Accumulating a large balance in a traditional retirement account is a great thing in theory — until the reality of required minimum distributions (RMDs) sets in. Suddenly, the freedom that comes with having a gigantic nest egg becomes a potential tax liability that could come with hidden consequences, like Medicare IRMAAs that drive your costs up substantially.

Let's take the example of a 63-year-old couple living in New York State (in a suburb of NYC) who are sitting on $4.2 million. They want to convert a good chunk of that sum to a Roth IRA. From there, they'll enjoy tax-deferred growth on that money, tax-free withdrawals, and importantly, no RMDs.

But New York is one of the least tax-friendly states to do a Roth conversion. With state tax rates ranging from 4% to 10.9%, converting even half of a $4.2 million retirement account balance could cost this couple a substantial amount.

The 'Florida Flip' — annual conversions in a no-tax state

The potential solution? The "Florida Flip." Move to Florida for about 12 years to avoid state taxes on the conversion.

For the couple in our example, converting a 4.2 million nest egg over 12 years could yield significant savings when done strategically. Over 12 years, they would convert $350,000 annually (though they may qualify for a New York tax break, more on that below). That extra taxable income could result in an annual state tax bill in the tens of thousands in New York.

The Florida plan could shave off about $250,000 in state taxes over 12 years, depending on the couple's tax tier. So it's certainly a good idea in theory. But proper execution is everything.

You need to truly make a clean break from your home state

There's a reason Florida tends to attract retirees beyond just the weather. It's one of the few U.S. states with no income tax. That makes it a good place to do a Roth conversion. But you need to do it carefully, since New York is likely to pursue conversion taxes it thinks it's owed.

"Aggressive state tax pursuit is concentrated in high-tax states, because the flow of lost revenue each year is so massive," explains John Moran, CFP at Domain Money. "New York runs one of the most active residency auditing programs in the country, both because of the high taxes departing residents take with them and the sheer quantity of retirees leaving in pursuit of lower tax rates."

For this reason, Moran says, if you're going to pursue this strategy, you must make a truly clean break.

"The risk for this couple is New York questioning their departure, not Florida questioning their arrival," he says.

Leaving New York isn't enough

You might assume that all you need to do to initiate a "clean" Roth conversion in Florida is pack your bags. But Moran says there's a lot more to it.

"Simply moving to another state and updating their license does not automatically close the door on New York coming for their [tax money]," Moran says. "If they keep a home in New York and spend enough days in the state, New York can treat them as statutory residents and tax the conversion anyway, so both the number of days spent in the state and the use of any retained property matter."

Steven McGowan, Managing Director and Wealth Advisor at Rothschild Wealth Partners, further explains, "The standard defense is a clean factual record you are responsible for tracking — fewer than 184 days in New York [per year], updated driver's license, voter registration, bank and brokerage addresses, and a detailed day-by-day location log backed by receipts and travel records. Seriously."

Moran says the key is to show that you've really cut ties with New York. In addition to spending the majority of your time in Florida, you need to show that you're actively establishing a life there. That means finding doctors based in Florida, joining a gym, and doing other such things that send the message that this is truly your new home.

Moran also says that if New York questions your residency, "The burden of proof in a residency audit falls on the taxpayer, which makes recordkeeping vital." So make sure to document how much time you're spending in New York versus Florida, at least for the first year or two following your move.

Another important point McGowan raises is that you should establish residency in Florida before moving any money into a Roth IRA.

"Relocate first, document everything, establish Florida domicile clearly, check your models again, and then and only then convert," he says. McGowan also suggests having a tax attorney and a financial planner review everything together before a single dollar moves.

Make sure a Roth conversion actually fits into your plans

Relocating to Florida could be a good way to save money on Roth conversion taxes. But McGowan says that before you uproot your life, you should run the numbers carefully.

"A conversion this size creates a significant ordinary income spike that can affect Medicare premiums, Social Security taxation, and other income-based phaseouts. That math needs to be modeled carefully," he cautions.

McGowan says it's also important to ensure you're pursuing a Roth conversion for the right reasons.

"Are you trying to create more tax flexibility in retirement, reduce future RMDs, simplify estate planning, or pass wealth more efficiently to heirs? Because the federal tax cost is still very real, no matter where you live," he says.

Since you're dealing with a very large nest egg, converting just $200,000 to $300,000 a year could place you in a higher tax bracket.

Granted, if you let a $4.2 million nest egg grow another 12 years, your RMDs plus other retirement income could place you in a high enough bracket that it's worth converting now. But it pays to work with a tax professional or financial adviser to run the numbers.

And also, don't be surprised if your 12-year conversion leaves you paying more for Medicare. Depending on your total income, IRMAAs may be unavoidable for at least some of those years. (Note that Medicare uses a two-year lookback period to calculate IRMAAs.)

Finally, to make your Roth conversion as efficient as possible, it's best to plan to pay the taxes from a taxable brokerage account or savings/checking account. That way, you can leave the entire converted balance inside your Roth IRA to grow tax-free.

Understand the costs of moving to Florida

Giving yourself 12 years in Florida to convert some or all of a $4.2 million portfolio is a great strategy for minimizing the federal tax burden, since you'll conceivably only be moving a portion of your total balance over each year. But one final thing you'll need to do is make sure you understand the costs associated with moving to Florida.

With a median property tax bill of $6,542, New York is one of the most expensive states for homeowners. Our imaginary couple living just outside New York City would no doubt pay much higher state and local taxes. Florida, on the other hand, is one of the most expensive states for homeowners' insurance. Plus, in Florida, you could face hefty HOA fees that add to your monthly costs.

Granted, if you own a home in or near New York City and you're planning to sell it ahead of your Florida move, you may be able to pocket enough proceeds to cover the cost of a new place with money left over to pay for insurance, HOA fees, and other expenses that come with living in Florida. But do the math before making that move. You don't want to end up in a situation where what you save in taxes on your conversion, you lose to other expenses.

Another thing to think about is the 12-year Florida plan. If you're buying and selling various homes within a relatively short stretch of time, you're looking at real estate agent fees, moving costs, and other expenses. Some retirees reduce their final home purchase costs using the "half-back" approach: they move to Florida for several years, then settle halfway back to New York or New England to be closer to family while enjoying lower real estate prices.

Also note that if you're 59½ or older, you may qualify for New York State's $20,000 per-person retirement income exclusion. As a couple, you could potentially exempt $40,000 of income per year. In our scenario, the 63-year-old couple would pay state taxes on $310,000 of their annual Roth conversion rather than $350,000.

