Retirement in Dallas: 5 Reasons It Costs You Less Than $50,000 a Year
Living on a fixed income, especially if it's social security, can be a challenge in the face of rising living costs. The national average income for Social Security is $1,864.52, which is low,... Retirement in Texas can be significantly cheaper due to its tax-friendly policies and low living costs. The average monthly cost for expenditures is $1,895.39, while the national average annual cost of living after Social Security is $25,025.62. Texas is one of the few states nationwide that does not charge a state income tax, allowing retirement benefits, Social Security, and any other income you may have to be taxed less than $50,000 a year. The Homestead Exemption allows you to pay up to 20% less in property taxes by deducting 20% off what your property is worth. Texas also offers a tax break known as a homestead exemption if you own your property. The state also practices a “pickup tax” regarding estate planning, which removes all or a portion of the credit for state death taxes on federal estate tax returns. The city and county of Dallas offers a wide range of housing options, allowing for affordable housing and community services for seniors.
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Living on a fixed income, especially if it’s social security, can be a challenge in the face of rising living costs. The national average income for Social Security is $1,864.52, which is low, especially when considering the price of inflation and other expenses such as healthcare.
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However, Texas offers a unique solution. Its significant financial relief can make you feel more secure and less burdened. The average monthly cost for expenditures is $1,895.39. The total average annual cost of living after Social Security is $25,025.62. Here are four compelling reasons why retiring in Dallas costs less than $50,000 a year.
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One of the most significant financial benefits of retiring in Texas is its tax-friendly policies. The Lone Star State is one of the few nationwide that does not charge a state income tax. This means your retirement benefits, Social Security, and any other income you may have won’t be taxed, providing a better sense of financial security.
Texas also practices a “pickup tax” regarding your estate planning. This means it does not have a state estate or inheritance tax because it picks up all or a portion of the credit for state death taxes allowed on federal estate tax returns.
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You Can Take Advantage of the Homestead Exemption
Texas is not only free of state income taxes, it’s also free of state property taxes. Instead, property taxes are determined by local taxing units such as the city or county you reside in. A local taxing unit can also be a nearby school district. However, Texas still offers a tax break known as a homestead exemption if you own your property. The homestead exemption allows you to pay up to 20% less in property taxes by deducting 20% off what your property is worth. For example, if your home is worth $200,000, you could be on the hook for property taxes based on $140,000 instead. This can equal major savings for you when it comes to housing.
It’s even better for those aged 65 and up. Tax Code Section 11.13(c) requires an additional $10,000 to be added to your homestead exemption. n. Tax Code Section 11.13(d) allows any taxing unit to adopt a local option residence homestead exemption. Depending on the situation, you can even claim the exemption starting at age 55 if you’re a widow. Who says getting older doesn’t come with perks?
Wide Range of Housing Options To Help Supply Meet Demand
One thing Texas doesn’t have to worry about is space. Texas is the second biggest state after Alaska, meaning there is no shortage of available space to build homes on. It’s why there is a healthy balance of supply and demand regarding housing. More space in Texas equals more places to build, and housing prices tend to be fair when more homes are on the market. With a wide range of housing options, there is sure to be a spot you can comfortably afford to call home.
While the cost of living (also known as COL) in Dallas is only 0.2% higher than the national average, it’s still relatively low compared to other places. An overall lower cost of living can help make a fixed income stretch further than in other parts of the country. Along with lower home prices, there are friendly community services that seniors can use for low-cost and free entertainment.
Another reason is the low cost of living. Texas has a deregulated energy market, which means there is more competition for utility providers, featuring several to choose from. More competition means lower rates for residents than in other states where utility companies have a monopoly.
Don’t Forget To Look at Your Overall Expenses
When it comes to lowering your cost of living, remember to look for ways to cut your expenses, such as cutting back on subscriptions and memberships that are no longer being used. Paying off debt in advance can also help create additional wiggle room in your budget for unexpected expenses that pop up. You can also sign up for programs like AARP, which offers its members over a thousand discounts nationally and statewide. Signing up for loyalty programs and taking advantage of senior discounts can also help you stretch your income. The more ways you can cut your expenses, the less you’ll need to retire.
Don’t rule out Dallas, Texas, when it comes time to retire. The locals will be happy to have you.
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This article originally appeared on GOBankingRates.com: Retirement in Dallas: 5 Reasons It Costs You Less Than $50,000 a Year