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013: Should Taxes Play a Role in Where You Decide to Retire?
Episode 1314th July 2022 • Retirement Equals Freedom • Josh Bretl
00:00:00 00:32:21

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When you imagine your Golden Pond – the retirement venue of your dreams – what does it look like? Have you really done your research and thought it through? On this episode of The Retirement = Freedom Podcast we learn from Host Josh Bretl, founder of FSR Wealth Strategies, some of the factors that are important to consider when choosing where to lay down post-retirement roots. The old stereotype of “snow birds” spending part of their year in places like Arizona or Florida is less and less common today, with more retirees opting instead for a year-round change. Why leave your home state permanently? Weather is still a popular reason, but politics, cost of living, state taxes and even safety have become equally powerful influences. It’s never too soon to start exploring the many variables that make some places more attractive than others from a financial planning point of view. Sales, income, property and estate taxes all vary, which is why it’s important to do your homework!

This episode features not only a fantastic interactive state-by-state map to get you started, but also the latest on some devastatingly delicious crepes and The Dave’s deeply moving haiku tribute to Alaska. Plus Breaking News! Josh has finally placed his order! Cometeer Coffee will be showing up at his doorstep any day, so stay tuned for an unbiased review on an upcoming episode!

Click here to learn more about or listen to previous episodes of The Retirement = Freedom Podcast. And don’t forget to join our new private Facebook group, which you can find here.

Click here to explore the services that FSR Wealth Strategies offers and schedule a discovery call with one of the team’s CPAs. When it comes to living your best life, it’s never too early to get started!

Transcripts

Josh Bretl:

And if you want to be warm all the time, great.

Josh Bretl:

If you want to be by your kids, great.

Josh Bretl:

If you just want to be away from people, great.

Josh Bretl:

And if you want to play basketball with your high

Josh Bretl:

school buddies, because you've never left the '90s and you

Josh Bretl:

can't believe high school's 25 years in the past, then

Josh Bretl:

that's what you should do.

Dave Schmidt:

When you imagine your Golden Pond, the

Dave Schmidt:

retirement venue of your dreams, what does that look like?

Dave Schmidt:

When you're considering leaving your home state,

Dave Schmidt:

or even home country, permanently, what are the

Dave Schmidt:

factors you're thinking about?

Dave Schmidt:

I mean sure, weather, cost of living, and even

Dave Schmidt:

safety have become equally powerful influences.

Dave Schmidt:

But what about state by state tax laws?

Dave Schmidt:

You know the usual suspects - sales tax, income tax,

Dave Schmidt:

property taxes, estate taxes, they all vary quite a bit.

Dave Schmidt:

In this episode, Josh introduces a fantastic

Dave Schmidt:

interactive state by state map to help you get started.

Dave Schmidt:

And stay tuned for the latest news on some devastatingly

Dave Schmidt:

delicious crepes, and my deeply moving haiku tribute to Alaska.

Dave Schmidt:

This is the Retirement Equals Freedom Podcast.

Dave Schmidt:

Your host, Josh Bretl, is the owner and founder

Dave Schmidt:

of FSR Wealth Strategies in Elmhurst, Illinois.

Dave Schmidt:

For the last 18 years or so, he's been helping

Dave Schmidt:

people just like you, thrive in their retirement.

Dave Schmidt:

And me, I'm Dave.

Dave Schmidt:

Josh's longtime friend, co-host of the podcast,

Dave Schmidt:

and financial project.

Dave Schmidt:

I'm here to make sure things don't get too

Dave Schmidt:

boring and technical.

Dave Schmidt:

I keep things lighthearted.

Dave Schmidt:

So now let me let you let me, end this introduction

Dave Schmidt:

so you can enjoy the show.

Dave Schmidt:

FSR Wealth Management is a registered investment advisor

Dave Schmidt:

located in Elmhurst, Illinois.

Dave Schmidt:

Information and opinions contained in this audio

Dave Schmidt:

have been arrived at by FSR Wealth advisors.

Dave Schmidt:

All information herein is for informational purposes

Dave Schmidt:

and should not be construed as investment advice.

Dave Schmidt:

It does not constitute an offer, a solicitation or recommendation

Dave Schmidt:

to purchase any security.

Dave Schmidt:

FSR is not providing legal, tax, accounting, or financial

Dave Schmidt:

planning advice in this audio.

Dave Schmidt:

These views are as of the date of this publication

Dave Schmidt:

and are subject to change.

Josh Bretl:

Hi, Dave!

Dave Schmidt:

Hey, Josh, man happy belated

Dave Schmidt:

Fourth of July, man.

Josh Bretl:

Yeah.

Josh Bretl:

It is the week after the fourth as we record this, we're

Josh Bretl:

recording episode 13, at some point Dave, you told me we

Josh Bretl:

have to stop saying the episode number but I can't, I'm not

Josh Bretl:

going to, and if we have to fit one in the middle, we'll call

Josh Bretl:

it 13 and a half or something.

Dave Schmidt:

Oh, I did say that, just in case we have

Dave Schmidt:

a super hot topic we have to talk about and we could just

Dave Schmidt:

kind of switch things up.

Josh Bretl:

Yeah.

Josh Bretl:

We'll just call it bonus episode.

Dave Schmidt:

Mm-hmm.

Josh Bretl:

This is not a bonus episode.

Dave Schmidt:

No, this-

Josh Bretl:

this is pre-planned.

... Dave Schmidt:

this is one of the most hardcore episodes

... Dave Schmidt:

we're ever going to record.

... Dave Schmidt:

You know, driving here this morning I was listening to

... Dave Schmidt:

episode 12, which just dropped on, well today, July 7th.

... Dave Schmidt:

And I found myself rewinding the end of music,

... Dave Schmidt:

three times because it's new and it's awesome.

Josh Bretl:

You were very into the end music.

Josh Bretl:

You texted me and listened to the end music-

Dave Schmidt:

yes.

... Josh Bretl:

and it's good.

... Josh Bretl:

Yeah.

... Josh Bretl:

You love music more than I love music.

Dave Schmidt:

I do.

Dave Schmidt:

But this new one is more like a reggae kind of vibe to it,

Dave Schmidt:

but still the happy upbeat.

Dave Schmidt:

Now listeners I'll warn you and I could go back and edit

Dave Schmidt:

it, I'm not going to though.