Granted, Florida's lack of an income tax may result in significantly greater net tax savings overall. But you should know what benefits you're giving up by leaving New York.

And some of those benefits may not be financial. If your family and social network are based in New York, there's an emotional cost to giving those up. So really take a look at the big picture before gearing up to pack your bags.

All told, you can potentially save money on a large conversion by moving to a no-income-tax state if you run the numbers and they work in your favor. But that's a big "if." And if you're going to make the move, make certain it's a truly clean break so your home state doesn't try to come after you for extra money

Read More

• 3 Questions to Ask Before Deciding if a Roth Conversion Is Right for You
• The Rise of the 'Half-Back' Retiree: Why a Perfect Florida Condo Isn't Enough
• How to Dodge the 'Medicare Tax' Before You Retire
• Why Do People Retire to Florida? 9 Things You Must Know

Amazon Prime Day is here. This is a four-day sales event running from Tuesday, June 23, through Friday, June 26.

While many of these sales don't have deep discounts, I use them as a chance to score discounts on items that improve my home's functionality and safety. On this end, Prime Day doesn't disappoint.

But first, make sure you have an Amazon Prime membership to shop the event. If you don't have one and you're new to Prime, you can sign up for a 30-day free trial. Now, here are a few items that can give you peace of mind, improve your home's functionality and potentially save you money.

This deal protects your biggest asset

I bought an older home a few years ago, and one of my main concerns was its electrical. Then, I found out about the Ting sensor. It's a smart home sensor you plug into a wall that detects electrical irregularities that could result in a house fire.

Once you install the plug, you download the free Ting app on your phone to monitor it. You'll receive real-time alerts when it detects issues. Some issues it detects include micro-arcing, caused by faulty wiring, malfunctioning devices or loose connections.

Now, I have peace of mind knowing that if any hazards arise, I can fix them before a fire occurs. During Prime Day, you'll save $20 on a Ting sensor.

This deal adds another layer of protection to your home

Smart locks are among the smartest home security upgrades you'll make. They're easy to install. And I like them for the convenience and security they offer.

These devices typically feature a keypad for PIN codes or biometric sensors, allowing you to secure your home without fumbling for physical keys. You can install them on any entry point, such as your front door, and even assign temporary codes for guests or service providers.

Worried you didn't lock your front door when you left home? Access the app and lock it remotely, instead of driving back home. You should also look for ones, like the one I recommend here, that offer weatherproofing and battery backup, so you still have access during a power outage.

And during Prime Day, you can save up to $65 on this option:

Lower your home's energy costs with this deal

Electric bills continue to surge. With the summer months driving up demand, the average household will spend 10.5% more, per the National Energy Assistance Directors Association.

The main culprit behind your energy costs? Your air conditioner. This is where a smart thermostat helps you control costs. If you plan to be away from home for days or weeks at a time, you can set your thermostat at a higher temperature. This reduces the demand placed on your AC unit and the energy it uses.

Over time, setting your thermostat by 7 to 10 degrees warmer when you're away from home lowers your energy costs by around 10%. This could equate to hundreds of dollars per year. On top of that, you can save $50 on a new unit during Prime Day.

Ultimately, while Prime Day isn't overflowing with deep discounts, it doesn't mean you can't find good deals. Being strategic when shopping can help you find deals that add value to your home, both now and into the future. These three deals represent ways you can improve your home's functionality, ensure it remains safe and save money on energy costs.

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When people talk about closing costs and other expenses to prepare for when you buy a new home, they often forget to mention furniture, gadgets and new decor. And after 15 years of living in apartments, when I moved into a house, there was a lot to purchase.

Suddenly, I had a separate dining room. And a living room that can fit an L-shaped couch. And a kitchen with enough storage space to finally fit my KitchenAid stand mixer. A backyard where we could grill! A basement where we could work out! Wonders never ceased, but those wonders have a price attached.

My husband and I have been slowly filling up the space, and I try to take advantage of sales seasons so we can save at least a little on all the purchases. Now is a great time to do that as Amazon Prime Day kicks off this week, setting off sales at other retailers, and as we approach annual Fourth of July season sales. We're starting our first full summer in the house, and here's what I'm looking out for. If I already made (or am specifically planning to make) a purchase, I'll let you know what I went with.

Items for hosting

One of the best parts of having a house is getting to host your friends and family, but it helps to have some key supplies. Here's what I'm looking at.

Drink pitchers

My ideal symbol of hosting is a pitcher of iced tea or lemonade at the ready when someone comes over, so I need pitchers. I looked for a glass pitcher over plastic so I can potentially run it through the dishwasher, but mostly so I don't have to think about microplastics.

Amazon option: This 1-gallon square pitcher has a strainer option on its lid, which is useful if you're making something like sangria or lemon-infused water. The list price is $41.23, and it's currently listed for $32.99.

Alternative option: This 64-ounce glass pitcher from Walmart is smaller than the Amazon option but has a more appealing design. It's typically $13.99 but currently lists for $12.59.

What I ended up getting: The lidded options are definitely functional, but I liked the aesthetic of this 80-ounce glass pitcher from Crate & Barrel for $14.95. If you've just moved, Crate & Barrel has a "new mover" promotion for a discount.

Drink dispensers

Along with multifunctional pitchers I can use for bringing water to the dining room table, I wanted a glass drink dispenser I could use for making batch cocktails.

Amazon option: This highly rated dispenser comes with a blackboard sign so you can write what the drink is along with the dispenser. It comes in 1-gallon, 1.5-gallon, and 2-gallon sizes, and it also has the option of getting two dispensers that sit side-by-side on a stand. There is a Prime Day Deal on it, and the 1-gallon set of two with a stand is $32.75 (list $38.99).

Alternative option: Target has a lot of handy home goods, including this stylish 1.8-gallon dispenser with a wooden stand. It's $34.99.

What I ended up getting: We're back at Crate & Barrel with a splurge: This 1.5-gallon dispenser with a marble stand is on sale as part of the company's 4th of July Warehouse Sale. Originally $154.90, it's 10% off.

Cornhole set

If you're having friends and family over, it's nice to have a noncommittal activity available to them, like cornhole. I thought this would be a simple purchase, but there are many different cornhole set options available, from regulation-sized to strictly portable. Let's get into it.

Amazon option: Amazon Basics has a portable set available made out of plywood. It has 4.5 stars from 2,500 reviews and is priced at $73.49.

Alternative options: You can get a Rec League regulation-sized set from Dick's Sporting Goods. It's usually $169.99 but is on major sale for $99.98.

REI sells a backpack cornhole game if you want one to be able to bring somewhere easily, for $39.95.

