Should You Retire in Vermont?

If you're thinking of relocating in retirement, you might want to consider Vermont as a possible destination -- because it has a lot of what many people love. For example, if you love the great outdoors, you'll enjoy the vivid four seasons in Vermont, replete with opportunities to hike, camp, fish, kayak, ski, and more. (Even if you just love driving through picturesque small towns and stopping for ice cream, you'll be good.) Those seeking more cultural activities can enjoy museums, galleries, festivals, and more. Note that those four seasons do come with some cold weather, snow, and ice in winter.

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Retirees are smart to consider healthcare costs, quality, and accessibility in their retirement planning. On that front, Vermont scores fairly well: MedicareGuide.com has rated it the 19th-best state in the nation for elderly healthcare.

When it comes to taxes, Vermont is not among the 41 states that do not tax Social Security benefits, because it partially taxes them. Specifically, if your adjusted gross income is below a certain threshold, your Social Security benefits will be fully or partially exempt from taxation. Meanwhile, withdrawals from 401(k) and IRA accounts are fully taxable and pension income is partially taxable. There is an estate tax in Vermont, too, but it kicks in at a fairly high level -- applying to estates worth more than $5 million. (Federal estate taxes still apply, of course.)

Vermont's cost of living is above the national average, per the World Population Review, averaging 15% higher than it. Groceries cost close to the average amount, but housing and transportation costs are meaningfully higher. The typical home price in Vermont was recently $404,238 -- about 11% above the national average. Car insurance is on the low side, recently averaging $2,379 annually, about $638 below average.

So go ahead and consider Vermont, if you're interested. Whatever places you're considering, it's smart to spend at least a few months there, if not a whole year, to make sure that it feels like a good fit.

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