Are These Taxes Too Much To Handle For Ernst & Young Professionals?

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'For Ernst & Young employees planning for Retirement, low-income tax states may be appealing, but hidden costs like high property and vehicle taxes can really mess with long-term financial goals - working with an expert like (Advisor Name) at The Retirement Group can help with that,' said '''

Ernst & Young retirees should not pick states solely on income tax benefits; Property taxes and other hidden costs can quickly wipe those savings away and working with (Advisor Name) at The Retirement Group can help you make sound decisions about your Retirement future. ''

In this article we will discuss:

• 1. The impact of property taxes on Ernst & Young employees and state finances.

2. See how real estate and vehicle property taxes are calculated across the U.S.

3. Assessing state tax climates for retirement planning.

Property taxes today affect the financial picture for Ernst & Young employees and the fiscal health of state and local governments. And the nuances and implications of those taxes warrant close scrutiny by anyone planning for retirement or managing post-employment financial plans.

U.S. Census Bureau figures show the average American household pays about USD 2,690 a year in property taxes. And residents of the 26 states that levied vehicle property taxes pay an average of USD 444 more per year. According to the National Tax Lien Association, more than USD 14 billion in property taxes remain unpaid every year - somewhat alarming given these figures.

Not so, says the popular belief: property taxes affect more than just homeowners. Around 35 percent of American households rent. Even if they do not pay these taxes directly, they are indirectly impacted because property taxes affect rental costs and local governments' financial health.

So we examined real estate and vehicle property taxes in all 50 states and the District of Columbia. Together with advice from experienced property-tax experts, this gives a snapshot of each state's property tax picture and tax obligation management advice.

Recent research from the Financial Retirement Institute (FRI) found a trend that many would not expect: Some retired people and near-retirees in low-income tax states face unexpected costs that outweigh expected tax savings. For instance, they might pay less state income tax but higher local property, sales, and other taxes. These are expensive if you have investments or real estate. When choosing where to retire one must consider all tax implications, not just state income tax rates.

Real Estate Tax Insights

Real estate tax rates often dictate whether someone should relocate after retirement or invest in property. According to our findings:

Those with the lowest effective real estate taxes are in Hawaii (0.29%), Alabama (0.41%) and Colorado (0.5%). Those with the highest rates are New Jersey (2.47%), Illinois (2.23%) and Connecticut (2.15%). Contextual information: the median property value in the United States in 2021 is USD 244,900. A homeowner in Hawaii would pay USD 700 a year and a resident in New Jersey USD 6,057.

Figure 1: A trajectory of real estate tax changes from historical data shows shifting rankings from 2010 to 2021. And there are also differences between traditionally Democratic states and their Republican counterparts.

Vehicle Property Tax Overview

And automobiles might also be taxable, depending on where you live. Our study revealed:

Several jurisdictions impose no effective vehicle tax - for example, Hawaii, the District of Columbia and Delaware. This means their residents pay no tax on a USD 26,000 automobile.
In contrast, Mississippi charges the highest rate of 3.50 percent, or USD 917 for a USD 26,000 vehicle.

In Conclusion

With changing state fiscal environments come new challenges for Ernst & Young experts: understanding real estate and vehicle-related property taxes. Such taxes directly affect retirees and those approaching retirement age - particularly Ernst & Young domain retirees. Decisions based on knowledge secure a better financial future.

For more in-depth rankings analysis or advice from experts, our detailed tables and panels are great resources.

A state selected for retirement based solely on its low income tax rate is analogous to buying a vehicle based only on its low retail price. If those initial savings look inviting, you might be surprised at how much maintenance, fuel efficiency, and other hidden costs add up. Similarly, low income taxes may tempt you to a state but state property, sales, and other taxes may be higher. Before you pick your Ernst & Young retirement haven, evaluate a state's overall tax climate like you would the total cost of ownership of a vehicle.

Additional Fact:

Recent data from the American Institute of Certified Public Accountants (AICPA) show that increasingly many Ernst & Young professionals want outside help with property taxes. This trend underscores growing recognition among retirees and near-retirees that professional help is necessary with property tax issues involving relocation or property investments across state lines. Changing laws on property tax can make having a tax professional on your side a benefit for optimal financial planning and minimizing tax liabilities in retirement.

Additional Analogy:

Navigating the world of property taxes in retirement is like choosing a car for a cross-country trip. A car bought purely for its initial price may be a smart move, but regular travelers know the real cost is in the ongoing costs for things like fuel efficiency and maintenance. In a similar vein, picking a state for retirement solely on its low income tax rate might sound appealing, but other costs like property taxes and sales taxes can add up fast. Much like a knowledgeable road trip planner, Ernst & Young retirees need to research a state's tax climate before they drive into retirement.

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Sources:

1. Merrill Lynch. 'Taxes & Relocating in Retirement - What to Consider Before a Move.'  Merrill Lynch , Aug. 2019,  www.ml.com/articles/taxes-and-relocating-in-retirement-what-to-think-about-now.html . Accessed 2 Mar. 2025.

2. The Mortgage Reports. 'Property Tax Exemption for Senior | How to Qualify in 2025.'  The Mortgage Reports , Feb. 2025,  themortgagereports.com/63473/how-to-claim-senior-property-tax-exemption . Accessed 2 Mar. 2025.

3. U.S. Department of Defense. 'Financial Planning for Transition: The Tax Implications of Retirement.'  U.S. Department of Defense , Feb. 2025,  finred.usalearning.gov/Money/RetirementTaxes . Accessed 2 Mar. 2025.

4. Loudoun County Government. 'Real Estate Tax Relief for Older Adults & Residents with Disabilities.'  Loudoun County, Virginia , Mar. 2025,  loudoun.gov/5002/Real-Property-Tax-Exemption-Older-Adults . Accessed 2 Mar. 2025.

5. Fairfax County Government. 'Property Tax Relief for Seniors and People with Disabilities.'  Fairfax County, Virginia , Mar. 2025,  fairfaxcounty.gov/taxes/relief/tax-relief-seniors-people-with-disabilities . Accessed 2 Mar. 2025.