How the hell are we supposed to retire?

dvaidya said:
The best place to do that is South Dakota, especially if you plan to travel domestic or internationally for 184 days out of the year (RV lifestyle). You do not have to live in the state to be considered a resident.

From research so far you have to spend 1 night in hotel/rv park/camping/airbnb (anything that shows you spent a night and paid for it I believe) etc so you can get a drivers license, car registration, voter registration. You also have to sign up for mail forwarding service with street address like DakotaPost. DakotaPost also helps you with drivers license and car registration including RV. You can renew your drivers license once online or mail but will have to spend another night in SD for the 2nd renewal. Licenses are valid for 5 yrs.

You can still have a residential place in NJ but it’s not considered your primary as long as you do not spend 183 days in NJ during the year.
Wyoming is another state that does not expect you to stay in the state to be considered resident of the state.
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I know someone that is full time RVing. Originally from Mass., in Utah currently, then onto CO for the winter. "Resident" of TX. Just have to spend 24hrs in TX. Hits it on the way out West and I believe again on their way back East.
 
Ian F said:
Well... it depends on how much money you are trying to convert above what you plan to withdraw for basic living.

Here are the tax brackets for 2025 and 2026.

The rough idea is to only have taxable income within an applicable bracket. The general plan for doing Roth conversions is to withdraw money at the lowest tax rate possible and put it into an account that can grow untaxed.
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After 65 and like @rick81721, u should also consider the impact of IRMMAIMG_20170522_110056.jpg, a surcharge on ur government health insurance, based upon ur taxable income two years prior.

No wonder God made CPA's.
 
Oh yeah... Medical is a whole 'nother subject that I've only just begun to dig into... but at the same time, the only thing I have confidence in is that whatever applies now will be different by the time I'm planning/hoping to retire in 5 years. With that in mind, I've tried not think/worry too much about things I have little control over.

Granted... the way work is going right now, there's a non-zero chance I could be retiring a lot earlier than I had planned.
 
Ian F said:
Oh yeah... Medical is a whole 'nother subject that I've only just begun to dig into... but at the same time, the only thing I have confidence in is that whatever applies now will be different by the time I'm planning/hoping to retire in 5 years. With that in mind, I've tried not think/worry too much about things I have little control over.

Granted... the way work is going right now, there's a non-zero chance I could be retiring a lot earlier than I had planned.
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Might change. Irma has a couple of levels.
It is a $1 more problem.
Making $1 more than the limit could cost $5000 the next year.
 
dvaidya said:
Unfortunately, all of it was converted from 401k to IRA when I moved jobs in NJ. It’s seems that NJ taxes 401K contribution but no idea how I am going to differentiate what went in and what are gains since I wasn’t thinking about detail records 🤦🏽‍♂️
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401k contributions are considered pretax for NJ purposes, so no extra steps are needed. Even when you rolled it over to the IRA, the balance continues to be pretax. There are less frequent situations where the contributions could have been after tax, like if you made them over 40 years ago or elected to make post tax contributions, but those situations don’t come up too often. On the other hand, NJ does not allow a deduction for IRA or SEP-IRA contributions even if it was deductible for Federal purposes.
 
Patrick said:
It is a $1 more problem.
Making $1 more than the limit could cost $5000 the next year.
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Same under ACA though it's more like that one dollar too much could cost an additional $20k unless the subsidies are eventually extended. While those in control hate the subsidies we know they have absolutely no plan for an alternative solution.
 
Ian F said:
If I were to do the digital nomad thing and part of that was registering in a particular state for tax reasons, I'd keep a log of my travels. While I'd guess the chances of getting audited are unlikely, having records in case you do would probably save you from a lot of aggravation.
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yep, records would have been bumming around internationally with passport stamps.
 
Days in, days out is more of a tie-breaker than a finite rule.
The rule is domicile: you are resident to where you ultimately return. You can do lots of travelling, spend lots of time outside of NJ (or any state) but state income tax auditors focus on domicile. How do you prove domicile?