Dave Schmidt:

At the end, I kind of turn the volume up after we're

Dave Schmidt:

done talking and it's really loud, just be careful.

Josh Bretl:

You've also got some new sound effects,

Josh Bretl:

I've noticed in there.

Josh Bretl:

I don't know if I like the sound effects.

Dave Schmidt:

Really?

Josh Bretl:

Yeah.

Dave Schmidt:

Do you like the concept of kind of breaking up

Dave Schmidt:

all the talking with something?

Josh Bretl:

Yeah.

Dave Schmidt:

Because you talk a lot, Josh.

Josh Bretl:

I do, you're right.

Dave Schmidt:

I mean, if I don't add something we're

Dave Schmidt:

going to be, snooze fest.

Dave Schmidt:

Okay.

Dave Schmidt:

I can look for new jingles, short jingles.

Josh Bretl:

Oh, I mean, keep going, you're the

Josh Bretl:

producer of this bad boy.

Dave Schmidt:

It's almost too Western.

Dave Schmidt:

People often think of me as a modern cowboy,

Dave Schmidt:

but this may be just too modern cowboy of a jingle.

Dave Schmidt:

No, nobody thinks of me like a cowboy.

Josh Bretl:

I'm really trying to think of how I can take

Josh Bretl:

modern cowboys somewhere.

Dave Schmidt:

Yeah.

Josh Bretl:

Mm-hmm.

Dave Schmidt:

Well.

Josh Bretl:

Well.

Dave Schmidt:

Keep you on your toes.

Josh Bretl:

Dave, I have two things to tell you.

Dave Schmidt:

Okay.

Josh Bretl:

I actually have a lot to tell you, but two things

Josh Bretl:

that our podcast listeners might actually care about.

Josh Bretl:

One, I actually ordered Cometeer coffee.

Dave Schmidt:

Boom, boom, boom.

Josh Bretl:

It's not here yet.

Josh Bretl:

It's coming...

Josh Bretl:

FedEx is delivering it tomorrow, according to my

Josh Bretl:

shipment notifications.

Dave Schmidt:

Wait a minute, did you use my referral link?

Josh Bretl:

I did.

Dave Schmidt:

So you got the discount and everything?

Josh Bretl:

Mm-hmm.

Dave Schmidt:

Wow.

Josh Bretl:

So I will be able to, either agree or

Josh Bretl:

disagree with you after your tons and tons of comment

Josh Bretl:

to your Cometeer comments.

Dave Schmidt:

I'm speechless.

Dave Schmidt:

I can't...

Dave Schmidt:

Listeners, you have no idea what you're in store for.

Dave Schmidt:

Drinking Cometeer is going to elevate this podcast to levels

Dave Schmidt:

you never thought was possible.

Josh Bretl:

Okay.

Dave Schmidt:

I can't wait!

Josh Bretl:

On a totally separate, but still us

Josh Bretl:

consuming stuff notice, I thought of a new bit, for

Josh Bretl:

our show and it's important.

Josh Bretl:

It's kind of a behind the scenes look at what Dave and

Josh Bretl:

I talk about when we're not talking into microphones,

Josh Bretl:

and that is where Dave and Josh can eat lunch today.

Dave Schmidt:

Yeah.

Josh Bretl:

Because-

Dave Schmidt:

food.

... Josh Bretl:

whenever you show up at my office, my

... Josh Bretl:

wife knows, "Oh man, they're going to eat something."

Dave Schmidt:

yep.

Dave Schmidt:

It's true.

Josh Bretl:

So I had a big pasta dinner last night.

Dave Schmidt:

Okay.

Josh Bretl:

And I do not want pasta.

Dave Schmidt:

Okay.

Dave Schmidt:

Fair enough.

Josh Bretl:

But, I do want something.

Dave Schmidt:

You do want something, it's so specific.

Josh Bretl:

I was thinking possibly, Nu Crepes.

Dave Schmidt:

Ooh, yo.

Dave Schmidt:

What's the crepe of the month?

Josh Bretl:

They haven't announced the

Josh Bretl:

crepe of the month yet.

Dave Schmidt:

Okay.

Josh Bretl:

But we haven't had Nu Crepes in a long

Josh Bretl:

time, and Niall's, I think he probably misses us.

Dave Schmidt:

Well, yeah.

Dave Schmidt:

We're OG customer to Niall.

Dave Schmidt:

I mean, Niall has...

Dave Schmidt:

You see movies where the prisoners are scratching off

Dave Schmidt:

the number of days in their cell of, when they're...

Dave Schmidt:

How long they've been in jail, that's what Niall does.

Dave Schmidt:

"How many days have I not seen Josh and Dave?"

Dave Schmidt:

And I think he struggles, not seeing us, so Josh?

Josh Bretl:

Yeah.

Josh Bretl:

Nu Crepes today.

Dave Schmidt:

Nu Crepes today.

Josh Bretl:

So Nu Crepes, for those of you that really want

Josh Bretl:

to get into this, is in downtown Elmhurst, and it is a crepe

Josh Bretl:

restaurant, that is phenomenal.

Josh Bretl:

They have breakfast crepes, that have eggs and meats and

Josh Bretl:

all sorts of fun stuff in it.

Josh Bretl:

They have great lunch crepes and they have crepe of the

Josh Bretl:

month, every month they have a new specialty crepe.

Josh Bretl:

And we have a favorite crepe of the month, it comes out

Josh Bretl:

in November, every November, they do what they call

Josh Bretl:

Jive Turkey, it's like a Thanksgiving dinner in a crepe.

Dave Schmidt:

Oh man.

Josh Bretl:

Oh, we eat...

Josh Bretl:

I think two years ago was our record of six

Josh Bretl:

Jive Turkeys in a month.

Dave Schmidt:

We had six Jive Turkeys, I think

Dave Schmidt:

2020 we had five, which was great considering

Dave Schmidt:

things were shut down.

Dave Schmidt:

We are loyal supporters of the Jive Turkey.

Josh Bretl:

Mm-hmm.

Dave Schmidt:

What was our good friend Matt's order?

Dave Schmidt:

He always ordered the most simplistic.

Josh Bretl:

Oh, he got the Cinnamon Sugar.

Dave Schmidt:

Cinnamon Sugar, that's right.

Josh Bretl:

Yeah.

