Many middle and upper management as well as savvy expats shift their domicile to a low tax state just before retiring. Many sell homes in California or elsewhere and set up camp in TX or FL to receive their lump sum and exercise stock grants and options. Seems like a lot of effort to save maybe 6% or less. Are the amounts involved really that large? And don’t most pay out over several years?
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No offense, but rural and semi-rural Texas is largely a hell hole. Wall to wall rednecks with pistols and white pickups. HeeHaw in real life. I have been in every corner from Marfa to Midland, Odessa to Orange, Dallas to Denton, Houston to Harlingen I’ve never met a more pathetic collection of balloon heads anywhere. Except maybe Florida.
-Atrg That sounds awesome. Of course you are still withing 40 minutes of most of Houston, just in case that you had a burning masochistic desire to be in someone's so-called "Urban center" LOL, complete with bad neighborhoods, heavy traffic, crime, and everything else that comes with one of the biggest and progressive urban meccas of the US. Not sure why you would want to, save going to get a bite to eat or shop occasionally. That could be said of many of the "semi-rural" areas similar to yours within the states listed below as "most overall tax-friendly states for retirees".
"an urban center worth inhabiting" He He He! That's got to be the most adolescent, ill-informed and ignorant comment that I believe I've read on this site so far for a myriad of reasons too long to list. The least of which is that near or in an "urban center" is not the most desirable location for many retirees, by far.
The most overall tax-friendly states for retirees are WY,AK, SD, MS and FL but none has an urban center worth inhabiting. Next up are PA, NV,NH,KY and GA. NH has coastline as at least.
4eam, no, your crew doesn't cut my grass. if you even have a crew that you claim to commit tax fraud with to enable you to be the parasitic leech thief that you are.. I am 100% sure. Try again.
You can roll the Lump Sum into the 401k to get access to the lower expense ratio mutual funds. This is one of the few instances where you can roll cash into a 401k, other than combining with a previous 401k. To avoid the automatic 20% Federal tax withholding before 59-1/2 when withdrawing; roll the withdrawal amount to an IRA first.
Has it crossed your mind it’s possble my crew is already cutting your grass, 3jcb? I run one of the better lawn care businesses around.
"The previous poster" that you post of is a criminal, a pathetic fraud, and runs a grass cutting business - LMAO!. I am happy being independently wealthy without a care in the world. I will not hire a pathetic idiot tax cheat to cut my grass and I can afford the best in the business anyway while I sip single malt scotch. I prepared well earlier in life when others did not. Thanks!
, I’m afraid there are not many ways to minimize your taxes with your lump sum distributions other than svcking onnthe straw slowly to keep yourself in the lowest effective tax bracket. The previous poster posed an excellent solution to screwing the hand that’s screwing us back. Like any good strategy in business or in love, execution is key. Maybe svcking slowly on the taxable distributions straw and living off the income that a small cash only venture can provide isn’t that bad of an idea when you analyze it.
While it is good to know their are options for committing tax fraud, most of us would prefer not to spend our twilight years behind bars. You are better off having a great business, accepting all forms of payment, then paying your taxes then hiding behind cash, breaking the law, and doing less business.
With that behind us, who else had fo7nd a great legal way to minimize the tax on the taxable portion of the lump sum (restoration plan money)?
Retirement tax havens are anywhere you want them to be. For many years, while working at Chevron, my spouse and I established and operated a several small cash only businesses. About 90% the income from our two lawn care and landscaping crews, our painting and drywall crew, and a nail and hair salon business were all cash. Roughly 10% from credit card and some check payments was obviously declared for tax reasons. We still have the businesses into our retirement and they are doing fine. They almost run themselves. Needless to say, the tax free income is a tax haven.
I could park my trailer on the far end of your property. You benefit because any tornadoes in the area would miss your house and go for me instead because they prefer trailers.
1zqb, No, don't care much for church. I am an Atheist without a conscience nor morals like most liberals like me. Just live the good life, take as much from others that I can, vote democrat and screw everyone else!
Thar local yokel hillbillies and whatnot are found in the backwater hills of rural Georgia, not Mississippi.
I heard tell bout some real fun places to canoe in Mississippi, long as you don’t mixed up with them thar local yokel hillbillies and whatnot. Five car garage is pretty sweet deal too. I bet you got you a humdinger of a pickup plus a four door see-dan with a padded top to run the little missus to church in. golllllll leeeee.
Great for you, 1rtc. There are nice place in Mississippi. Seems like you discovered it already. Congrats.
Central to northern Alabama is a pretty good place to retire or relocate your domicile, from a tax and quality of living standpoint. Home prices are lower than Texas or Louisiana.
I'll park my double-wide anywhere I want to thank you very much.
1bdl, You can be assured that there are many places in Mississippi that will make where you are living now look like a dump, likely occupied by the very demographic that the OP is referencing. But you keep thinking what you do. I'm sure they would prefer that the likes of you remain as far away as possible - LOL!
More retirement topics on a layoff's website? Are you guys just avid dreamers or seriously not aware of the many sites, forums, threads, etc. littering the internet about these topics where you can get honest, useful information and legitimate feedback?
I'm not even smart but know better than to pay more tax than I have to. I thought I would never say this but Mississippi is looking pretty good right now. Okay I'm embarrassed I actually said that.
Oh maybe thats why some of these crazy companies like ADP are shifting only to locations in FL, TX, AZ and VA. And closing locations in more expensive states like CA, MN, NY..
Shifting one’s domicile to another State is a strategy that can be used to save on taxes and healthcare costs, especially for those considering retiring outside the US. In many cases, establishing residency in another State could take up to one year, this is something to pre-plan before executing. Some States exempt all or a larger percentage of your retirement and social security income. There are good internet sites out there that compile official information about this. At the same time, you should also examine a particular State’s and County property and sales taxes, as a hike in rates here could eliminate savings elsewhere. As for the OP’s premise on receiving the lump sum pension, it’s never wise to take the lump sum as a cash payment. You most certainly can, but it will nail you to the cross on Federal taxes and State taxes as well if you live in a State that taxes income. The best approach on taking the lump sum pension is a Direct Rollover to your Chevron ESIP 401k or to a traditional IRA. The IRA is likely the best choice if you plan to take periodic distributions to live on. Withdrawing from any 401k subjects you to an automatic 20% Federal tax withholding (IRS rule). Withdrawing from an IRA does not require any federal tax withholding percentage, unless you want to (non-obligatory). There is vast amount of information available for free at reliable internet sites. Read, learn and verify. Knowledge is power. Going back to the subject at hand, changing your domicile before retirement or before taking distributions after retirement is worth saving 6% in State taxes, but can probably save you more that that once you scope out everything. Good luck.