We may not exactly be post-COVID yet, but our world is certainly settling into a new rhythm that looks a lot more normal than the past couple of years. With that being said, many Americans have made huge changes in this short time.
Many companies went virtual in 2020, giving their employees the opportunity to move outside the chaos of the cities to suburbs, more rural areas, and even outside the state. Added to that, many Americans said it was time to throw in the towel… retire, sell their business, ranch or otherwise.
Drastic times calls for drastic measures? I like to think we all had a wake-up call to get our priorities in better order, which brings us to today. Change is happening and keeping up with it is a must. Here are five:
#5…The world is certainly more convenient than 2019. Why go into a grocery store when you can shop with a glass of wine on your porch? Need something, but don’t want to drive? Amazon can send it same-day in certain instances. That new series everyone is talking about? Just subscribe to it...done. It’s more convenient, but certainly not cheaper. Forget inflation for a minute. You are paying for convenience in many cases. Do a little price comparing Wal-Mart and Amazon for example. You might be amazed to see what you are overpaying for that same-day delivery. How many subscriptions are you locked into? How many are you really using? It might be worth your while to reconfigure your cost of living: what is a need and what is a want? Convenience has become a luxury.
#4…In February we published 3 New Risks to Your Retirement. One of these addresses “The Great Relocation.” There could be a significant effect of all this migration on your retirement. It depends on where you live now, where you will live when you retire, what the population is doing, and how changing politics can have severe impacts on your retirement plan. You may live in a low-cost town in a low-cost state that is experiencing rapid population growth. Which might translate to a not so low-cost retirement. You can’t afford not to consider the impact this could have and plan for it.
#3…Your company goes virtual and you decide to move to the mountains. Many states have started to shake their finger, saying that you can’t work for an employer in our state and not pay state income taxes. At the same time, the residence state wants their fair share too. The result for you would not be pretty. Take California and Montana—combined at the highest state tax rates, this could mean a whopping 16.38% for just state income tax!
#2…Nothing changed except the cool, crisp mountain air…and your health insurance, right? Too many remote employees are learning the hard way that their company health benefits aren’t covered the way they expected in the new state. If you haven’t already taken a good hard look at this, put it at the top of your list!
#1…You buy an investment property in Utah, but live in Arizona. It might be good to check that net return again. You could be paying two state income tax liabilities every year …and in the year you sell it!
Bottom line: do your due diligence. Research - or reach out – to make sure there’s not a hidden pitfall waiting to ding your dollars.