Josh Bretl:

Yeah.

Josh Bretl:

My dad always gets The King, the peanut butter

Josh Bretl:

banana, named after Elvis.

Dave Schmidt:

Elvis, of course.

Dave Schmidt:

All right, cool.

Josh Bretl:

But that's our lunch today.

Dave Schmidt:

It's our lunch.

Josh Bretl:

And everyone cares, I'm sure you all care about it.

Dave Schmidt:

Niall will see you soon.

Dave Schmidt:

Wait, who's picking it up?

Dave Schmidt:

Me?

Dave Schmidt:

Michael.

Josh Bretl:

Oh yeah.

Dave Schmidt:

Yeah Michael.

Josh Bretl:

Yeah Michael, go.

Dave Schmidt:

:

Michael, pick it up.

Josh Bretl:

Michael, pick it up.

Josh Bretl:

We'll let Michael do it.

Josh Bretl:

There's no jingle as we're recording this live, but

Josh Bretl:

let's see what Dave comes up with in postproduction.

Josh Bretl:

But today is an episode that we're actually rerecording

Josh Bretl:

because we recorded it earlier and we hated it, we got to

Josh Bretl:

the end and we looked at each other, we went, "Well that

Josh Bretl:

was unnatural and forced."

Dave Schmidt:

yeah, and we talked about it earlier.

Dave Schmidt:

It was a third episode we tried recording that day, and

Dave Schmidt:

I think we were just exhausted, this takes a lot out of us.

Josh Bretl:

Mm-hmm.

Josh Bretl:

It is.

Dave Schmidt:

It's not easy talking to a microphone too,

Dave Schmidt:

with you're good friends while drinking coffee, it's hard.

Dave Schmidt:

We also had a special guest in the room, one of the

Dave Schmidt:

advisors here at the office, Erin and I think she left

Dave Schmidt:

thinking, "Wow, that was the worst thing I've ever heard."

Josh Bretl:

why would anybody listen to these two jamokes?

Dave Schmidt:

So we are going to right the ship here folks.

Josh Bretl:

And today's episode is something totally

Josh Bretl:

different, it's a total change of topic from we've talked

Josh Bretl:

about in the past, and this is a physical, where to retire?

Josh Bretl:

So Dave, when I sit down with someone for the first

Josh Bretl:

time, one of the questions I always try and ask is...

Josh Bretl:

And because most people live here close to us in

Josh Bretl:

the Chicagoland area, and I'll ask, "Do you plan on

Josh Bretl:

staying in your house?"

Josh Bretl:

And the reason I ask that question is, because I want

Josh Bretl:

to know if there's a house sale or a house purchase that

Josh Bretl:

I have to be concerned about, but then I always ask, do you

Josh Bretl:

plan on staying in the area?

Dave Schmidt:

Okay.

Josh Bretl:

Do you plan on leaving Chicago?

Josh Bretl:

I've been asking that question for 15 years.

Josh Bretl:

The last, really the last five years especially, I have

Josh Bretl:

been getting a lot more people saying, "I want to leave."

Dave Schmidt:

sure.

Josh Bretl:

And we've, forever...

Josh Bretl:

I grew up having grandparents who had a winter house in

Josh Bretl:

Florida, and for Chicago is not a place that people like

Josh Bretl:

to spend winters, it's quite frankly miserable here in the

Josh Bretl:

winter, for everyone but you, I know you love the cold.

Dave Schmidt:

I love it.

Josh Bretl:

But people have always done stuff like that,

Josh Bretl:

but now I feel it is happening more and more and more.

Josh Bretl:

And one of the things we talk about is there's

Josh Bretl:

actually pros and cons, from a financial standpoint

Josh Bretl:

of where you retire at.

Dave Schmidt:

Absolutely.

Dave Schmidt:

Do you ask them why they're leaving?

Josh Bretl:

Yeah, I do.

Dave Schmidt:

I'm sure it runs the gamut.

Josh Bretl:

It runs the gamut, weather was

Josh Bretl:

always the biggest one.

Josh Bretl:

They were tired of being cold, then it got into politics.

Josh Bretl:

Financially, Illinois has always been ranked 49th or

Josh Bretl:

50th in the country, from a financial standpoint.

Dave Schmidt:

Right.

Josh Bretl:

And people are tired of it.

Dave Schmidt:

Sure.

Josh Bretl:

People think their taxes are high, and

Josh Bretl:

we'll talk about taxes here in a second on that.

Josh Bretl:

But recently in the last few years we've actually had safety.

Josh Bretl:

People have...

Josh Bretl:

We're living outside Chicago, I don't feel unsafe, but

Josh Bretl:

with everything going on, people have said I don't

Josh Bretl:

want that big city, I don't want that Chicago feels, so.

Dave Schmidt:

You should survey, all your clients

Dave Schmidt:

that leave out of state like, "Why'd you leave our state?"

Dave Schmidt:

We could post in the Facebook group.

Josh Bretl:

We actually, we have to keep track of all

Josh Bretl:

the states our clients live in from an SEC's standpoint,

Josh Bretl:

and it is interesting to see where they go.

Josh Bretl:

Florida's a big state, California, actually Nevada has

Josh Bretl:

had a big uptick in people, so.

Dave Schmidt:

And don't you have somebody who wants

Dave Schmidt:

to live in Paris, right?

Dave Schmidt:

Or...

Josh Bretl:

Yeah, we have clients that want to move

Josh Bretl:

not to Paris to Italy.

Dave Schmidt:

Okay.

Josh Bretl:

And it's really kind of it's, there's pros

Josh Bretl:

and cons to everything.

Dave Schmidt:

Absolutely.

Josh Bretl:

So most people don't make a decision for tax

Josh Bretl:

purposes, but if I do think there's some financial reasons

Josh Bretl:

of why you want to live in a state and we're going to

Josh Bretl:

talk about taxes for that.

Dave Schmidt:

Oh man.

Josh Bretl:

Hashtag tax nerd.

Dave Schmidt:

[Singing].

Dave Schmidt:

Al, if you're listening to this buddy, this episode's for you.

Josh Bretl:

We just spent the Fourth of July weekend

Josh Bretl:

in Michigan with my family.

Josh Bretl:

And Alex were listening to the podcast and Hashtag tax

Josh Bretl:

nerd came out all throughout the weekend, so it was really,

Josh Bretl:

it's become a big point for us to try to make fun of

Josh Bretl:

each other with that, but.