What I ended up getting: Believe it or not, this was a Costco purchase. Costco has a basic GoSports all-weather set with a simple but classic design. It's $159.99. If you're not already a member, you can get $40 back on a Costco membership.

Backyard fun

I'm excited to have a backyard to relax in. Here's what will make it more fun.

Grill

It's not a backyard summer without a grill. Grills come in all shapes, sizes and price points, so this is where it would help to do some research and pick out what you want, then see if it goes on sale.

Amazon option: Amazon has many Traeger grills, including this portable electric wood pellet grill and smoker. There is a Prime Day Deal on this for $422.61 (list price $499.99).

Alternative option: Lowes has some short-term sales on grills now, including this black pellet grill from PitBoss that has smart compatibility. Normally $749, it's $649 until June 24.

What I ended up getting: Following a friend's lead, we want to get a Weber grill — and you can get those at Costco, with delivery available. This gas grill, for example, is currently $110 off through June 28, coming in at $889.99. There's also a promotion going on through July 25 to save money if you buy multiple Costco Direct items on the same order. If you're not already a member, you can get $40 back on a Costco membership.

Patio umbrella

I was lucky to get a set of patio furniture from my parents that they didn't use anymore, but it's missing an umbrella. Here are some new options.

Amazon option: This 9-foot table umbrella comes in a multitude of colors and has 4.4 stars from over 5,000 reviews. The list price is $58.99, and it's currently on sale with a Prime Day Deal for $39.99.

Alternative options: If you don't have a table to put the umbrella in, try this 15-foot umbrella with a base from Walmart. It's typically $209.99, but certain colors are on sale for $119.99.

If you're a Sam's Club member, check out their patio furniture option. This 10-foot cabana umbrella is selling for $159.97.

Inflatable pool

If you don't buy a house with a pool, you might as well get the next best thing. Inflatable pools are great to have handy if you have grandchildren or nieces and nephews who visit — or if you're an adult who wants to relax outside on a hot day without going to a public pool.

Amazon option: This actually is the option I'm purchasing, based on a recommendation from a friend: An inflatable "tanning pool" lounger made for adults with a pillow to lean back on and cup holders for your lemonade. An extra-large option is typically $45.99 but is currently on sale with a Prime Day Deal for $31.99.

Alternative options: If you're looking for something more for kids, Target has an inflatable pool with a play center and a mini slide. It's usually $117.99 but is on sale for $45.99 (a whopping 61% off), and it has just over four stars from 79 reviews.

If you want something to imitate a real backyard pool, Walmart has an above-ground inflatable pool. A 12-foot version is usually $169.99 and is currently on sale for $109.99.

Summer activities

An exciting part of moving to a new place is getting to explore its public spaces. My new town has a lake and parks accessible to residents, as well as lots of summer concerts and movie screenings. Here's what I'm looking at to make the most of those resources.

Picnic blanket

Whether you're heading to a park or a beach, it's helpful to have a large picnic blanket. Here are some options I found.

Amazon option: This large beach blanket is made with sand in mind, and it has 4.7 stars from over 14,600 reviews. The list price is $28.98, and it's currently on sale with a Prime Day Deal for $18.97.

Alternative option: Target has an extra-large picnic blanket (70 by 80 inches) that's quilted for extra comfort. It's usually $39.99 and is currently on sale for $25.59.

What I ended up getting: I envision using this mostly for relaxing at a local park, so I needed something large and water-resistant for dewy grass. This XL picnic blanket tote from Macy's seems to fit the bill, according to reviews. It's usually $80 but has a Limited-Time Special price of $48.

Beach towels

I wanted to make sure I had extra beach towels so I have something to offer visiting friends if we go to the town pool. Here's what I looked at.

Amazon option: Amazon Basics has a couple of options of 100% cotton beach towels with the classic cabana stripe design. Their list price is $23.26.

Alternative options: If you want to get a few towels to have on hand, Walmart has a 4-pack of colorful beach towels. Usually $40.99, it's on sale for $29.99.

What I ended up getting: This was another Macy's purchase for me during their most recent sale: Striped cotton towels from The Beach House. Their list price is $50 each, but they currently have a Today Only price of $16.99.

Practical items

Now, living in a house is not all fun (inflatable pool!) and games (cornhole!) all the time. There's also upkeep to take care of. Here's what I'm managing, if it helps give you ideas.

Smart thermostat

Pretty much every time there's a sale season, I check for sales on smart thermostats so I can slowly but surely change out my outdated system.

Amazon option: Amazon has its own branded smart thermostat that you can link up with your Alexa. The list price for one thermostat is $79.99, and it's currently on sale with a Prime Day Deal for $57.99.

Alternative option: You can also buy thermostats directly from the manufacturer. Many HVAC experts I've talked to speak highly of the Ecobee; the Premium thermostat is usually $259.99, but is currently on sale for $209.99.

What I ended up getting: Once you start with one system, you basically have to keep going with it, so I always look for sales on Google Nest thermostats. A 4th gen learning thermostat is on sale at Best Buy for $239.99 (list price $279.99).

Dryer vent cap

This is a small detail, but homeowners know the value of paying attention to small details. In this case, a proper dryer vent could mean the difference between enjoying your summer or spending your summer fending off a wasp nest in your dryer vent.

Amazon option: Amazon offers a 4-inch dryer vent cover with a magnetic door and lint trap. It's usually $12.99 but has a Prime Day Deal for $9.99.

Alternative option: If a magnetic door seems a bit too much, Walmart has this classic dryer vent cover designed for airflow. It's $10.

What I ended up getting: My dryer vent is a good target for birds because of where it is on the house, so I went for this airtight dryer cover from Home Depot. It's $19.97.

Weeding tool

As your yard soaks in the sun and warmth, so do weeds. If you, like me, are in a battle against weeds, here are some good buys.

Amazon option: When I told the editor of the Kiplinger Retirement Report that I'd started gardening, he told me I needed to get a Japanese weeding tool for the most efficiency. This weeding sickle from Suizan is on Amazon for $27.80, and I'm keeping an eye out to see if it goes on sale.

Alternative options: Target has a 40-inch weed puller tool that allows you to do more while standing. It's usually $69.99 and is on sale for $39.99.

You could also skip the individual tools and invest in a whole set. Home Depot has a 9-piece gardening tool set with a functional tote bag from Misopily. It's usually $77.62 and is on sale for $72.27.

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Many retirees rely on their homes for financial security. According to the Federal Reserve’s Survey of Consumer Finances, home equity accounts for a substantial share of net worth among households aged 65–74.

