Given the new Tax Cuts and Jobs Bill Act of 2017, even people thought to be “super rich” have to carefully consider where it makes the most sense to live.
Ideally, everyone’s financial picture includes having enough resources to be able to spend their time and money as they choose wherever their home state. However, the new tax bill complicates the “wherever” part of the equation particularly for the super wealthy as it never has before.
GoBankingRates.com suggests that everyone calculates what it actually costs to live in his or her current home state. Pay particular attention to how much taxes are being paid out. In addition to paying attention to how much is being paid out in terms of taxes, pay attention to comparative income levels, crime rates, school quality, availability of “essential” amenities, weather, access to health care facilities, etc.
Many financial planning experts suggest that people who are considering moving to save money also take a very good look at their family, friendship and community connections. Are their children/grandchildren living in their current home state? Are their lifelong friends living in their current home state? A tax driven move from one’s current home state may mean losing meaningful and regular connections and get-togethers with important loved ones.
Financial planning experts also suggest that tax driven movers take a “test run” in another state. Consider ”trying on” a new home state by renting a home instead of buying one in that new state. Simultaneously, consider renting out rather than selling the current home. This renting instead of the selling/buying scenario enables tax driven movers to experiment with different locations without losing their foot in the door of their old home and their old home state. Essentially, this renting scenario de-escalates the “What if I don’t like it?” possibility as well as the “Now I can’t afford to buy my old house back or any house in my old home state” possibility.
All this being said, here are the current “Best and Worst States for the Super Rich,” according to the above mentioned metrics of GoBankingRates.com:
- South Dakota
- West Virginia
- New Mexico