Dave Schmidt:

Did you ever watch scrubs?

Josh Bretl:

A few episodes.

Dave Schmidt:

Okay.

Dave Schmidt:

So J.D and Turk, they're like brothers from another mother,

Dave Schmidt:

and whenever something good would happen to them, like

Dave Schmidt:

a little bell would go off in the sky, and so I think I

Dave Schmidt:

heard that bell several times over the weekend, and that

Dave Schmidt:

was whenever your boys would repeat the Hashtag tax nerd.

Josh Bretl:

Hashtag tax nerd.

Dave Schmidt:

Dave & Busters for half off Wednesdays and I

Dave Schmidt:

heard the bell go off, I'm like, "Oh, someone just said it."

Josh Bretl:

Actually, there was a point in the last podcast

Josh Bretl:

where I made fun of Alex for something, I think it was

Josh Bretl:

probably a Hashtag tax nerd thing, and he's sitting in

Josh Bretl:

the backseat of the car and we heard it and he goes, "Dad!"

Josh Bretl:

I was, I thought he would be mad at me, but he didn't,

Josh Bretl:

he would just, he was happy we talked about him.

Dave Schmidt:

One more good, this is short.

Dave Schmidt:

Yesterday we were watching, it was really cute, it was

Dave Schmidt:

my dad's last day in visiting town and Landon goes, "Let's

Dave Schmidt:

watch a Scooby-Doo for papa."

Dave Schmidt:

Because my dad loves...

Dave Schmidt:

Well everyone loves Scooby do.

Dave Schmidt:

And we were watching it and midway through, I've always

Dave Schmidt:

known this, but Landon finally realized how much

Dave Schmidt:

Josh's laugh sounds like Scooby's laugh, because

Dave Schmidt:

Scooby's like, "Woohoo hoo!"

Dave Schmidt:

And then Josh is laughing at podcast just like it.

Dave Schmidt:

So now, every time we watch Scoob Landon's like, "Mr.

Dave Schmidt:

Josh!"

Josh Bretl:

But why people move?

Josh Bretl:

What do we look at in a state?

Josh Bretl:

And there's three things from a financial standpoint, actually

Josh Bretl:

there's more than three.

Josh Bretl:

One is, one big one's, is cost of living, how much

Josh Bretl:

it costs to live somewhere.

Josh Bretl:

Outside of Chicago where we live now, we have a relatively high

Josh Bretl:

cost of living comparatively to the rest of the country.

Dave Schmidt:

Yeah.

Josh Bretl:

You could, in essence you could move,

Josh Bretl:

even in other parts of the state, you could move

Josh Bretl:

farther out from Chicago.

Josh Bretl:

You could move more rural.

Josh Bretl:

You could move to different parts of the country and have

Josh Bretl:

a lower cost of living, so you have the same income and

Josh Bretl:

it costs less to live there.

Josh Bretl:

But from a tax perspective, there's a few different

Josh Bretl:

taxes we look at.

Josh Bretl:

The first is sales taxes, how much it costs to buy something.

Josh Bretl:

The second is property taxes.

Josh Bretl:

The third is income taxes.

Josh Bretl:

Now these are all the three big things, there's a fourth

Josh Bretl:

that some people need to look at, and that's estate

Josh Bretl:

taxes and that's if you die.

Josh Bretl:

Most people aren't as worried about estate taxes, they always

Josh Bretl:

say, "That's my kid's problems."

Josh Bretl:

But that's still something you want to worry about.

Josh Bretl:

Every state has one of these three things and some are

Josh Bretl:

worse than others, and when people say they want to leave

Josh Bretl:

Illinois, they're usually saying they want to leave

Josh Bretl:

Illinois for the property taxes and the sales taxes.

Josh Bretl:

We have really high property taxes and we were the highest

Josh Bretl:

sales taxes in the country.

Josh Bretl:

The same size house in Florida or Indiana or Texas or wherever

Josh Bretl:

it might be, instead of paying 10, $12,000 a year in sales

Josh Bretl:

taxes, you might pay two, $3,000 a year in sales taxes and that's

Josh Bretl:

money in your pocket, and that's something that's very real.

Josh Bretl:

Was I say, in sales taxes there?

Dave Schmidt:

You meant property taxes.

Josh Bretl:

I meant property taxes.

Dave Schmidt:

You meant property taxes.

Dave Schmidt:

We experienced that firsthand when my whole

Dave Schmidt:

family moved to Colorado.

Dave Schmidt:

You visited Julie and Bill, their house is-

Josh Bretl:

it's gorgeous.

Dave Schmidt:

Yeah.

Dave Schmidt:

I don't know, maybe 3,500 square feet and it was

Dave Schmidt:

annual taxes were like $3,000 and I'm like, "What?"

Josh Bretl:

they have a beautiful house.

Josh Bretl:

If that house was here in Elmhurst where we

Josh Bretl:

live, they'd have-

Dave Schmidt:

24,000.

... Josh Bretl:

a 20, 24,000 annual tax bill.

Dave Schmidt:

Easy.

Josh Bretl:

So, no it's crazy.

Josh Bretl:

But sales taxes that does matter depending on how much you buy.

Josh Bretl:

There's certain people that spend a lot of money and buy

Josh Bretl:

a lot of stuff and sales taxes are going to have a big impact.

Josh Bretl:

If you don't spend a lot of money, sales taxes aren't

Josh Bretl:

going to be as big of a deal, that's not something

Josh Bretl:

people normally look at.

Josh Bretl:

But income taxes is something people look at, and one of

Josh Bretl:

the few benefits to living in Illinois as a retiree

Josh Bretl:

is we have great income tax structures for retirees.

Dave Schmidt:

Right.

Josh Bretl:

They don't pay taxes on their social security, they

Josh Bretl:

don't pay taxes on their IRA or 401[k] distributions, they

Josh Bretl:

don't pay taxes on any pension distributions, so that's a

Josh Bretl:

nice thing to live in Illinois.

Josh Bretl:

In fact, I believe the number is three, we're one of three states

Josh Bretl:

that has an income tax that doesn't tax retirement income.

Dave Schmidt:

Okay.

Josh Bretl:

So there's other states that don't have an income

Josh Bretl:

tax like Florida and Texas, but we're one of the three that

Josh Bretl:

don't tax retirement income.

