How to Retire Well in Mississippi

How to Retire Well in Mississippi

How to Retire Well in Mississippi

Whether retirement is on the horizon or you’ve already begun your post-workforce journey, choosing a place to settle down is a big decision. The state you select has a substantial impact on both how long your savings last and your overall quality of life. As a result, it’s a choice you don’t want to make lightly. If you think that Mississippi might be the right place for you, it’s crucial to examine several aspects of living there. If your goal is to retire well in Mississippi, here’s what you need to know about heading to the Magnolia State for your retirement.

Cost of Living

One of the first points you should look at when you are selecting a retirement destination is the cost of living in that area. By examining the cost of living metrics, you can compare one state’s affordability to both the national average and other states.

For simplicity, the cost of living score that represents the national average is 100. If a state ends up with scores above 100, it’s a sign that the state costs more than the national average. The larger the difference between the state’s score and the national average, in this case, the more expensive the state is in that category.

Scores below 100 usually mean affordability. The state costs less – either overall or in a specific category – than the national average. Again, the bigger the difference between the two scores, the more substantial the savings.

Mississippi is primarily known as a low-cost state. When it comes to the state’s overall cost of living score, it comes in at 84.8, meaning it costs far less than the national average. In fact, that score makes the Magnolia State the most affordable place in the nation overall.

When it comes to category scores, Mississippi is below 100 in each one. For groceries, the Magnolia State has a score of 93.0, and utilities come in at 92.8. Transportation and healthcare are also low, coming in at 88.5 and 88.4, respectively.

However, it’s housing where Mississippi really shines. In that category, the Magnolia State sits at 67.0, which is far below the national average and significantly lower than the state with the second-lowest score (Alabama with a 70.4).

The low housing score is further backed up by the average home value in Mississippi, which is $133,299. That’s almost half of the national average, which comes in at $266,222.

Tax Considerations

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While Mississippi is certainly more affordable than nearly any other state, it is still a good idea to examine the tax implications of moving there. How much of your savings you have to direct to income, sales, or property taxes matters, as it impacts how long your money will last and how much you can pull out each year for retirement income.

Mississippi does have a state income tax. Like the federal government, the Magnolia State uses a bracketed system. Depending on your taxable income level, the rates range from 0 to 5 percent.

However, Mississippi does have deductions and exemptions that benefit seniors, reducing their tax burdens. Taxpayers over 65 can qualify for a $1,500 exemption, for example, that goes above and beyond the standard exemption, which ranges from $6,000 to $12,000 depending on your filing status.

Additionally, Mississippi doesn’t tax Social Security, Railroad Retirement, or Veterans’ Administration payments. Plus, if you’re at least 59 ½ years old, the Magnolia State doesn’t tax most other retirement distributions either, including income from 401(k)s, IRAs, public pensions, private pensions, and annuities. That means, if you mean the age requirements and rely solely on retirement plan-related income, you may not have to pay any state income taxes.

Now, Mississippi does have a sales tax. For most purchases, the base rate required by the state is 7 percent. However, cities can add up to 1 percent to that amount, potentially leading to as high as an 8 percent sales tax rate.

If you buy a home, you will have to contend with property taxes. Generally, the property tax rates in Mississippi are quite low, particularly since home values tend to be smaller. Plus, seniors can also qualify for an exemption worth up to $7,500, something that can substantially lower their overall tax burden.

Part-Time Job Opportunities

Many retirees remain as part of the workforce after leaving their main careers, working part-time to supplement their retirement income. It can make their savings last longer or may even let them stash more cash away, ensuring their later years are covered.

Generally speaking, part-time job opportunities are typically available in Mississippi. While the state historically has unemployment rates above the national average, they usually aren’t incredibly far above that line.

Now, Mississippi was hit hard by the pandemic, pushing the unemployment rate up to 16.3 percent in April 2020. That was higher than the national average at that time, which came in at 14.8 percent.

However, the Magnolia State did bounce back. By December 2020, the rate was closer to 6.2 percent. That was actually slightly below the national average for that month (6.7 percent).

Still, the situation does remain a bit fluid. Savvy retirees should assume that a part-time job search may take a little longer than it did before the pandemic. However, opportunities are likely available, so it might not take too much more time to land a position, depending on your field.

Best Cities for Retirees in Mississippi

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Jackson could be a solid choice for seniors who want to be in a larger city. It’s the capital of the Magnolia State, so it’s brimming with amenities. Plus, the city has a lot of historical significance, and there are plenty of sites to explore. There is also a solid arts scene and excellent access to medical care.

If you prefer a small-town vibe, Brandon might be your ideal option. It offers classic charm, numerous parks, plenty of golf courses, and a great arts scene. Plus, it’s just six miles from Jackson, so you’ll still have access to city amenities, entertainment, and healthcare options.

Another option for historic charm is Aberdeen. It’s nestled along the Tombigbee River and is renowned for its Magnolia trees and gardens. Additionally, there are a variety of cultural attractions here, making it popular among seniors who enjoy the region’s history.

Hattiesburg is another option that should be on your shortlist. It has big-city amenities while maintaining a small-town feel. As the home of the University of Southern Mississippi, there are always intriguing opportunities to learn in the city. Plus, outdoor recreation is highly accessible, including through the numerous golf courses and area bike trails.

If you’re looking for something a bit unique, consider Natchez. It not only maintains its Southern charm, but it is also home to a range of events, including an opera festival and hot air balloon races. Musical and other kinds of festivals are also frequent occurrences, giving you even more entertainment options.

How Much Money You Need to Retire Well in Mississippi

With such a low cost of living, you can retire well in Mississippi for less. This can be a boon for retirees with limited retirement income or anyone who wants to enjoy the best in life without spending more than necessary.

Overall, if you have access to around $53,691 a year, you can live comfortably in the Magnolia State. Covering your needs shouldn’t be an issue, and you’ll still have money available for wants, too.

Do you have any tips that could make it easier to retire well in Mississippi? Share your thoughts in the comments below.

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