Financial planning is an ongoing and evolving process. However, there are a few times in life when many adults forget to consider the full effects of their decision on both their short- and long-term financial plans. Moving is one of these times. Here are a handful of things to consider when moving to a new state.
Moving to a New State
No matter your reason for moving to a new state, — returning to your home state, marriage, divorce, job offer — a move like this can drastically impact your financial plan. Two of the first things you need to consider is how the income tax varies in your new state and what impact that will make on your gross salary and monthly budget. Be sure to research the cost of living ahead of time, as well. For example, you may be quite shocked at the drastic increase when moving from a small rural town to the Washington, D.C. area. Last but not least, you must revise your will, investment plan, retirement savings plan and college savings plan to ensure they are in line with your new state’s laws.
Moving in Retirement
You have worked hard your entire life, now you might want to move somewhere warmer or simply try somewhere new. Changes in cost of living must be at the top of your list of priorities, but also keep in mind how to minimize the interruption in your medical and retirement benefits. Even if recently updated, you must update your will and estate plan to reflect your new state’s laws. If you will be “snow birding,” you need to determine which state makes the most sense as your primary residence.
While you can’t control where you are stationed, you can make informed financial decisions. There is much to consider, including whether or not you want to move your entire family. Where many military families fall short is not using the resources available to them. You have an installation Personal Financial Manager who can help you navigate many aspects of moving to a new state or country. They will help you minimize your moving costs and discuss the financial benefits of living on or off base. If your spouse will lose their job due to the move, check your state’s unemployment policies, because they may be eligible for unemployment.
There is an overwhelming amount of paperwork that needs to be completed to live outside the USA as an expat, so much so, that you may not consider all of your new financial obligations. However, to maintain your status in either country, you must comply with all expat laws. This is where an advisor becomes crucial, as living as an expat truly complicates finances.
The best way to navigate the complex financial ramifications of moving is to work with a tenured financial planner. If you will be moving to the D.C. metro area, Linden Oaks Wealth Partners is here to assist.
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