What does 6% mean to you when you retire?

We are talking about state income tax. To pay or not depends on where you live. Many states have state income tax, Nevada does not.

So how much difference does it really make? Well let's take a look. If you retire with a $60,000 taxable income per year and you live in a state with a 6% state income tax rate, then the state income tax is $3600 per year, Nevada $0. What if you put your $3600 into a savings account with a 4.5% rate of return? If you retire at 65, by 85 your state income tax money, $300 per month for twenty years, compounded at 4.5% will be worth..$116,437.31.

No wonder savvy retirees are looking closely at states like Nevada, and no doubt will continue to drive demand in those real estate markets. As the huge group of boomers continues to retire, (this year about 8000 per day turn 60) creating that strong demand , it will likely play a role in supply and demand equation. For many retirees 6% is a real big deal!

Now to be totally fair, there are other taxes to take into consideration, property tax, sales tax (Nevada has no sales tax on non prepared food!), and auto. Nevada ranks near the bottom in total taxation.

For many relocating, Mesquite is the option of choice (at 37 miles down I-15) over St George, Utah because of the income tax issue.

Check out St George at these links;