But when it comes time to tap that value, often through a sale, converting housing wealth into cash doesn’t always go as planned for older adults.

A recent study finds that even when home prices are relatively strong, the proceeds older sellers receive can differ meaningfully from those of younger homeowners. Though timing and how the sale is managed play a role.

And while the research doesn’t point to a single cause for the disparity, it raises broader questions about how home-sale outcomes can affect retirement income and, yes, taxes. Here’s more to know.

Why older homeowners get less money for their homes

A study from the Center for Retirement Research at Boston College finds significant variation in sale outcomes for older homeowners. It analyzed roughly 10 million repeat home sales using CoreLogic deed records linked to demographic data to estimate sellers’ ages.

Researchers compared outcomes across age groups while controlling for home type, location, and broader market conditions and found a consistent gap.

A key takeaway? Older homeowners tend to realize lower proceeds when they sell compared with younger sellers with similar observable characteristics.

According to the study's findings:

• "Older sellers get less starting at age 70," with the gap "increasing with each additional year."
• There is an estimated 5% gap in realized sale proceeds over the average 11-year holding period for some cohorts.
• For a typical home, the differences can amount to tens of thousands of dollars, depending on market conditions. Per the study, for a median $400,000 home, that is roughly a $20,000 reduction in proceeds.

There appear to be several explanations for the gap. But the study points to two primary factors.

• First, older homeowners are more likely to sell homes with fewer recent updates, which can affect pricing even in strong markets.
• Second, the researchers report that in some cases, older adults are more likely to use off-market or less competitive listing channels than the Multiple Listing Service (MLS), which can result in fewer bidders.

Also worth noting: Some home sales at older ages are driven by life transitions like downsizing, health changes, or moves into assisted living, where speed and certainty matter more than maximizing the price. In some cases, that can mean accepting an early offer rather than waiting through a longer listing process.

How a lower home sale price affects retirement income

The impact of lower home proceeds can show up in how retirees adjust their broader financial picture after the sale.

A retiree may expect a home sale to generate a certain amount of cash, enough, for example, to fund a year or two of spending without significantly tapping retirement accounts. But if the actual sale comes in lower than expected, that shortfall might be covered elsewhere, e.g., through additional withdrawals from traditional IRAs, 401(k)s, or taxable investment accounts.

• Those withdrawals are generally taxed as ordinary income. As a result, a larger-than-planned draw in a single year can push a retiree into a higher marginal tax bracket, even if only part of their income crosses the threshold.
• The same increase in reported income can also eventually affect Medicare premiums (IRMMA surcharges), since those costs are tied to income levels from two years prior.

As a result, a lower-than-expected home sale price can have retirement planning implications beyond the transaction itself.

Capital gains tax on home sales over age 65

Even though the tax impact here is primarily about how income replacement flows through the rest of the retirement portfolio, capital gains are an important consideration in retirement.

The tax treatment of a primary residence remains unchanged, including the capital gains home sale exclusion of up to $250,000 for single filers and $500,000 for married couples. That tax break can shield many homeowners entirely from tax on the sale.

Note: A 2026 analysis by the Tax Policy Center and Brookings Institution finds that about 90% of households age 65 and older will likely remain within the current home-sale capital gains exclusion, while roughly 10% would have gains large enough to exceed it.

Still, other recent data indicate that approximately 8% of home sales resulted in gains that exceeded the home exclusion threshold. That's more than double the percentage over the last five years or so, according to a report from the consumer information and analytics company CoreLogic.

That rising share of taxable gains has prompted several proposals on Capitol Hill, including bills that would eliminate capital gains taxes on home sales and a recent legislative proposal to increase the capital gains exclusion to $1 million for homeowners age 65 and older.

Why is this happening? One issue is that the exclusion limit hasn't been adjusted for inflation, so the value of the tax relief provided by the home sale exclusion has eroded over time.

As a result, homeowners across the U.S., but more often in states with high property values, like California, New York, New Jersey, Massachusetts, Florida, and Colorado, are likely to see gains exceed the exemption limit.

Selling a home in retirement: Bottom line

If you're considering a home sale, it may help to speak with a financial planner or tax professional first to understand how the proceeds could affect your retirement finances.

Every individual's financial situation is different, and a trusted professional can help with a tailored strategy.

However, a few considerations:

• How the sale fits into your broader retirement income strategy
• Whether the proceeds could affect taxable income or Medicare premiums
• How the proceeds will be used, saved, or reinvested

It may also be worth considering whether the timing of the sale allows enough time to attract multiple buyers. As the study suggests, urgency can limit a seller's options and make it harder to maximize the sale price.

Related

• New Bill Proposes $1 Million Capital Gains Tax Exclusion for Those Over Age 65
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When people think about moving to another country, they often picture retirees chasing warmer weather or digital nomads working from a beach somewhere. But a growing number of millionaires are packing up and relocating, too.

Around the world, wealthy individuals are increasingly choosing where they live based on such factors as taxes, business opportunities, safety and overall quality of life. Some seek a better place to grow a business. Others want a more predictable tax environment or simply a lifestyle that better fits their priorities.

While most Americans aren't planning an international move soon, it's still worth paying attention to where wealthy people are going. Their decisions often reflect broader economic trends and reveal what they value most when it comes to building and preserving wealth.

Why wealthy individuals have more flexibility to relocate

For many affluent households, location has become more of a choice than a necessity.

Technology has made it easier to run businesses remotely, manage investments from anywhere and stay connected with clients and colleagues around the world. At the same time, many countries have rolled out residency and investor visa programs designed to attract wealthy newcomers.

As a result, more high-net-worth individuals are treating relocation as part of their overall financial strategy rather than simply deciding where they'd like to retire.

What attracts wealthy residents?

Taxes often grab the headlines, but they're rarely the only reason people move. The countries attracting wealthy newcomers tend to offer a combination of financial advantages and lifestyle benefits.

Favorable tax policies

Lower income taxes or special tax programs for foreign residents can help make a country more appealing, particularly for business owners and investors.

Political and economic stability

People with significant assets generally value predictability. Stable governments, strong economies and reliable institutions can be just as important as tax savings.

Strong property rights

Whether someone owns businesses, real estate or investment assets, legal protections matter.

Access to business opportunities

Many wealthy individuals are still actively growing companies or managing investments. Being close to financial centers and global markets can be a major advantage.

Healthcare, education and quality of life

Good schools, quality healthcare, safety and overall lifestyle often play a big role, especially for families.

1. United Arab Emirates

The United Arab Emirates continues to be one of the world's biggest magnets for wealthy newcomers. A major reason is its zero personal income tax policy, which allows high earners to keep more of what they make. But taxes aren't the whole story.

