Massachusetts vs Delaware for Retirement (What It Really Costs You)

If you're retiring in Massachusetts, chances are that you're paying thousands more dollars than you actually need to be. And most people don't realize it until they've already made their decision. So today in this video, I'm going to break down the differences of a Massachusetts retirement and a Delaware retirement. Everything from cost, taxes, lifestyle, and housing costs, so that you can decide which one makes more sense for you. Lately, one of the states that clients are retiring from is Massachusetts. And I love to have this conversation and breaking down the differences between a Massachusetts retirement and a Delaware retirement. Because in most cases, Delaware is going to be a lot cheaper. So if you are someone that is contemplating retiring, and you live in Massachusetts, and you're thinking, maybe there's a possibility of choosing an out of state location like Delaware, then this video is for you. Because at the end of the day, everyone wants to just make sure that their retirement dollars stretch just a little bit farther. Okay, so let's start with the most obvious, which is the cost of living, which seems to be the most important thing on everyone's mind. In Massachusetts, if you live in areas like Boston, or even like the Boston suburbs, or mid tier towns, you are most likely dealing with higher housing costs, higher property taxes, and overall higher cost of living. Now let's compare that to Delaware. Yes, Delaware housing prices have gone up pretty significantly in the past five years, which means that if you are looking in coastal Delaware, you will roughly be spending anywhere from 550 to over 600,000 for a new construction home. But our property taxes are way cheaper than almost every state on the East Coast. In coastal Delaware for a new construction home, or even a resale home, you're roughly looking at anywhere from $1,200 per year to $2,000 per year. And overall, our cost of living is significantly cheaper than Massachusetts. Your everyday bills like electric, gas, even like the cost of gas for your car, and overall your groceries are going to significantly cheaper than Massachusetts. And because we're still trying to stretch your retirement budget farther, Delaware would be a great option. What's also really nice about Delaware is that generally you can expect what your monthly bills are going to be without significant increases every single month, or the worry of not knowing how much that bill is going to be. In retirement, you're looking for predictability, and Delaware has that. But this is where people actually get tripped up because overall, Delaware is the cheaper option. But that first year when you first moved to Delaware can look a little different. And I have broken all of this down in my guide, The True Cost of Retiring to Delaware. It's packed full of real numbers and every single thing that I could think of to make sure that there are absolutely no surprises when retiring to Delaware. And that is below down in the description. Okay, so let's talk about the next big thing. And one of the reasons that people love retiring to Delaware, and that is property taxes. Delaware's property taxes are very affordable. They are anywhere from $1,200 to $2,000 per year, which I know that in Massachusetts, this can be a huge difference. I have clients that are paying over $800 per month in taxes in their monthly mortgage payment, which blows my mind. Roughly in Delaware, you can expect to spend anywhere from $150 to $180 per month in taxes. In Massachusetts, you have a flat state income tax, certain retirement income is still taxed, and your property taxes can be relatively high depending on what town you live in. Now, as I've talked about extensively in all of my videos, Delaware has no state sales tax, we have low property taxes, and you can exclude up to $12,500 of your retirement income per person. So for a married couple, that's over $25,000 that you can exclude from being taxed. Also, if you have lived in the state for 10 years, you do get a senior citizen discount. And that has just doubled this year from $500 to $1,000 off of your school tax. A really good incentive to just move here sooner and get through those 10 years, and then you can get that discount. So what does this mean for you monthly? It means that it's more money in your pocket when you live in Delaware, because you're not having to spend that $800 per month in your property taxes. So let's just round up. What could you do with an extra $600 per month if you lived in Delaware? You could pay for your electric bill, and your gas bill, and your groceries, and also the gas in your car, or maybe that trip that you've been dying to take. Maybe you can go visit your grandkids more often, or maybe you can buy that expensive car that you have been dying to buy. There are so many possibilities with the extra money that you'll be saving when you retire to Delaware. All right, so let's shift into lifestyle, because ultimately that is just as important as the numbers. Massachusetts is a very busy area. You have longer winters, which means that you are going to be cold more months out of the year than Delaware. I cannot tell you how many times that I've spoken to clients in Massachusetts, and it is 30 degrees there, and almost 60 to 70 degrees here. That is a significant difference, especially as you're getting older. The cold makes you just want to hibernate and not go anywhere. And because it is a fast-paced area, there is more congestion, especially if you live near the Boston area. Now let's talk about Delaware. I've said this so many times, that Delaware is just a slower pace of life. I have so many clients that come to visit Rehoboth and Lewis, and they say, I absolutely love this. It's fresh air. It's beautiful. There's things going on, but it's not too rural. They absolutely love living here. And if you are looking for that coastal lifestyle, Rehoboth and Lewis does give you that. But maybe you're someone that does like the beach, but would rather just visit the beach. Inland towns like Milton, Harbison, Georgetown, even Bridgeville are really nice locations where you can get the best of both worlds. And ultimately, it is a very retirement-friendly environment, which means that you can age in place. All of the new construction homes have taken into consideration that Delaware is a retirement destination, which means we have one-floor living. We also have bigger hallways. In case that you ever need a wheelchair, you can age in place, and you do have that opportunity where you wouldn't need to go into assisted living. Also, many of the communities are including lawn care in your HOA, because what we have found is that although many people do 55-plus communities, some prefer not to be in a 55-plus community. So this gives you the opportunity to have an HOA that is going to take