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Abed G. Rabbani PhD, CFP® Quoted in WalletHub

Abed RabbaniWhat is the most common mistake that retirees make when choosing where to settle?

Many retirees are relocating without due diligence. Many people relocate on a whim. Many people made a move to a place that they thought was a dream destination only to find it otherwise. The pace of life may be too fast or slow. The area may lack a sense of community. Before your retirement date, plan to spend some time in your chosen destination to get a feel.

What are some tips for living on a fixed income in retirement?

Living on a fixed income in retirement can be challenging. Retirees can adapt to living on a fixed income by tracking expenses, creating a budget to manage living expenses, and paying off debt.

What are the top factors retirees should consider in choosing which state to retire in? 

The top factors retirees should consider in choosing which state to retire in are taxes, insurance, housing cost, everyday expenses, quality and cost of healthcare, and quality of life.

In evaluating the best states to retire, what are the top five indicators?

The top five indicators should be crime rate, cost of living, 60 & overpopulation, average property prices, and healthcare.

The financial impact of the pandemic has many Americans reevaluating their retirement plans. What are some new points of concern for future retirees in considering where to retire?

COVID-19 pandemic has impacted many Americans’ retirement plans by having to retire later than planned, now not being able to retire at all, or being forced into retirement. In this circumstance, seeking help from a financial advisor can be beneficial. With regulatory changes, whether one has a financial advisor is going to make a big difference. Another concern is the healthcare system is overwhelmed; many non-emergency procedures are being postponed. This may reduce the quality of life for many retirees.

Should states work to attract retirees? What are the pros and cons of having a large retiree population?

Many states view retirees as a fiscal windfall. Attracting retirees can be a key economic development strategy. Several states have developed fiscal strategies for attracting recent retirees. For example, over 20 states have significantly reduced death- and gift-tax burdens since 1985. Instead of using fiscal policy to recruit retirees, I think states should focus on marketing their amenities.

The main advantage of having a large retiree population is the growth of the service industry. The retirees require a wide range of services. They are also model citizens. They volunteer in large numbers and help out in their churches, local charities, and community improvement efforts.

The main disadvantage of a large retiree population is higher health-care costs. Older people are more prone to illnesses and ailments; as such, an increasing number of sick persons will put pressure on health-care facilities, which might not be able to cope with the demand. The likelihood of having diabetes, hypertension, and cancer increase with age.

Should retirees be exempt from certain state and local taxes? 

Retirees could be exempt from state and local taxes. Sales taxes tend to penalize lower-income individuals more than higher-income individuals because the former group necessarily must spend more of their income than the latter. Most retirees will fall in the former group.

How might changes to the tax code influence retirement security?

With the decline of traditional pensions, most of us are now responsible for saving for our retirement. Changes in the tax code will affect your ability to save money for retirement and influence how you use the funds over time. For example, the recent tax code change by SECURE Act has changed the start date for RMDs to age 72, eliminate age restriction to contribute to IRA, expands the use of 401(k) plans, and many more.

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