Dave Schmidt:

You know the facts here, haven't most governors

Dave Schmidt:

tried to enact retirement tax?

Josh Bretl:

Yeah.

Josh Bretl:

So the state being broke, they're looking for any extra

Josh Bretl:

sources of revenue and the state is really, it's we're

Josh Bretl:

an odd state and the fact that you get a deduction on your

Josh Bretl:

state of Illinois tax bill for putting money into your

Josh Bretl:

401ks and IRAs, and you also don't pay taxes on the way out.

Josh Bretl:

So one of the tax planning moves we actually tell people

Josh Bretl:

is, "Hey, don't put money into your Roth, put it into your IRA

Josh Bretl:

and just move it to your Roth.

Josh Bretl:

You'll actually save the 5% Illinois tax."

Josh Bretl:

But pretty much every governor for the past 30 years has

Josh Bretl:

brought up, "Hey, we need to tax retirement income."

Josh Bretl:

But when you already have a state of people

Josh Bretl:

fleeing out of it-

Dave Schmidt:

right.

... Josh Bretl:

it's a very unpopular thing to

... Josh Bretl:

say to people and so.

Dave Schmidt:

Okay.

Josh Bretl:

But no, I do see it coming at some point down

Josh Bretl:

the road, but those income taxes are huge, and let's say

Josh Bretl:

you were to move to a state, people will often say, "I will

Josh Bretl:

move to Indiana or Wisconsin."

Josh Bretl:

Those are neighboring states of ours, and they do it because

Josh Bretl:

they look at the cost of living, the cost of living's less and

Josh Bretl:

the property taxes are less.

Josh Bretl:

All of a sudden they may have an additional tax on

Josh Bretl:

their income, five to 7% that they didn't have before.

Dave Schmidt:

Right.

Josh Bretl:

And so, you may save $8,000 in property taxes,

Josh Bretl:

but you just cost yourself another 5,000 in income taxes.

Dave Schmidt:

Right.

Josh Bretl:

So you have to really weigh those things

Josh Bretl:

out and each state has its pros and cons there.

Dave Schmidt:

Isn't there some website that kind of tracks

Dave Schmidt:

all the different taxes-

Josh Bretl:

Dave, I don't know when you lead me

Josh Bretl:

down a road somewhere.

Dave Schmidt:

I just led you.

Dave Schmidt:

Oh gosh, it's like leading a horse to pasture.

Dave Schmidt:

Again, this goes back to last week or last episode, I started

Dave Schmidt:

analogy and I couldn't finish it and you said like, "Don't

Dave Schmidt:

you hate when that happens?"

Josh Bretl:

I do.

Josh Bretl:

I hate when that happens.

Dave Schmidt:

See, I love it.

Dave Schmidt:

I think it just brings out the creativity in us, Joshua.

Josh Bretl:

I made a mistake earlier, and what

Josh Bretl:

I always hate is when you say like, "Here's the three

Josh Bretl:

things you need to know."

Josh Bretl:

And as you start listing them off, you can only come up

Josh Bretl:

with two, and you're like, "Oh no, what's the three things?"

Josh Bretl:

So someone told me a long time ago, never say a number,

Josh Bretl:

just say, "Here's some things that you have to know."

Josh Bretl:

And if you come up with two or four, no one knows

Josh Bretl:

the difference of how many you're planning.

Josh Bretl:

And I actually said earlier about, I use the number three

Josh Bretl:

and then there's actually four, but right, whatever.

Josh Bretl:

So, but same thing is sort of that analogy of just a little.

Dave Schmidt:

Just roll with it, man.

Josh Bretl:

Just roll, just go.

Dave Schmidt:

Just go, Rollin' with the homies.

Dave Schmidt:

[Singing].

Josh Bretl:

What movie was that?

Josh Bretl:

That was...

Josh Bretl:

Clueless?

Dave Schmidt:

Ding, ding, ding.

Josh Bretl:

Whoo!

Dave Schmidt:

Yep.

Josh Bretl:

That was back when I used to watch movies.

Dave Schmidt:

Good job.

Dave Schmidt:

But we watched Friday Night Lights after my first date

Dave Schmidt:

with Carla at my house.

Dave Schmidt:

Yeah.

Dave Schmidt:

"I don't want your life."

Dave Schmidt:

All right, come on, carry on.

Dave Schmidt:

You're making me go through songs and quotes.

Josh Bretl:

There is a website it's done by Kiplinger, we will

Josh Bretl:

link to it in the show notes here, that if you just actually

Josh Bretl:

Google, Kiplinger and where to retire map, every year they

Josh Bretl:

update this, it's really cool, it's a map of the 50 United

Josh Bretl:

States and they color code each state for tax friendliness.

Dave Schmidt:

Yeah.

Josh Bretl:

Now I don't necessarily agree

Josh Bretl:

with the color coding.

Dave Schmidt:

Mm-hmm.

Josh Bretl:

So for example, they have Illinois as red,

Josh Bretl:

which people would say red's bad, people would say,

Josh Bretl:

"Yeah, Illinois is a bad state normally financially."

Josh Bretl:

But the things we talked about, if you have a high

Josh Bretl:

retirement income, you don't spend a lot of money and you

Josh Bretl:

live in a decent sized house or you have low property taxes

Josh Bretl:

for whatever reason, it's a great state to be in for those

Josh Bretl:

matters, so I wouldn't call Illinois necessarily red, but

Josh Bretl:

you have to click on is you have to know the differences.

Josh Bretl:

So if you don't have a lot of retirement income,

Josh Bretl:

there's people that have a lot of cash or they

Josh Bretl:

have a lot of investments.

Josh Bretl:

Illinois's not a great state, that's tax in Illinois, maybe

Josh Bretl:

you're better off in Florida or Texas or one of the states

Josh Bretl:

that does not tax at all.

Josh Bretl:

If you're going to sell a big asset, for whatever reason, if

Josh Bretl:

you're going to recognize large capital gains, you'd rather

Josh Bretl:

recognize those gains in a state that doesn't tax capital gains.

Dave Schmidt:

Yeah, totally.

Josh Bretl:

So-

Dave Schmidt:

Does the Kiplinger map take into

Dave Schmidt:

account quality of pizza?

