The 'Couv'

The 'Couv'

Tuesday, October 25, 2022

Inflation Eating Away Retirement Income

With inflation now swinging for the proverbial fences, retirees are watching their budget tighten every month. This past year we have seen inflation pressure the likes of which have not occurred in more than 40 years! Now more than ever, the heavy burden of taxation becomes a bigger thorn in the side of retirement plans. Retirees that live in states with no income tax keep a larger share of their fixed income each month. Even seniors on fixed incomes low enough to avoid state and local income tax, may have to find a job to supplement their income. Suddenly the ugly head of taxation appears. 

Washington State does not levy an income tax and that means retirees keep more of their money. Inflation may still nip at the heels of your bank account but more money will be deposited every month than living in a state with income tax. The diabolical truth about income tax is that is taxes money that people save. At least a sales tax only taxes money your spend on mostly discretionary items. Food in Washington is not taxed for example.  Western Washington State has what could easily be the most mild four season climate in the US. Sure a little snow falls in the winter, but the temps rarely dip below 20º. The summer temps rarely get above 95º and on those rare occasions the humidity is typically very low.

I like a four season climate but I would prefer to avoid those sub-zero affairs where going outside might kill you. I absolutely can't stand temps above 90º and most of Western Washington only sees about a dozen days above 90º each year. For those of you that are a little more climate hearty than I, Eastern Washington is sunnier all year long, It's a bit warmer in the summer and much colder in the winter, a true four season wonderland.

It's time to ditch the income tax and move to a state like Washington where you keep more of your money each month.