Cities such as Dubai have worked hard to become global business hubs, offering modern infrastructure, investor-friendly visa programs and easy access to markets across Europe, Asia and Africa.

For entrepreneurs, investors and international business owners, the UAE offers a combination that's hard to ignore: tax efficiency, opportunity and a growing global reputation.

2. United States

Despite higher taxes than some countries on this list, the United States remains one of the most popular destinations for wealthy migrants. Why? Because America still offers tremendous opportunities to build wealth.

The U.S. is home to some of the world's largest financial markets, strongest entrepreneurial ecosystems and most innovative companies. For many investors and business owners, the opportunity to create wealth outweighs concerns about taxes.

Many wealthy people aren't just looking for a place to keep their money — they're looking for opportunities to grow it.

3. Italy

Italy might seem an unexpected addition to the list, but it's become increasingly popular among wealthy foreigners.

Part of the appeal comes from tax incentives designed to attract international residents. Lifestyle is also a major factor.

From its historic cities and world-renowned food to its slower pace of life and access to quality healthcare, Italy offers something many people are looking for as they approach retirement or seek a better work-life balance. For some wealthy families, the move is just as much about enjoying the lifestyle they’ve worked hard to create as it is about finances.

4. Switzerland

Switzerland has long been associated with wealth, for good reason. The country is known for political stability, a strong financial sector and a reputation for preserving wealth during uncertain times. Investors often view Switzerland as a safe place to store assets and navigate global volatility.

Add excellent public services, low crime rates and stunning scenery and it's easy to see why it remains a favorite destination for affluent individuals.

It's certainly not the cheapest place to live, but many residents see the stability and quality of life as well worth the cost.

5. Singapore

Singapore has become one of the most attractive destinations for wealthy individuals looking to establish a presence in Asia.

The country offers a business-friendly environment, efficient government services and a strong legal system. Its location also makes it an ideal gateway to many of Asia's fastest-growing markets.

Safety, education and financial infrastructure consistently rank among Singapore's strengths, helping attract investors, executives and entrepreneurs from around the world. For many wealthy newcomers, Singapore offers the rare combination of economic opportunity and day-to-day convenience.

What these countries have in common

While these destinations differ in many ways, they share several characteristics that wealthy individuals tend to value.

They generally offer:

• Predictable tax policies
• Stable governments and economies
• Strong legal protection
• Access to global markets
• High standards of living

What's interesting is that low taxes alone don't explain the trend. In most cases, wealthy individuals look for a complete package that combines financial opportunities with long-term stability and quality of life.

What everyday investors can learn from where the wealthy are moving

Most people aren't going to relocate to Dubai or Switzerland. There are still some useful takeaways from these migration trends.

• Look at the full financial picture: The wealthy often evaluate taxes alongside investment opportunities, business prospects and lifestyle considerations. That's a good reminder that financial decisions rarely come down to one factor.
• Don't overlook cost of living: A lower tax bill doesn't always mean you'll come out ahead if housing, healthcare and other expenses are significantly higher.
• Value stability: One thing many of these countries have in common is predictability. Building a financial plan that can weather economic ups and downs is often more important than chasing short-term advantages.
• Think about more than money in retirement: Healthcare access, housing costs, safety and lifestyle can have just as much impact on retirement satisfaction as investment returns.
• Build your plan around your goals: The wealthy aren't all moving for the same reason. Some want business opportunities, while others prioritize lifestyle or wealth preservation. The lesson is to focus on what matters most to you rather than following someone else's strategy.

It's about more than taxes

It's tempting to assume wealthy people are moving to avoid taxes, but the reality is usually more nuanced.

The countries attracting the most millionaire migrants tend to offer a mix of opportunity, stability, strong legal protections and quality of life. Taxes might help open the door, but they're rarely the only reason people choose to walk through it.

For everyday investors, the bigger lesson is knowing that successful financial planning is about balancing money, lifestyle and long-term goals in a way that works for you.

Use the tool below, powered by Bankrate, to connect with a financial professional who can help you develop a personalized plan to grow your wealth and reach your financial goals:

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It's a tale as old as time: If you live in a high-cost area like Long Island, San Francisco, or Seattle, your paycheck doesn't stretch nearly as far as it would in, say, Pittsburgh. Yet, the IRS taxes your income exactly the same.

A new bill from lawmakers on Capitol Hill would flip that script by linking your federal tax obligations to your home address.

The Cost of Living Tax Cut Act, introduced by House Reps. Laura Gillen (D-NY-04) and Mike Lawler (R-NY-17) would adjust federal income tax brackets based entirely on where a taxpayer lives.

"This bipartisan bill would help lower taxes for families in high-cost areas [like Long Island] by accounting for regional differences in the cost of living and ensuring taxpayers can keep more of what they earn," Gillen said in a recent release.

Lawler echoed the sentiment for his constituents in Hudson Valley, New York, arguing that the tax code should reflect the economic reality of high-cost regions.

Yet while the prospect of localized tax relief sounds promising to families in expensive ZIP codes, the proposal is likely to face heavy scrutiny over who will ultimately foot the bill for the corresponding drop in federal revenue.

Here is a breakdown of how this plan could change your take-home pay, which areas stand to benefit, and what this means for the upcoming mid-term election season this fall.

How the bill adjusts the tax brackets

The Cost of Living Tax Cut Act is designed to prevent households in more expensive regions from being pushed into higher tax brackets when their real purchasing power is relatively low compared with the rest of the U.S. If passed, the bill would take effect after December 31, 2026.

The bill's framework relies on localized data to determine your federal tax liability:

• The index: The bill directs the Secretary of Commerce to use regional price parities (RPPs) to calculate an annual cost-of-living index for metropolitan and rural areas.
• The adjustment: Instead of applying uniform national tax thresholds as it does now, the IRS would expand tax brackets in regions with an above-average cost of living.
• The savings: By widening the lower tax brackets, more of a household's income would be shielded from higher tax rates.

Who wins the affordability contest?

If passed, the Cost of Living Tax Cut Act would provide the most significant relief to major metropolitan statistical areas (MSAs) where the local purchasing power of a dollar is typically lower than the national average.

Per the most recent regional economic metrics from the Tax Foundation, the primary beneficiaries of this new bill would live in regions where a typical $100 has the real purchasing power of only $84 to $90. For example:

• California metros: The San Francisco Bay Area (Oakland, Berkeley, San Jose, Santa Clara), Los Angeles, Orange County, San Diego, and Santa Barbara.
• The Pacific Northwest: The greater Seattle-Tacoma-Bellevue metro area in Washington.
• Northwest corridor: The broader New York-Newark-Jersey City metro area (spanning NY, NJ, and PA), Boston-Cambridge-Newton (MA/NH), and high-cost zones in Connecticut.
• Hawaii and South Florida: Urban Honolulu and the Miami-Fort Lauderdale-Pompano Beach metroplex.