care of your lawn maintenance, so you don't even have to worry about that. And listen, some people love Massachusetts. They love the fast pace. They love the area. They've lived there their entire lives, and they don't want to move. But it is not for everyone. So if you are thinking you would like to slow down in retirement and pick an area that is still coastal, still has things going on, but it's just a slightly slower pace of life, then Delaware absolutely might be the place for you. I know I just mentioned this, but let's talk a little bit about housing. So housing in Massachusetts is older. And listen, that's not necessarily a bad thing. It just often comes with houses that are not one floor. They do not have the primary on the main floor. There's more maintenance, and there's less new construction at certain price points. In Delaware, there is a huge amount of new construction, especially tailored to retirees. Like I just mentioned, we have a lot of one-floor living, where you could have that primary on the main floor. You could have a loft. You could even have in second floor, especially if you have kids that are still living with you, or you have grandkids, or your kids want to come visit often. We even have basements available. So you could go either up or down, but you still have that main floor living with your primary on the main floor. And if you are someone that enjoys that 55 plus lifestyle, we have plenty of 55 plus communities in Delaware as well. Whether you're looking in New Castle County, or you're looking in Kent County, or even Sussex, there are so many different 55 plus communities available. And I always tell my clients this, if you are considering new construction, it is always important to have representation in the actual process. So if that means that you are going to spend a day going to new construction communities, I recommend that you reach out to your realtor, if you would like to work with me. I would love to set up those tours for you. I don't necessarily need to be with you, but I do need to register you before you go into those communities. Because once you sign in and you mark that you do not have a realtor, you then have given up your right for representation in the deal. And the salesperson does represent the builder. They do not represent you as the buyer. Just a little tidbit of information. I know I've talked about that extensively in all my other videos, but I always like to mention that to my clients. Now, listen, I do want to talk about something that really does not get talked about enough. Delaware is not all rainbows and sunshine. Okay? I do not want to give the illusion that everything here is absolutely perfect, because it is not. If you live in town, Lewis or Rehoboth, even on the outskirts of it, if you live off of Route 24, you are going to have traffic. It is, especially like in June, July, August, September is locals month, but there's not really an off season anymore. It is really just year round. You are going to have traffic. Now, does it become absolutely brutal in the summer months because we have tourists coming? Absolutely. It does. I'm not going to sit here and lie to you and say, no, it's all, everything's great. And Delaware is amazing. No, we have cons too. It's not just everything is great here. We also have a 4% transfer tax, which is the highest in the nation is typically split between the buyer and seller. So 2% and 2%. So you will hear me, especially in new construction, sound like a broken record, because I am trying to tell you that every single upgrade that you do, you also have a 2% transfer tax on top of it. And that's making sure that the builder is actually paying their half of it. Also, if you are looking at new construction or even resale, there are a lot of times timing issues, which means that if you have a house to sell, if you do not have the deposit money that is needed at contract for new construction, which is typically anywhere from 3% to 10% and you need to sell your house in order to make that payment, that opens up another can of worms, which means do you need short-term rental opportunities? Do, can you live with family members? Maybe, can you take a HELOC loan out on your primary home in order to make that deposit in order to get construction going and then sell your house closer to completion? There are so many different things that go into moving from out of state into Delaware, not including the moving cost of movers. If you are bringing your own furniture, it all adds up. So like I said, it's not all rainbows and sunshine. There are still definitely obstacles and hoops that you need to jump through in order to retire to Delaware. And lastly, let's be honest, Delaware is not for everyone. So if you are someone that enjoys going to the city every day, I would say Delaware is not that place for you. Yes, we are a small state. You can probably get to the top of Delaware, to the bottom of Delaware in about two hours. But at the same time, if you are someone that enjoys going to Baltimore every day, or maybe Boston, or you would like to be in Philadelphia every day, or even New York, you are going to have to take a trip for that. It is not a, hey, let's just go and come back multiple times. It's going to be a lot of driving. So I recommend that if you are someone that likes the city and wants to live near the city, the Massachusetts might be the place for you and Delaware may not be the place for you. But Delaware may make the most sense for you. If you were trying to stretch your retirement budget just a little bit farther, you would like a slower pace of life. You would like that one floor living to be either near the coastal Delaware beaches area, or honestly, we even have options in rural Delaware where in Kent County, where you can get the best of both worlds. You can drive the 20 minutes to get to amenities and you can live out in the country and not have to hear any kind of traffic. It's really nice. I take it from experience. I live out in the country and I absolutely love it. Now, if you are seriously starting to explore Delaware for retirement, I would absolutely love the opportunity to help you. I help retirees just like you every day make the big move to Delaware, especially my out-of-state buyers. If you would like to schedule a call with me, my information is down below in the description. Like I mentioned, there are guides down below in the description to help you get started. I really hope that this video helped. If it did, be sure to give me a thumbs up. Be sure to subscribe to the channel and I will see you on next week's video. Hey, thank you so much for making it this far into the video. If you are interested in more Delaware retirement content, check out this video right here. And if you would love to tour Delaware communities with me, check out this playlist right here. And don't forget, subscribe to my channel.