State taxes, double your money,
and more
Retirees looking for a place to live with low taxes have to consider each state’s income, estate, excise, property, and sales taxes, says the MetLife Mature Market Institute.
Its survey of taxes and license fees turned up the cheapest state, Alaska, with a total tax burden of 6.6 percent of income. The next four cheapest are New Hampshire, Tennessee, Delaware, and Alabama.
The five costliest states in the survey were Vermont—the most expensive at 14.1 percent— Maine, New York, Rhode Island, and Ohio.
Double your money
Nervous investors thinking of stashing their money in the bank or a money market mutual fund might want to think twice due to the long-term effect on their portfolio growth.
With fixed rates on short-term accounts at about 2 percent currently, it would take 36 years to double the value of an investment.
However, at the stock market’s long-term return of 9 percent, it would take 8 years.
Steep healthcare costs
Retirees need more money than they may think for healthcare costs, says Fidelity Investments.
It estimates that the average retiree will need $225,000 in savings for various healthcare needs, plus another $85,000, on average, for long-term care costs.
The company recommends purchasing long-term care insurance while in your fifties, when costs are cheaper and it is easier to qualify.