Josh Bretl:

Ooh, no, it does not, but that's a

Josh Bretl:

good thing to look at.

Dave Schmidt:

Do they take requests?

Dave Schmidt:

Like how to improve our map?

Dave Schmidt:

Maybe?

Josh Bretl:

Yeah.

Josh Bretl:

Quality of pizza, again sidebar.

Josh Bretl:

We have more sidebars in this episode we've ever had.

Dave Schmidt:

Yeah sidebars.

Josh Bretl:

So we up in Michigan, over the weekend

Josh Bretl:

and we're just, it's 90 miles from here you'd think they'd

Josh Bretl:

have good Chicago pizza.

Dave Schmidt:

Yeah.

Josh Bretl:

For years, my family's had a house up there

Josh Bretl:

since I was five years old.

Josh Bretl:

The pizza is utterly terrible, you've had the

Josh Bretl:

pizza up there with me.

Josh Bretl:

It's horrible.

Dave Schmidt:

Why is that?

Josh Bretl:

The last two years we've had good

Josh Bretl:

pizza all of a sudden.

Dave Schmidt:

Well, what's that one town that's got the cool

Dave Schmidt:

bar and then the place across the street where we throw

Dave Schmidt:

bags outside, it was like...

Josh Bretl:

Sawyer.

Dave Schmidt:

Is that Sawyer?

Josh Bretl:

It was Sawyer.

Dave Schmidt:

That's got train tracks right there

Dave Schmidt:

that goes through it.

Dave Schmidt:

Okay.

Dave Schmidt:

I feel that town was kind of up and coming if you will.

Josh Bretl:

Yes.

Dave Schmidt:

So do they have good pizza there now?

Josh Bretl:

No, but some of the surrounding towns do.

Dave Schmidt:

Oh, okay.

Josh Bretl:

Out where Journeyman is, there's a

Josh Bretl:

great, cool pizza place.

Josh Bretl:

Down in New Buffalo is a good pizza place, so there's

Josh Bretl:

actually decent pizza up there now which is...

Dave Schmidt:

Oh man.

Dave Schmidt:

Incentive to go visit again.

Dave Schmidt:

Sorry Chris Borchert.

Josh Bretl:

Other places are getting pizza now.

Dave Schmidt:

Okay.

Josh Bretl:

Maybe they can add it to the map

Josh Bretl:

and Kiplinger, but-

Dave Schmidt:

let's do it.

Josh Bretl:

What you need to know is you need to know where

Josh Bretl:

your income's coming from.

Josh Bretl:

What's important to you and then click on the state,

Josh Bretl:

so if you're looking at, "Hey, I want to move to the

Josh Bretl:

East Coast, the Carolinas."

Josh Bretl:

Well compare North Carolina and South Carolina, or

Josh Bretl:

compare Georgia down there.

Josh Bretl:

If you want to move to the Pacific Northwest, there's

Josh Bretl:

a big difference between Oregon and Washington and

Josh Bretl:

California tax wise, so.

Dave Schmidt:

Oh wow.

Josh Bretl:

Just know those things, and if talk to a

Josh Bretl:

professional, but do know what that means to you from

Josh Bretl:

that perspective, and now there are reasons to move

Josh Bretl:

but there's also, sometimes you just move no matter what.

Josh Bretl:

It's just part of the equation, and I have a client who I

Josh Bretl:

just adore and for the last 5, 6, 7 years, they've been

Josh Bretl:

telling me, "Hey, in 2023, we're moving to Italy."

Dave Schmidt:

wow.

Josh Bretl:

We're retiring, we're moving to Italy.

Dave Schmidt:

That's cool.

Josh Bretl:

And that's what their dream was.

Dave Schmidt:

Man.

Josh Bretl:

So what we did is we did a lot of research

Josh Bretl:

on the Italy tax, because they will be taxed as Italy

Josh Bretl:

residents, and their tax rate in Italy is going to be

Josh Bretl:

somewhere in the realm of 75%.

Dave Schmidt:

So how does that happen?

Josh Bretl:

That's what the Italian tax rate is, once you

Josh Bretl:

get over a certain threshold.

Josh Bretl:

And so right now, for the last few years, we have been doing

Josh Bretl:

huge tax moves to try and make, try and hide their income as

Josh Bretl:

much as possible, to try and prepare them for that move.

Josh Bretl:

So the same thing's true here.

Josh Bretl:

I mean, if you're going to move to a state, if you want

Josh Bretl:

to move to California, if you want to move to Indiana

Josh Bretl:

or Wisconsin, well maybe there's some tax moves you

Josh Bretl:

should make while you already live in a tax friendly state.

Dave Schmidt:

Man, 75%.

Dave Schmidt:

So I did promise my good friend, Jackie.

Dave Schmidt:

You know Jackie?

Josh Bretl:

Mm-hmm, yeah.

Dave Schmidt:

And her boyfriend, Matt, they went

Dave Schmidt:

on a family vacation in Italy and they got engaged.

Dave Schmidt:

So I said, I will give them a congratulations on our podcast.

Dave Schmidt:

Matt, Jackie, love you, congratulations and I

Dave Schmidt:

better be at your wedding.

Josh Bretl:

Congratulations.

Josh Bretl:

Yeah, that's fantastic.

Dave Schmidt:

I know.

Dave Schmidt:

Isn't that great news?

Josh Bretl:

We have named dropped more on this

Josh Bretl:

episode, than we ever have.

Dave Schmidt:

We have done a lot of name drops and

Dave Schmidt:

this is just the beginning.

Dave Schmidt:

I think of name dropping

Josh Bretl:

I'm a little nervous.

Dave Schmidt:

You should be nervous.

Dave Schmidt:

I do think that these fellas will reciprocate in the

Dave Schmidt:

future on their own podcasts.

Josh Bretl:

Cool!

Josh Bretl:

Well I hope so.

Dave Schmidt:

So Josh, where do you want to retire?

Dave Schmidt:

Do you want to stay in Illinois and just have

Dave Schmidt:

a house somewhere else?

Josh Bretl:

Missy and I talk about that.

Josh Bretl:

We talk about people moving out of the city of Chicago.

Josh Bretl:

We have talked about as our kids get older, actually

Josh Bretl:

moving back into the city.

Dave Schmidt:

Really?

Josh Bretl:

We love the city of Chicago, the vibe

Josh Bretl:

and the energy it brings.