Under the proposed framework, families in the affected ZIP codes would see their tax brackets widened proportionally. Conversely, regions where the cost of living is at or below the national average — like parts of Arkansas, Louisiana, or Ohio — would see no changes to their baseline brackets.

However, federal policy historically requires an offset for targeted tax cuts. Since the legislation bars lawmakers from adjusting tax brackets downward in lower-cost regions, the federal government would have to absorb the resulting deficit, which could eventually lead to spending cuts or the search for alternative federal revenue sources.

The hidden cost of geographic tax cuts

Data published by the Rockefeller Institute of Government reveals that high-wage coastal states subsidize spending in the rest of the nation. For instance, in a single fiscal year, New York residents paid $19.4 billion more to the federal government than the state received, while California taxpayers contributed an extra $72 billion.

So if the federal tax code were to cut taxes for some areas and not others, that might lead to several potential long-term risks:

• A structural drop in federal revenue. Think tanks like the Center on Budget and Policy Priorities often note that targeted tax cuts substantially reduce federal funding for key national obligations like infrastructure, Social Security, and defense.
• Ripple effects in the tax code. Drops in federal revenue could lead to raising baseline tax rates nationwide, implementing broad surtaxes, or risking an increase in the national deficit. This fiscal pressure isn't unique to the federal government; for example, a state-level structural deficit was one reason Washington enacted a millionaire's tax on its wealthier residents.
• Porous boundaries and "tax cliffs." Relying on regional price indexes could create tax spikes right at city borders. For example, a taxpayer living just outside a high-cost metropolitan boundary line who works inside it could face a higher federal tax burden than a neighbor living just one mile away. A similar dynamic already plays out with commuters who live in one state and work in another.
• Increased regulatory burdens. Shifting to an address-based tax system forces the IRS to track, audit, and dynamically update tax brackets across hundreds of MSAs. In an era of $1 billion IRS funding cuts, managing localized federal brackets would heavily strain resources. Furthermore, tax preparation software would need to become more complex, potentially driving up filing costs for everyday taxpayers and increasing the risk of location-reporting errors or geographic fraud.

Bottom line: Will the legislation pass?

Even though the Cost of Living Tax Cut Act addresses a very real financial pressure point for millions of voters, it will most likely face a steep climb to become law.

The proposal must compete against much broader fiscal blueprints, like the 2025 Trump Tax Bill, which focused on making previously enacted individual tax cuts permanent and revamping the federal standard deduction. Adding a localized layer to the IRS tax code could complicate revenue projections and require extensive bipartisan negotiation and spending offsets.

With several congressional seats on the ballot this November and a recent 3.8% inflation surge reported by the U.S. Bureau of Labor Statistics, targeted affordability proposals may take center stage. Even if this specific bill stalls, it highlights a growing legislative focus on how your ZIP code impacts your wallet.

So, before making any sudden moving plans for a cheaper area, wait to see how these fall tax proposals shake out. Your bracket might not change, but your vote could shape future local tax policy.

Read More

• People Are Leaving High-Tax States: Here's Where They're Moving Instead
• New Bill Proposes $1 Million Capital Gains Tax Exclusion for Those Over Age 65
• Are No-Income Tax States Better to Live In?

By the time many real estate investors buy their last property, they are no longer chasing opportunity. They are chasing a tax deferral.

That may sound harsh. But after years as a financial professional working with investors selling appreciated real estate, I have noticed something important: Many people do not actually want another property. They simply do not want the tax bill.

So they buy something anyway.

A few years ago, a man walked into my office who had done extraordinarily well in real estate. Over several decades, he had built a portfolio of roughly 160 single-family rental properties. He had appreciation. He had cash flow. He had equity most investors only dream about.

He was also exhausted.

As we sat down, I expected the usual conversation: Cap rates, depreciation, financing, 1031 exchange timelines. Instead, after a few minutes, he leaned back and said something I have never forgotten.

"I don't think I want another property," he said. "I think I just want relief."

Then we moved on to the conversation he actually needed to have.

The question most investors never ask

When investors approach a 1031 exchange, the conversation almost always begins with taxes.

• How much do I owe?
• How long do I have?
• What qualifies as replacement property?

These are important questions. The 1031 exchange remains one of the most powerful tax-deferral tools available to real estate investors.

But there is a bigger question that rarely gets asked: What role do I want real estate to play in the rest of my life?

For many investors, the answer to that question has changed, often without them fully realizing it.

The problem is that the 1031 process does not pause long enough for them to notice.

The 45-day clock changes behavior

Once a property closes, the investor has just 45 days to identify a replacement property. That clock creates a particular kind of pressure worth understanding.

Under pressure, people optimize for the immediate problem in front of them. In a 1031 exchange, the immediate problem is almost always taxes.

For many investors, the potential capital gains tax bill is large enough to change behavior. So instead of asking bigger questions about lifestyle, concentration risk or long-term goals, the focus narrows to one thing: How do I avoid paying taxes right now?

That is how a person who quietly wants fewer responsibilities ends up buying another property.

The replacement property often looks reasonable on paper. It may be newer, larger or located in a stronger market. It may promise fewer headaches than the property being sold.

But six months later, many investors realize something important: They solved a tax problem and created a lifestyle problem.

The last property is often different from the first

Most successful real estate investors built wealth through concentration, patience and hard work.

They bought properties when others would not. They dealt with tenants, vacancies, repairs, financing issues and economic cycles. They accepted the burdens of ownership and benefited from appreciation over time.

But eventually something changes.

The investor who once enjoyed operating properties begins valuing simplicity more than expansion. The appeal of another roof replacement fades. Retirement becomes less theoretical and more real. Children often do not want to inherit management responsibilities.

And quietly, many investors begin asking themselves a question they never expected: Why am I still adding to a portfolio I would rather be exiting?

That is a completely different objective than the one that built the portfolio in the first place.

Yet many investors continue buying replacement property as though nothing has changed.

When relief becomes the goal

There is nothing wrong with wanting relief.

• It is not laziness
• It is not failure
• It is not a lack of ambition

It is simply the recognition that the goals driving wealth accumulation are not always the same goals that serve wealth preservation.

That distinction matters because a 1031 exchange is not just a tax decision. It is often a life decision.

Investors who recognize this early usually have more options.

