The Gem State Offers Strategic Downsizing That May Be Your Best Move In Retirement

For many, retirement is something to look forward to and having a stable retirement means choosing your retirement destination wisely. The state or city you choose to settle in for your golden years should be a place that offers you the best cost of living and quality of life for your retirement fund. Idaho, known as the Gem State, is one such state that offers strategic downsizing, which may be your best move and help stretch your retirement funds even further. 

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The U.S. is now experiencing a phenomenon aptly called the ‘Silver Wave,' where record numbers of citizens are reaching official retirement age within the next four years. According to data gathered by the Retirement Income Institute at the Alliance for Lifetime Income, more than a staggering 11,200 Americans will turn 65 years old every day for the next four years. This means choosing the best place to settle in your retirement has never been a more popular topic than it is now. 

For years, the sunny state of Florida has been the top retirement destination in the U.S. thanks to its glorious warm weather year-round, blue waters, and possibly the biggest reason: there are no income taxes on incomes, including pensions and benefits. But now, the state is losing favor with the ‘Silver Wave,' as an influx of younger, wealthy and remote workers has driven house prices up, leaving retirees feeling the pinch more often.     

Instead of Florida, an unlikely state is now looking like a great option for retirees who don't mind downsizing to save money. According to a survey carried out by Retirement Living, which surveyed over 1,075 readers aged 55 and older, Idaho has been voted the fourth best state to retire in America. The survey also revealed that population changes account for retirees’ willingness to move to more favorable states, which is currently what's happening in Florida, which was voted eighth in the survey. 

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So, why the Gem state? 

Idaho, a Rocky Mountain State, has evolved from its mining roots into a state with a booming economy and a cost of living that is 17% lower than the national average. Idaho is also one of the fastest-growing states, with a population increase of 5.4%, which can be attributed to the low cost of housing. While this spike in population has pushed house prices up, they still remain lower than the national average. The median home price is $331,600, while the national average is $412,000. Downsizing in Idaho is a strategic move that can help you save additional money combined with what you'd save from the lower cost of living. 

On average, utilities in the Gem state cost 15% less than the national average, and groceries cost 7% less, helping stretch retirement funds further. 

Idaho has a large retiree community with Senior Living, reporting that approximately 600,000 residents in the state are 50 years or older. The state is also pretty tax-friendly for retirees as there is no tax on Social Security benefits. Private and public pension incomes are partially taxed, and withdrawals from retirement accounts are fully taxed. While this may seem disappointing compared to Florida's zero tax, the Idaho government does offer exemptions for the first $4,489 in income for individuals and $8,978 for married couples with joint filing. However, with a low-income tax rate of 5.80% combined with the low cost of living, retirees can live a very comfortable lifestyle in Idaho.    

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