How to Retire Well in New Jersey

how to retire well in new jersey

At the end of a long career, most people want to retire comfortably. Where you decide to settle down plays a big role in your financial situation, as different regions often come with different price tags. For some, the idea of heading to New Jersey is enticing. After all, the Garden State has a lot to offer, so it may be a better option for some retirees. However, New Jersey isn’t by no means one of the cheaper options. If you want to know what it takes to retire well in New Jersey, here’s everything you need to know.

Cost of Living

Choosing where to retire is serious business. Additionally, figuring out if any particular state is right for you can be incredibly complex.

Luckily, by looking at a state’s cost of living scores, you can get a better idea about how affordable an area is and whether it may suit your budget. With cost of living scores, the national average always comes in at 100. Scores above 100 mean a state is more expensive, while scores under 100 can be a mark of greater affordability.

When it comes to an overall cost of living score, New Jersey comes in at 118.2. That means that the state is more expensive than average when all expense categories are examined collectively.

If you take a look at individual category cost of living scores, the only one where the Garden State comes in below 100 is utilities. For utilities, New Jersey is slightly below average, securing a score of 98.3.

Additionally, one other category score is incredibly close to average. For healthcare, New Jersey scores a 100.2, making it only barely higher than the national average. Retirees may view this as a boon, as many people require more in the way of medical care as they get older.

However, the other remaining scores all sit significantly beyond 100. For groceries, the Garden State has a score of 108.2, while transportation comes in at 107.2.

New Jersey’s highest cost of living score is actually housing. In that category, the Garden State comes in at 149.3, meaning housing costs significantly more in New Jersey than the national average. That point is supported by the average home values in the state. While the national average home value is $263,351, New Jersey comes in at $367,103. That’s a $103,752 difference.

Tax Considerations

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Before you finalize where you are going to go to retire, it’s smart to take a close look at state taxes. How much you have to spend to cover your taxes can dramatically impact your budget, ultimately affecting your quality of life.

In New Jersey, there is a state income tax. The Garden State uses a bracketed system, charging different rates depending on your income level.

However, New Jersey doesn’t tax Social Security or military pensions. Additionally, there are multiple retirement income exclusions that can either significantly lower or completely eliminate your state income tax burden if you qualify.

For example, retirees who are at least 62 years old and have a total income amount of $100,000 or less are potentially eligible for a pension exclusion. That can cover pensions and annuities, as well as withdrawals from 401(k)s and IRAs. However, anything outside of the exclusions is potentially taxable.

New Jersey also has a state sales tax. The state-level sales tax is 6.625 percent. Additionally, the state does not allow local sales taxes, so the entire state uses that one rate.

When it comes to property taxes, the rates in the Garden State are fairly high. However, seniors may qualify for property tax relief programs, reducing their burden. For example, there is a senior citizens deduction worth $250 that’s available to qualifying retirees. There are also senior freeze and homestead programs that may help.

Part-Time Job Opportunities

For many seniors, retiring doesn’t mean completely leaving the workforce. Instead, they may choose to transition into a part-time job, allowing them to bring in some income and help their savings last longer.

Historically, part-time jobs are reasonably accessible in New Jersey. However, the state has been hard-hit by COVID-19, altering the current landscape.

Pre-COVID, in February 2020, the unemployment rate in the Garden State was 3.8 percent. That was a bit above the national average for the same month, which was 3.5 percent. However, as the pandemic led to widespread unemployment, New Jersey’s rate hit 16.3 percent (April 2020), a number that was well above the national average of 14.8 percent.

While New Jersey began recovering, getting as low as 6.7 percent in September 2020, it soon went back up. As of November 2020, the unemployment rate was in the double digits once more, hitting 10.2 percent. In comparison, the national average in November 2020 was 6.7 percent.

Due to the higher unemployment numbers, part-time jobs in New Jersey may be scarce, or there could be significant competition for the positions. As a result, retirees who are getting ready to head to the Garden State should be prepared for a potentially lengthy job search, as well as equipped to handle all of their financial needs with savings, at least for a while.

Best Cities for Retirees in New Jersey

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Deciding where to retire involves more than selecting a state; you also have to choose a city. Each town can have something different to offer, including varying lifestyles, access to amenities, and more. If you want to make your golden years as enjoyable as possible, heading to the right city is undoubtedly a must.

If you aren’t sure what New Jersey cities to put on the table, you may want to start with Vineland. There are numerous wineries in the area, and the town offers up a laidback culture that can suit anyone looking for a quieter retirement. Additionally, it’s near Philadelphia, so you can head to the big city whenever your heart desires.

For retirees who want easy beach access, Manchester Township is an excellent option. It’s more affordable than many other coastal towns and has a very relaxed feel. Plus, there are fun entertainment options and quick access to critical amenities, ensuring all of your bases are covered.

If you prefer a bit of hustle and bustle, Trenton might be the right choice for you. It has something for nearly everyone, particularly seniors who want to stay active during retirement. There’s essentially always something to do if you make Trenton your home.

Camden is another excellent option. It’s considered a suburb of Philadelphia, Pennsylvania, so you’ll be close to big city amenities without having to live in one. Plus, Camden has a great arts scene, plenty of museums, and plenty of parks nestled along the banks of the Delaware River.

For retirees who want to live every day to the fullest, why not consider Atlantic City? It’s brimming with entertainment options, has quick beach access and a boardwalk, and is home to many local casinos. Plus, there are even wineries nearby, giving you even more to explore.

How Much Money You Need to Retire Well in New Jersey

Since New Jersey has a higher cost of living, it does take more money to retire comfortably there. Exactly how much it takes can vary depending on the city you choose, the type of lifestyle you hope to have, and personal needs and preferences. If you have a tendency toward minimalism and frugality, you may require less. If you want to afford more luxuries, then more might be a necessity.

Generally speaking, however, if you can access around $77,589 a year in retirement income, you should be in decent shape. Typically, that will allow you to handle your needs as well as some wants, which could be enough for many seniors to retire well in New Jersey.

Do you have any additional tips that might help soon-to-be retirees retire well in New Jersey? Share your thoughts in the comments below.

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