Structures like Delaware statutory trusts (DSTs) and 721 exchange strategies were created for investors who want continued real estate exposure without remaining active landlords.

They are not appropriate for everyone, but they reflect a broader trend: Many investors eventually transition from operating properties to allocating capital.

That is a fundamentally different conversation than cap rates and closing timelines.

Freedom has value, too

One of the most overlooked ideas in financial planning is that simplicity, flexibility and time all have value.

Not every decision should be evaluated exclusively through the lens of tax minimization.

The investor who aggressively defers every dollar of capital gains sometimes ends up trapped in a portfolio that no longer fits their life.

Meanwhile, the investor who accepts some tax in exchange for flexibility and peace of mind may end up in a much better place emotionally and financially.

There is no universally correct answer.

But investors should at least be honest about the trade-offs.

The man with 160 rental properties eventually found a path that gave him what he was actually looking for. It was not another lease agreement. It was a different relationship with his capital entirely.

The better question

A 1031 exchange can be an excellent strategy. It has helped countless investors preserve and compound wealth over time.

But investors should be careful not to let the tax tail wag the investment dog.

Before the next exchange begins, it is worth sitting quietly with a question that has nothing to do with cap rates or closing timelines: What do I actually want from here?

For many investors, especially those who have spent decades building real estate portfolios, the honest answer to that question may surprise them.

It surprised the man with 160 properties.

But once he finally said it out loud, he already knew the answer.

Related Content

• A 1031 Exchange May Look Great for You on Paper, But It's Not Just About Taxes
• Counting on Real Estate to Fund Your Retirement? Avoid These 3 Costly Mistakes
• How to Turn Your 401(k) Into A Real Estate Empire — Without Killing Your Retirement
• Don't Defer Retirement if You're a Landlord, Defer Taxes Instead
• DST Exit Strategies: An Expert Guide to What Happens When the Trust Sells

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Spending the summer months in Arizona might sound intense — and it often is.

Between a stretch of 100-degree days, spiking utility bills, and the sudden storms of monsoon season, the desert climate can certainly feel daunting. But these few months only tell part of the story.

From fall through spring, Arizona shifts into a sun-soaked haven. During this period, the Grand Canyon State boasts the mild weather of coastal California at a comparatively lower cost.

That affordability extends to state income and property taxes. Residents enjoy a low flat income tax of just 2.5%, and property tax rates typically fall below the national average. There is no state inheritance tax to worry about, and Arizona waives its state sales tax on groceries.

Interested in finding your piece of the desert? Buckle up for a road trip. Here are the ten cheapest places to live in Arizona.

Cheapest places to live in Arizona

After Kiplinger ranked property tax bills from highest to lowest per county in Arizona, one trend jumped out: Rural areas are the cheapest. You’ll typically find a more affordable lifestyle in the country than in metropolitan areas like Phoenix.

But if you’re ready to see vast desert landscapes and quaint small towns and are willing to travel to a city for other amusements, look into these places in Arizona.

Note: Kiplinger used 2026 data presented by the Tax Foundation (sourced from the U.S. Census Bureau) to find the cheapest counties in Arizona to live.

Santa Cruz County

Median property tax bill: $1,415

Median home price: $233,000

At a median of $1,415, Santa Cruz County features the highest property tax bill on our list. Yet, home prices are relatively modest, at roughly $233,000, according to the Tax Foundation.

Located along the sunny Mexican border, Santa Cruz is Arizona's smallest county by land area, but don't let that fool you — there's plenty to do. Whether you're looking for a deeply cultural journey, historic exploration, or a scenic outdoor escape, Santa Cruz offers a distinct, authentic vibe in every region.

Nature lovers can experience world-class birding in the Patagonia Mountains and Patagonia Lake State Park, explore the scenic Arizona Trail, or hike through the lush Sonoita Creek State Natural Area. Just up the road, you can taste award-winning local varietals in the high-desert wineries of Sonoita and Elgin.

For history and art enthusiasts, the area boasts the historic 18th-century Spanish mission at Tumacácori National Historical Park and the oldest Spanish military presidio in Arizona at Tubac, which has evolved into a thriving, world-renowned artist colony.

In the heart of the county sits Nogales, the vibrant county seat and one of the nation's most crucial international ports, anchoring a rich Mexican-American border culture and a bustling produce economy.

So come to Santa Cruz for whatever your vibe is, but stay for the relatively affordable property tax bill.

Gila County

Median property tax bill: $1,386

Median home price: $269,400

Gila has the second-highest median home price on our list, at $269,400, though its median property tax bill is just under $1,400, per the latest U.S. Census Bureau Data. This anomaly exists because while property tax rates are low, highly desirable mountain communities like Payson and Pine drive up home values.

Outdoor enthusiasts might absolutely love Gila County for its local topography. The landscape shifts from the blooming cactus of the Sonoran Desert to the towering ponderosa pines of the Mogollon Rim, meaning a scenic hike is never far away, no matter where you roam.

Residents also enjoy easy access to Tonto Natural Bridge State Park, which contains the world's largest natural travertine bridge. Meanwhile, water lovers can explore Roosevelt Lake — the largest lake entirely in central Arizona — via boating, fishing, and camping along the shoreline.

Families might also love exploring the ancient, restored Salado pueblo ruins at Besh-Ba-Gowah Archaeological Park, or visiting the Tonto Fish Hatchery to learn all about the trout life cycle.

If you have an active, outdoorsy household, Gila County, Arizona, might make for an incredible next stop, and your wallet could thank you.

Yuma County

Median property tax bill: $1,333

Median home price: $217,800

With a median property tax bill hovering around $1,333, Yuma County stands out as a highly affordable corner of the Grand Canyon State. Home prices can also be lower, with a median home price just under $218,000, per the Tax Foundation's data.

Known as the "Winter Lettuce Capital of the World," the region famously produces roughly 90% of all the leafy greens consumed across North America during the winter months. Beyond its agricultural importance, Yuma is also recognized as the "Sunniest Place on Earth," holding a Guinness World Record for enjoying sunshine about 91% of the year — so be sure to pack your parasol!

Residents take advantage of this endless sunshine by kayaking, canoeing, and tubing along the Colorado River, exploring the scenic walking trails and butterfly gardens at West Wetlands Park, or conquering the rolling hills of the Imperial Sand Dunes.

But if outdoor adrenaline isn't your thing, no biggie; historical sites like the Yuma Art Center & Historic Theatre and a vibrant downtown shopping scene mean you can easily trade the desert heat for central AC without missing out on the local vibe.

