Portland versus Oregon (take income & sales tax out of the equation)

Catching Nemo · 04-01-2007, 11:51 AM

..... That was supposed to read "Portland versus Vancouver".....

:blush:

My wife's parents are retiring and are thinking about moving from Oregon to Washington to save money. The question is how much will they really be saving under the following scenario.

House purchase: $375,000 (doesn't matter if they get a little more or less
house - that is what they are going to spend).

Income Taxes: Fed retirement and therefore will not be paying income tax
in Oregon or Washington.

Shopping: Most shopping will be done locally (no runs across the border).

Is it more of a wash if you take out income and sales tax as factors?

Thumper · 04-01-2007, 12:18 PM

Quote:

Originally Posted by Catching Nemo

House purchase: $375,000 (doesn't matter if they get a little more or less house - that is what they are going to spend).

Income Taxes: Fed retirement and therefore will not be paying income tax
in Oregon or Washington.

Shopping: Most shopping will be done locally (no runs across the border).

Is it more of a wash if you take out income and sales tax as factors?

Income Taxes --- They will save the 9% Oregon income tax on their retirement income. Simple to calculate. More if you include the additional Multnomah County taxes.

Real Estate Costs --- They will get significantly more house for the money since they are not in the silly "managed" Portland and Multnomah County real estate markets.

Property Taxes --- Significantly lower in Washington.

Sales Tax --- The rule of thumb is to buy cheap stuff in Washington, and all costly stuff (capital goods) in Oregon, thereby escaping the Washington sales taxes on spendy goods.

On balance they will have 12-15% more money to spend from their retirement income.

DAB · 04-01-2007, 12:41 PM

My Question would be ,WHY would they want to move to a foreigon country in the first place

DAB

k9jeff · 04-01-2007, 04:22 PM

I know several people who have done this to save some money. I have a few years to go before I make that decision. It does look good on paper.

Gundog · 04-02-2007, 08:42 AM

I am making up to Oregon for their savings so go for it. I live in Wa but work in Or so I get to pay tax to both. Hea but on the up side I get to buy an out of state fishing license to Or. even though I have paid them thousands a year in taxes and recieved no benifit. Sorry I am getting way off topic but it looked like a good chance to vent.

I have heard though that some states will continue to charge you income tax if you made the money for the retirement in their state. I thought Or was one of them it would be worth checking. It seems I remember someone saying you had to live in Wa for the last 5 years of employment to escape this.

Mike

Catching Nemo · 04-02-2007, 08:57 AM

Thanks for the input!

Abalone · 04-02-2007, 10:51 AM

Without giving facts.

A person I worked with retired about five years ago. He researched this very thouroghly.

Oregon is one of the higher Western States. Washington is cheaper but Nevada is the Cheapest of all.

That is where my fellow worker retired to.

It's really a bad thing when a person has to move far away just to make ends meet after living in an area all their life.

Pagorits · 04-02-2007, 06:36 PM

[U]I have heard though that some states will continue to charge you income tax if you made the money for the retirement in their state. I thought Or was one of them it would be worth checking. It seems I remember someone saying you had to live in Wa for the last 5 years of employment to escape this.[/U

This was called a "source tax". And to my knowledge is not correct. The feds said no to this.

Always check with your tax adviser, I just stay at Holiday Inn Express