Dave Schmidt:

Sure.

Josh Bretl:

I think it depends on where your kids are.

Josh Bretl:

A lot of people that I talk to, want to move where

Josh Bretl:

their kids are, and that's totally understandable.

Josh Bretl:

I think that will depend, where are kids going to be?

Josh Bretl:

What's life going to be like at that situation?

Josh Bretl:

So you know David, when I graduate high school,

Josh Bretl:

I was voted by the senior class, the most likely

Josh Bretl:

to never leave Elmhurst.

Josh Bretl:

So far, it's held true.

Josh Bretl:

Besides the few years in college and the 18 months up in

Josh Bretl:

Wheeling, I've been an Elmhurst resident my entire life.

Dave Schmidt:

Oh, Bretl for mayor.

Dave Schmidt:

What's that slogan?

Dave Schmidt:

We'll settle for Bretl.

Josh Bretl:

Nothing like a great political slogan there.

Dave Schmidt:

No, nothing like it.

Dave Schmidt:

One of the places I want to live, not like

Dave Schmidt:

you asked, do you care?

Dave Schmidt:

Do you want to know, where?

Josh Bretl:

Yeah I do.

Josh Bretl:

I care very much about you.

Dave Schmidt:

You should.

Josh Bretl:

I might choose where you live.

Dave Schmidt:

That's actually good point.

Dave Schmidt:

There are several places, one of them is Alaska.

Josh Bretl:

For the temperature?

Dave Schmidt:

Yes.

Dave Schmidt:

Temperature.

Josh Bretl:

Beautiful.

Josh Bretl:

I've only been there once in a cruise, unbelievable place.

Dave Schmidt:

It just looks, quiet.

Dave Schmidt:

Right?

Josh Bretl:

You might want to be there, where it's dark for

Josh Bretl:

24 hours a day too, don't you?

Dave Schmidt:

Well, it's funny, actually now thank you

Dave Schmidt:

for that segue, not like you knew, but I actually wrote a

Dave Schmidt:

haiku for the State of Alaska.

Dave Schmidt:

Would you like to hear it?

Josh Bretl:

Yes.

Dave Schmidt:

All right.

Dave Schmidt:

I take this, I don't share this with many people, but

Dave Schmidt:

I'll share it today with you Josh and anybody listening.

Dave Schmidt:

Okay?

Dave Schmidt:

This is my Alaska haiku.

Dave Schmidt:

Moose how I love you.

Dave Schmidt:

And your 30 days of night.

Dave Schmidt:

I will live there soon.

Dave Schmidt:

And that's my haiku!

Dave Schmidt:

And go ahead if you want to do the syllables, it's 5-7-5.

Dave Schmidt:

I'm a haiku master.

Josh Bretl:

I'm...

Dave Schmidt:

He's speechless.

Dave Schmidt:

I left you speechless.

Josh Bretl:

I'm at a loss of words.

Dave Schmidt:

Yeah.

Josh Bretl:

I have, I knew so much about you and I didn't know

Josh Bretl:

what a literary genius you were.

Josh Bretl:

We can get t-shirts.

Josh Bretl:

I think the state of Alaska, if they want that, are you willing

Josh Bretl:

to give it to them for free?

Dave Schmidt:

That haiku?

Josh Bretl:

Yeah.

Dave Schmidt:

If they buy Cometeer.

Josh Bretl:

If they buy Cometeer from you?

Dave Schmidt:

Yes.

Dave Schmidt:

That's my haiku.

Josh Bretl:

Wow, man, that was impressive.

Dave Schmidt:

Thank you.

Josh Bretl:

Alaska doesn't surprise me with you,

Josh Bretl:

that's understandable.

Dave Schmidt:

I also do like Scandinavia, Colorado,

Dave Schmidt:

maybe eventually, but I do want to leave Illinois.

Josh Bretl:

Yeah.

Josh Bretl:

You have family in different places and-

Dave Schmidt:

right.

... Josh Bretl:

it's nice to be there, so.

Dave Schmidt:

Right.

Josh Bretl:

But thinking about those things is

Josh Bretl:

unbelievably important, and as always we've said in our

Josh Bretl:

prior episodes, having a plan ahead of time is nice.

Josh Bretl:

Sometimes it's not possible, but having that plan is quite nice.

Dave Schmidt:

Speaking to which, can you hit that button there?

Dave Schmidt:

[Singing] Everyone should feel honored, they just

Dave Schmidt:

heard my Alaska haiku.

Dave Schmidt:

No one else has ever heard that haiku, it took me years

Dave Schmidt:

to perfect, but I can relate to this whole moving thing because

Dave Schmidt:

Josh, as you know I am a huge basketball fan as are you.

Josh Bretl:

I love basketball.

Dave Schmidt:

Postcollege we'd get the gang back together

Dave Schmidt:

and play park district basketball all the time.

Dave Schmidt:

Pretty much everybody from high school we'd get together, we'd

Dave Schmidt:

start playing and it was like I was reliving my glory days.

Dave Schmidt:

I was so happy, we did so for 4, 5, 6, 7 years, at least.

Dave Schmidt:

La Grange was one of the best leagues you're in, I digress.

Dave Schmidt:

But so I'm starting to think here, I'm getting older, I still

Dave Schmidt:

love this sport and I think I can still play a little bit.

Dave Schmidt:

Sure, two times down the court and I'm probably dead

Dave Schmidt:

because I'm out of shape but I want to move where Kevin

Dave Schmidt:

Collins moved or like Vince Lucca moved in New York.

Dave Schmidt:

Kevin lived in Europe, Mark Thomas was in the military,

Dave Schmidt:

he moved to Colorado.

Josh Bretl:

That's why we stopped playing.

Dave Schmidt:

That's why we stopped playing.

Josh Bretl:

Everyone moved away.

Dave Schmidt:

These selfish friends of ours like, "Oh, I

Dave Schmidt:

need to go experience life."

Dave Schmidt:

And they left us hanging.

Josh Bretl:

Mike Nee didn't move away, he just had 19 babies.

Dave Schmidt:

19 babies and is probably coaching

Dave Schmidt:

UofI basketball by now, because he's that good.

Dave Schmidt:

So is it wrong of me to be like, pack up the kids and go find

Dave Schmidt:

our basketball buddies just for the sake of playing basketball?

