CCH, a part of Wolters Kluwer and a leading global provider of tax, accounting and audit information, software and services (CCHGroup.com) takes a look at state tax rates, changes and compares differences across the nation. “Costs of living are obviously a huge consideration in deciding where to live or retire to,” said Sandy Weiner, JD, State Tax Analyst for Wolters Kluwer, CCH. “Retirees should really do their homework on the types of taxes they’d be responsible for paying and the rates they’d be taxed at when comparing different locations.”
Many retirees can live well on less than what the financial-planning industry tells them. Here's how to look beyond the formulas.
Expensive illnesses, long-term care and extreme longevity can suddenly throw retirees' estimated income needs out of whack. When the Society of Actuaries interviewed middle-class retirees in focus groups earlier this year, "they were managing very carefully, adjusting their spending where they needed to and trying not to draw down" their savings, Ms. Levering says. "But they were not planning for shock events."
One reason many people are financially unprepared for retirement is that they tap into their retirement savings before they retire. They tap it when they lose their jobs, or at the onset of poor health, or to pay for a new home. A large percentage cash out retirement savings when they change jobs instead of rolling it over.
Some franchises are promoting a strategy known as ROBS, which stands for Rollover as Business Start-Ups, where you roll over your IRA to fund the start up cost of the business. The I.R.S. has not prohibited so-called ROBS transactions, but the agency hasn't declared them legal either. Which is a good reason to be very cautious about taking a chance that might cost you penalties and taxes. But I also have another concern about the strategy — and that’s what happens when a business owner attempts to exit from a company formed this way.