Transcript
Welcome to The Investor Coaching Show, a podcast to help you get an insider’s view of the financial world and escape common investment traps. We look at the financial news of the day and help you make sense of it. So you can relax about money.
Retiring in Tennessee
Paul Winkler: All right, I’m back here, Investor Coaching Show. Now you’ve probably noticed there are a lot of people who moved into middle Tennessee in recent years. Now, I always find it interesting. It’s not only some people that are well known in political circles, but also economists and people that are financially-oriented moving to the state. And I was talking to one of the guys at the office. We were talking about retiring and Tennessee. What is it about Tennessee that makes Tennessee an attractive place to come to for retirement? And I think it’s easy there. I think there are a couple things.
Number one is, you know, we don’t have it, a state income tax. I remember Art Laffer; he and I were having breakfast one day. He was Reagan’s economic advisor, and we were talking about something that he had done, if you look at stock market charts, going back to the 1920s, Rex’s Feld was the guy that did the research on the stock market. Going back to the 1920s, so they did the research on what returns have been like large companies. They, something called stocks, bonds, bills, and inflation with their book that they put out. And it was large stocks, small company stocks, long term bonds, short term bonds, cash investments, and inflation rates and things like that.
It’s quite a body of research so, you know, I think it was St. Louis who he was living in. He was speaking as something that I was at and I used to go travel around the country where, you know, he was speaking with other academics and I saw him at one time in his retirement job. This was after he retired, he was actually getting very active in dealing with taxes and tax rates in various places around the country. And he and Art Laffer actually wrote a book together. And there were, I’ve got a copy of it in my office, but it was where they did research on different states around the country.
And I can’t remember if it was just municipal municipalities as well. I can’t remember. But one of the things that he was looking at was how these different States were affected when they increased taxes or instituted an income tax. And what they found was that in every case, it had hurt them economically when they instituted taxes, and it’s because taxes drive incentives and drive people’s behavior. You know, people don’t just sit there and take it. When you go and introduce a tax on them, they will actually do something to avoid that tax if they can or minimize its effect on them.
And this is the same thing with state income taxes, you know, you’ve got Tennessee, there’s no state income tax. I think there are only seven other states in the country that don’t have an income tax. So Tennessee, that’s a huge thing, not having a state income tax, you know, also no taxes on social security or pension benefits. Well, if you’re moving here and you’re getting ready to retire, that’s a pretty big deal. The other thing was inheritance taxes, estate taxes, you know, used to be when you did gifting here in Tennessee, if you gifted over well, now it’s $15,000 is the limit where the gift tax kicks in, actually in Tennessee, you had to pay that money upfront and it doesn’t exist anymore.
They got rid of that. And then at death, that’s another thing because if you have a taxable estate, not having to pay taxes to the state of Tennessee, for inheritance reasons, inheritance taxes, that’s a pretty big deal. And then, you know, you do have some taxes on dividends and interest, but it’s being phased out by 2022. So not much longer on that, then you look at property taxes in the state. You know, some states say, people tell me what their property taxes are. And I just go, are you kidding me? But in Tennessee, it’s lower than average. You know, there, there are places where it’s a little bit higher than that probably ought to be.
And those places, you know, what I’m talking about. But, you know, from on an average, it’s $768 in taxes per a hundred thousand dollars of assessed home value in Tennessee, not bad compared to a lot of other places around the country. So that’s been a pretty big deal, you know, for Tennessee as to why people retire here, Tennessee was ranked number six on Kiplinger’s that they actually called it one of the ten most tax friendly States for retirees. And they talk about our sales taxes tend to be a little bit higher, but the reality of it is sales taxes tend to have the least overall impact on retirees overall state tax burden.
So it’s one of the reasons that you find that Tennessee is actually a pretty popular place to retire.
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The Playbook for Relaxing About Money
As an investment advisor with over 30 years in the industry, I’ve seen my fair share of success, stories and failures when it comes to money. That’s why I wrote the short PDF that summarizes the most important takeaways for you called the playbook to relax about money in my experience, and based on numerous studies, the difference between those who struggle with money and those who do well with it often comes down to education and planning truth be told. We tend to spend more time planning for a week long vacation than we, our financial future as a whole. It’s no wonder money has become such a stress. So I have distilled the most important lessons I’ve learned in my career into one document. It’s the playbook to relax about money, and it tells you exactly what you need to do to avoid the most common investing mistakes and relax about money to get the playbook, go to Paul winkler.com forward slash relax.
Hope you enjoy today’s edition of The Investor Coaching Show. You want to learn more about what we do go to our website, paulwinkler.com. You can watch some of the videos there, and if you’re not already a client, you can set up a free initial consultation until next time. I’m Paul Winkler reminding you that I believe that more educated investors are more competent investors and confident investors are more successful investors. Have a great one.
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*Advisory services offered through Paul Winkler, Inc. (‘PWI’), an investment advisor registered with the State of Tennessee. PWI does not provide tax or legal advice: please consult your tax or legal advisor regarding your particular situation. This information is provided for informational purposes only and should not be construed to be a solicitation for the purchase of sale of any securities. Information we provide on our website, and in our publications and social media, does not constitute a solicitation or offer to sell securities or investment advisory services, or a solicitation to buy or an offer to sell a security to any person in any jurisdiction where such offer, solicitation, purchase, or sale would be unlawful under the securities laws of such jurisdiction.
