risk including loss of principal. No strategy assures success or protects against loss.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Great Valley Advisor Group, a Registered Investment Advisor. Paragon Wealth Management and Great Valley Advisor Group are separate entities from LPL Financial.