If you’re dreaming about scenic mountain landscapes, picturesque Fall weather, and New England charm, then it might be time to consider the great state of New Hampshire as your retirement destination. Whether you’re already well-established in the New England area or looking to move cross country, there are a few important financial considerations to make before solidifying your plans for retirement.
By preparing proactively for a leisurely (or adventurous!) retirement lifestyle in New Hampshire, you can better ensure a secure and comfortable future in the Granite State. Here are four key financial considerations we recommend reviewing first.
Consideration #1: Tax Implications
New Hampshire boasts a unique tax landscape, particularly appealing to retirees. Not only is there no sales tax in New Hampshire, but the state also boasts no income tax on wages or salaries. For those in retirement, this can be a big advantage, as it means tax-free withdrawals (at least at the state level) from retirement accounts, including 401(k)s, 403(b)s, and IRAs. This also includes Social Security income and income from pension plans.
It is worth noting that for 2024, the state does impose a 3% tax on income earned through interest and dividends. By 2025, however, this particular tax will be eliminated (unless further legislative action is taken). For those who’ve purchased property (or are thinking about it) in New Hampshire, the state does exempt homeowners 65 and over from property taxes if they’ve lived in New Hampshire for at least three years.
And finally, New Hampshire does not have an estate or inheritance tax (though remember, your estate may still be subject to federal estate taxes if it exceeds the exemption limit). Overall, New Hampshire is considered to be a tax-friendly state for retirees, which can make a big impact when budgeting out your future retirement income needs.
Consideration #2: Cost of Living
If you’re moving to New Hampshire from another state, it’s important to research how the cost of living compares with what you’re used to. Depending on how different the expectations are, you may need to reassess your saving strategy or find opportunities to fill the gap before retirement.
New Hampshire’s scenic beauty, rich history, and high quality of life does come with a price tag. New England is home to some expensive states, and New Hampshire’s average cost of living is around $56,727—though everyone’s personal budget and expenses will differ.
To determine how much you’re likely to need to enjoy your quality of life in New Hampshire, consider major recurring expenses, including:
- Housing: Will you rent or purchase a home? Or are you planning to renovate your current home so you’re able to age in place?
- Healthcare: You may want to establish an emergency medical fund, and determine what your average health-related spending will look like.
- Utilities: This includes your electric, sewer, water, trash, gas, internet, phone bill, and other standard monthly expenses.
- Transportation: If you own a car (or plan to have one in retirement), you’ll need to pay for insurance, maintenance, gas, parking, etc. If you want to use public transportation, find out what it’ll cost on a monthly basis for ride shares, train passes, etc.
Consideration #3: Healthcare Planning
The average 65-year-old couple today will need around $315,000 to cover their lifetime healthcare costs. Aside from establishing funds for medical emergencies (like a health savings account), it’s important to review your current Medicare coverage. Each year during the open enrollment period, you’ll have the opportunity to adjust your coverage for the coming year.
According to Medicare.gov, you can use the open enrollment period to:
- Join another Medicare Advantage Plan
- Add or drop your plan’s drug coverage
- Switch from Medicare to a Medicare Advantage Plan (or vice versa)
Don’t forget to review supplemental insurance policies available through third-party providers as well, as these can help bridge the potential gaps in coverage and mitigate out-of-pocket expenses.
Generally speaking, you shouldn’t have an issue finding high-quality healthcare providers in New Hampshire, which is home to renowned medical facilities and hospital networks.
Consideration #4: Estate Planning and Asset Protection
As we mentioned earlier, New Hampshire does not impose an estate or inheritance tax. However, it’s still important for those retiring here to establish and regularly maintain a comprehensive estate plan. Doing so helps ensure your assets are safeguarded and transferred smoothly to your desired beneficiaries.
Consider working closely with an estate attorney to develop and execute your essential estate planning documents including a will, trusts, beneficiary designations, life insurance policies, power of attorney, and anything else you need to secure your legacy.
Ready to Retire in the Granite State?
By addressing these key financial considerations, New Hampshire residents can embark on their retirement journey confidently and clearly, maximizing the opportunities and minimizing the challenges associated with retiring. As you continue on your journey toward a sound and secure retirement, we invite you to reach out to our team anytime. We’re here to help you make the most of your retirement in one of the country’s most beautiful states.