  1. What state issued your drivers license?
  2. How about a gun license?
  3. Where is your mail delivered?
  4. In which state are your doctors and medical providers?
  5. What address is on your passport?
  6. What address is on your IRS tax forms?

You can live 183 days outside of NJ and still get taxed as a full year resident.
 
Fire Lord Jim said:
Days in, days out is more of a tie-breaker than a finite rule.
The rule is domicile: you are resident to where you ultimately return. You can do lots of travelling, spend lots of time outside of NJ (or any state) but state income tax auditors focus on domicile. How do you prove domicile?

  1. What state issued your drivers license?
  2. How about a gun license?
  3. Where is your mail delivered?
  4. In which state are your doctors and medical providers?
  5. What address is on your passport?
  6. What address is on your IRS tax forms?

You can live 183 days outside of NJ and still get taxed as a full year resident.
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And you do hear about them going after people for the above, but it always sounds like it's people running Hedge Funds and such.

Does a normal person need to worry about the above if their income is a normal salary? For instance I left NJ for NC. I went from filing NJ taxes for a few decades to suddenly no taxes in NJ. I'm assuming I'm under any AGI limit where they'd look into where I disappeared to to see if I'm trying to evade taxes. But if I was filing a million dollar tax return every year to nothing they may investigate if I actually left NJ and if they can claw back taxes.
 
Santapez said:
And you do hear about them going after people for the above, but it always sounds like it's people running Hedge Funds and such.

Does a normal person need to worry about the above if their income is a normal salary? For instance I left NJ for NC. I went from filing NJ taxes for a few decades to suddenly no taxes in NJ. I'm assuming I'm under any AGI limit where they'd look into where I disappeared to to see if I'm trying to evade taxes. But if I was filing a million dollar tax return every year to nothing they may investigate if I actually left NJ and if they can claw back taxes.
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If you moved from NJ to NC, you likely established domicile in NC.
It's the so called nomads that stay out of the state but have not established a domicile in a new state that continue to be taxed as residents.
 
Ok so, we need to rethink the "shit and sleep in South Dakota one day per year" plan?

This is all so confusing.
 
Bike N Gear said:
For anybody using the public marketplace for health insurance if they don't extend the ACA subsidies the cost difference is huge.
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I’m afraid to log in and look. We’ve been on an Aetna plan since 1/1 which we like, but Aetna is not offering plans via the marketplace for 2026 and beyond. So I need to choose a new provider and plan, meaning it won’t be an apples to apples comparison, but I’m sure I’ll experience some pretty big sticker shock.
 
I wonder what the time I spent in NH was classified... especially back in 2016 when I even had an apartment for most of the year. Then from 2018 off and on through 2023 when I was there more than I was in PA.

Granted, I was always had my legal address and license in PA.
 
Santapez said:
And you do hear about them going after people for the above, but it always sounds like it's people running Hedge Funds and such.

Does a normal person need to worry about the above if their income is a normal salary? For instance I left NJ for NC. I went from filing NJ taxes for a few decades to suddenly no taxes in NJ. I'm assuming I'm under any AGI limit where they'd look into where I disappeared to to see if I'm trying to evade taxes. But if I was filing a million dollar tax return every year to nothing they may investigate if I actually left NJ and if they can claw back taxes.
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This could be 1000% false, but coincidentally (they're listening) this just popped up on FB. This is the number of closed IRS audits for 2024.

Image.jpeg
 
Fire Lord Jim said:
If you moved from NJ to NC, you likely established domicile in NC.
It's the so called nomads that stay out of the state but have not established a domicile in a new state that continue to be taxed as residents.
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Yep, I was thinking of doing that by establishing domicile in SD by changing my drivers license, car registration, voter registration, opening a local bank account, changing addresses for other legal documents.
 
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