Choosing a place to retire can be tricky. Often, aspiring retirees who are open to relocating focus on traditional destinations. While this can certainly work, it also means you may overlook the potential of a state like Missouri. The Show-Me state actually has a ton to offer. Plus, it’s substantially more affordable than many other states you may be considering. If you are wondering what it takes to retire well in Missouri, here’s everything you need to know about spending your golden years in this state.
Cost of Living
One of the biggest factors to consider when you’re choosing a place to retire is the state’s cost of living scores. With those, you can see how expensive a state is in comparison to others, as well as the national average.
For cost of living scores, the national average is forever set right at 100. When a score exceeds that mark, it means it is more expensive than average. When a score is below 100, that can be a sign of affordability.
Missouri’s overall cost of living score is just 88.9, showcasing that it costs less to settle in Missouri than many other states. Grocery and healthcare both come in with scores of 97.6, putting them slightly below average. Utilities are similar with a score of 97.5, and transportation comes in even lower with a 93.9.
However, where the Show-Me State really stands out is housing. That score is a startling 71.6, making it one of the lowest in the nation.
While the average home value in the United States is $262,604, the average in Missouri is just $173,541. That’s a difference of $89,063, showing just how affordable homes can be in the Show-Me State.
Tax Considerations[embedded content]
Before you pick a state to retire in, you also want to look at the tax implications of choosing that location. How much you have to pay in taxes affects your budget and how far you’re savings will go, so it’s important to take taxation into consideration.
Missouri does have a state income tax. Like the federal system, the Show-Me State uses tax brackets. Depending on your income level, you could pay anywhere between 0 to 5.4 percent on your taxable income.
Now, not all forms of retirement income are taxable income if you live in Missouri. Many qualify for deductions or exemptions. Social Security is exempt if you are at least 62 years old (or are disabled) and have less than $85,000 a year in income as an individual, or $100,000 per year if you file jointly.
There are also other exemptions and deductions available, including for public and private pensions, though not everyone is eligible. However, funds from an IRA or 401(k) don’t qualify for deductions or exemptions.
There’s also sales tax to contend with if you choose to retire in Missouri. The state sales tax rate comes in at 4.225 percent. However, cities, counties, and districts can impose additional taxes, leading to higher rates in many areas.
When it comes to property taxes, Missouri’s are fairly reasonable. Additionally, many retirees may qualify for credits or deductions that lower the cost. For example, the Missouri Property Tax Credit Claim can be worth up to $1,100 a year.
Part-Time Job Opportunities
Many retirees look for part-time jobs to bring in a little income during their golden years. In many cases, Missouri has quite a bit to offer in this department. However, COVID-19 may make positions comparatively scarce, at least for a while.
At the beginning of the COVID-19 pandemic, Missouri went from an unemployment rate of 3.9 percent in March 2020 to 10.2 percent in April 2020. Now, both of those numbers were better than the national average, which came in at 4.4 percent and 14.7 percent, respectively. However, it certainly led to some hardship.
As recovery efforts moved forward, Missouri faired well. While the national average in October 2020 was 6.9 percent, Missouri’s was 4.6 percent, less than a percentage point away from pre-pandemic levels.
While this suggests that opportunities may be returning to normal, it’s important to remember that the situation is highly fluid. As a result, it’s best not to count on part-time work as being an option, at least for the near future.
Best Cities for Retirees in Missouri[embedded content]
The city you choose has a big impact on your retirement. Not only can it affect your budget, as some areas cost more than others, but it can also do more. Some locales have better amenities or different vibes, altering your quality of life.
If you’re looking for a slower pace, Kennett could be a great choice. It’s in a mostly agricultural part of the state and has a smaller population. However, it still has everything you could need.
Kirkwood is another great option, especially if you want to be near St. Louis without living in it. It’s a very charming suburb that’s part of the inner ring, ensuring you can access all that St. Louis has to offer easily.
Springfield could also be an excellent choice. It’s near the Ozark Mountains, which could make it ideal for outdoorsy retirees.
How Much Money You Need to Retire Well in Missouri
Overall, the Show-Me State is pretty affordable, thanks to its lower cost of living. As a result, you should be able to secure a comfortable retirement without a ton of savings.
Generally, if you have access to at least $55,973 each year, you can likely retire well in Missouri. You should be able to cover your needs without much trouble, and many of your wants would fit into your budget, too.
Do you have any tips that can help someone retire well in Missouri? Share your thoughts in the comments below.
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