Josh Bretl:

No.

Dave Schmidt:

No?

Josh Bretl:

I don't think so.

Dave Schmidt:

Okay.

Josh Bretl:

I don't think so.

Dave Schmidt:

Was that a weak Dave relates to retirees?

Josh Bretl:

No, and actually I think I got this one.

Dave Schmidt:

You got this one?

Josh Bretl:

Yeah.

Dave Schmidt:

All right.

Dave Schmidt:

So I'm not going to have you jingle me out this time.

Dave Schmidt:

I'm going to jingle myself out and I'll let

Dave Schmidt:

you connect to dots.

Dave Schmidt:

Okay?

Dave Schmidt:

You ready?

Josh Bretl:

Yeah.

Dave Schmidt:

[Singing].

Dave Schmidt:

I got to mix it up sometimes for you.

Dave Schmidt:

That was live by the way, folks.

Josh Bretl:

He haikus, and sings directly into the microphone.

Dave Schmidt:

I do.

Josh Bretl:

You have no fears.

Dave Schmidt:

No fears.

Josh Bretl:

All right.

Josh Bretl:

Let me try and tie this one together here.

Dave Schmidt:

Okay.

Dave Schmidt:

Yeah.

Josh Bretl:

And there are all sorts of reasons that people

Josh Bretl:

want to move in retirement.

Josh Bretl:

We call this Retirement = Freedom Podcast, and the reason

Josh Bretl:

we do it because retirement, you should have this freedom

Josh Bretl:

to do what you want to do when you want to do it.

Josh Bretl:

And if you want to be warm all the time, great.

Josh Bretl:

If you want to be by your kids, great.

Josh Bretl:

If you just want to be away from people, great.

Josh Bretl:

And if you want to play basketball with your high

Josh Bretl:

school buddies, because you've never left the '90s

Josh Bretl:

and you can't believe high school's 25 years in the past.

Dave Schmidt:

Yes.

Josh Bretl:

David.

Dave Schmidt:

Yes.

Dave Schmidt:

25.

Dave Schmidt:

Wow.

Josh Bretl:

Then that's what you should do.

Dave Schmidt:

Okay.

Josh Bretl:

But planning those things out is really important.

Josh Bretl:

So if you want to move to Colorado to be with Mark

Josh Bretl:

Thomas, we should know what the Colorado tax laws are.

Josh Bretl:

If you're going to move wherever, you should

Josh Bretl:

know what those laws are and plan accordingly,

Josh Bretl:

because you got time.

Josh Bretl:

You're still a young chicken, the young buck.

Dave Schmidt:

Thanks.

Josh Bretl:

So planning now will make those both

Josh Bretl:

obtainable, and affordable so that you have that freedom

Josh Bretl:

that you're not struggling with what to do or wishing

Josh Bretl:

from a financial standpoint.

Josh Bretl:

Man, living near Mark was really expensive, and the

Josh Bretl:

last thing you want is to regret your choices of moving

Josh Bretl:

from a financial standpoint.

Dave Schmidt:

Yeah.

Dave Schmidt:

So the Dave relates to retiree's jingle is pretty fun.

Dave Schmidt:

All right.

Dave Schmidt:

I agree, I can work on my storytelling a little bit guys

Dave Schmidt:

I'll work on that, but our podcast episodes kind of feel

Dave Schmidt:

like an episode of Full House.

Josh Bretl:

Explain.

Dave Schmidt:

I just feel the first two thirds are kind of

Dave Schmidt:

goofy and silly, but whenever it comes time for you to connect

Dave Schmidt:

the dots and you go on your little monologue, it is so

Dave Schmidt:

serious and sometimes sappy and I have to fight back tears

Dave Schmidt:

when I hear you speak because it's so elegant and amazing.

Dave Schmidt:

And I just feel like we're in an episode of Full House.

Dave Schmidt:

RIP Bob Saget, but-

Josh Bretl:

I was just going to say, am I Bob Saget?

Dave Schmidt:

Whoa.

Dave Schmidt:

Gosh.

Dave Schmidt:

Yes.

Dave Schmidt:

But I mean, no, uncle Jesse.

Dave Schmidt:

No I'm uncle Jesse.

Dave Schmidt:

No, I'm Joey, anyways my point is these monologues at the

Dave Schmidt:

end, I'll start playing the music it'll just be so good.

Dave Schmidt:

I'm going to play Full House, sappy music for your monologue.

Dave Schmidt:

Making a note of this.

Josh Bretl:

Dave is the music up right now?

Josh Bretl:

Do you think?

Dave Schmidt:

Oh, I think it's going, yeah.

Dave Schmidt:

Mm-hmm.

Josh Bretl:

And do you think people actually

Josh Bretl:

learned something today?

Josh Bretl:

It's more of a mindset episode.

Dave Schmidt:

Yeah.

Dave Schmidt:

It's more of a mindset episode, Josh.

Dave Schmidt:

You're right people are learning specific taxes, but

Dave Schmidt:

they're think they may start asking themselves additional

Dave Schmidt:

questions as to why and where.

Josh Bretl:

One of the things that I always say is, teaching

Josh Bretl:

people how to think about it, is extremely valuable.

Josh Bretl:

Again, I want to remind people of our Retirement = Freedom

Josh Bretl:

Facebook group, it's new, it's getting off the ground, and I

Josh Bretl:

want this to be a place where people can talk about their

Josh Bretl:

retirement dreams and all the things that is important to

Josh Bretl:

them and really we can talk about that mindset shift and

Josh Bretl:

the way to think about things.

Josh Bretl:

But today I'd like people to find that Retirement = Freedom

Josh Bretl:

Facebook group and let us know, where do you want to retire?

Josh Bretl:

Send us a picture, why, whatever it might be, where

Josh Bretl:

do you want to retire?

Dave Schmidt:

Where do you want to retire?

Dave Schmidt:

And here's the extra bonus, because I got to

Dave Schmidt:

throw in a bonus here.

Dave Schmidt:

Right?

Dave Schmidt:

Josh is leaving for a meeting in a few minutes and I will

Dave Schmidt:

record a video of myself, reciting my Alaska haiku.

Josh Bretl:

Woohoo!

Dave Schmidt:

I'll do it!

Dave Schmidt:

And with that, we say...

Josh Bretl:

Bye!

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