Whether you're looking for booming seasonal energy or desert relaxation, Yuma County awaits, complete with a relatively low property tax bill.

Cochise County

Median property tax bill: $1,310

Median home price: $218,300

Homes in Cochise are priced slightly higher than in Yuma County, with a median price of around $218,300. However, the median property tax bill is comparatively lower, at just $1,310, according to the U.S. Census Bureau.

Keen on a unique, bohemian atmosphere? Cochise has you covered. Nestled in the region is Bisbee, an artsy mountain enclave beautifully carved into the steep hillsides of Mule Mountain Canyon. The town is filled to the brim with historic brick buildings, local boutique shops, and distinct craft breweries. And when you want to switch gears, you can easily head into other parts of the county for a totally different lifestyle.

The region is famous for the iconic Old West town of Tombstone, home to a community proudly preserving its rugged cowboy heritage through authentic stagecoach rides and daily reenactments of the historic gunfight at the O.K. Corral.

For the outdoorsman, the area surrounding the city of Sierra Vista provides exploration of underground rock formations at Kartchner Caverns State Park, hikes through the scenic San Pedro River Valley, and rock climbing at the Cochise Stronghold.

Offering a vibrant mix of exciting, unconventional, and rich all-American culture, Cochise County delivers a perhaps unforgettable southwestern lifestyle — with surprisingly low property taxes.

Mohave County

Median property tax bill: $1,238

Median home price: $281,000

Located a little over two hours from Las Vegas, Mohave County has a relatively low median property tax bill of just under $1,240.

However, the median home price is the highest on our list at $281,000, according to the latest Tax Foundation data. This is largely due to a localized housing shortage coupled with out-of-state migration from higher-cost states, like California. But don't let Mohave's slightly higher prices drive you away from this piece of American history.

The area has the longest remaining drivable stretch of the historic Route 66, giving residents access to vast, open desert landscapes. You can also take a walk into the Grand Canyon West, where stepping out onto the Skywalk — a famous horseshoe-shaped glass bridge suspended 4,000 feet above the canyon floor — isn't just a daring fantasy, but a reality.

The county's unique geography also features the iconic London Bridge, which was meticulously relocated from England to Lake Havasu City in the 1900s. Alongside local lakes and the Colorado River, the region offers plenty of water recreation paired with a deeply rooted historic mining culture.

Looking for a slice of wide-open outdoor living mixed with a lack of restrictive HOAs and plenty of lifestyle freedom? Mohave County, Arizona, might just be your next move.

Navajo County

Median property tax bill: $1,195

Median home price: $201,500

Navajo County home prices are relatively low compared with other places on our list, at just around $201,500. Median property tax bills are also considered cheap at under $1,200 per year, according to the Tax Foundation.

The area is known for the dramatic contrast of red sandstone buttes in the north and cool pine forests, alpine streams, and deep lakes in the south. Named after the Navajo Nation, which spans across its northern territory, the county is also home to the Hopi and White Mountain Apache tribes, creating a rich cultural tapestry.

Up north, residents can explore the iconic monoliths of Monument Valley alongside local Navajo guides, or visit Petrified Forest National Park to hike past ancient fossilized logs and vibrant strata in the Painted Desert.

Down south, the vibe transforms into a mountain resort centered on active communities like Show Low and Pinetop-Lakeside. Here, locals enjoy endless summer fishing, boating, and hiking at the Fool Hollow Recreation Area, as well as skiing and snowboarding at Sunrise Park Resort during the winter.

Navajo County might just be the ultimate all-season escape from the desert heat and winter snow, delivering a diverse mountain lifestyle paired with a surprisingly affordable property tax bill.

Graham County

Median property tax bill: $1,013

Median home price: $212,000

The median property tax bill in Graham is cheap, at slightly more than $1,000 per year. Home prices can also be relatively inexpensive compared to the rest of the state, with a median of about $212,000 according to the U.S. Census Bureau.

Those who want a classic, laid-back small-town American vibe might stop their travels right here. The county is named for the lofty Mount Graham, which serves as a picturesque backdrop for the entire county. Locals can hike or off-road up the mountain, or soak in nearby mineral hot springs.

Graham also has a tight-knit, small-town atmosphere, where local traditions, such as high school football games, holiday light parades, and seasonal harvest events, are center stage. The region even draws travelers from all over for its annual Salsa Fest.

Yet, despite the hometown charm, Graham is quite the scientific hub. Residents can book guided astronomy tours to see the enormous telescopes at the Mount Graham International Observatory, delve into the Space Shuttle simulators at Eastern Arizona College's Discovery Park, or head outdoors to learn about desert conservation at the striking Gila Box Riparian National Conservation Area.

Come to a place steeped in tradition, research, and strong community, and stay because those property taxes are just so cheap.

La Paz County

Median property tax bill: $873

Median home price: $135,800

A little over two hours from Phoenix is La Paz County, with a median property tax bill of just $873, which is lower than that of all neighboring counties. According to Tax Foundation data, the median home price is also relatively cheap, at $135,800.

La Paz is a snowbird's paradise. Winter residents and visitors flock to the region to enjoy sunny boating on the Colorado River, relaxed camping at Buckskin Mountain State Park, and the sprawling gem and mineral shows in Quartzsite.

For adrenaline seekers, the county delivers in spades, whether you're jet-skiing on the Parker Strip or tearing through the open desert along the rugged Arizona Peace Trail.

Conversely, when summer hits its stride, a beautiful hush falls over the region. Much like the rest of rural Arizona, the crowds thin out, treating residents to private solitude, wide-open roads, and peaceful river access all to themselves.

So if you want exceptionally low property taxes, you could reside in La Paz County for its vibrant winter fun and unmatched seasonal relaxation.

Apache County

Median property tax bill: $572

Median home price: $63,700

Apache County, Arizona, has the lowest median home price on the list, sitting under $64,000 according to U.S. Census Bureau data. Median property tax bills are also exceptionally cheap, hovering just below $575.

Because Apache County is a remote region where the Navajo Nation holds a significant portion of the territory, private acreage is limited, leading to more off-grid living and cheaper home prices. So if homesteading is your goal, the county has your back.

In particular, the sprawling high-desert flatlands near towns like Concho and St. Johns are famous for having highly affordable land, paired with a quietly independent attitude. You must be prepared to haul your own resources, though, which may include drilling a well or setting up solar power — traditional municipal utilities are scarce, which can rack up costs.

Yet when you want to transition from homesteading to recreation, the county offers unforgettable southwestern experiences. Residents can take incredible guided tours through the sheer cliffs of Canyon de Chelly National Monument, hike the brilliant badlands of the Painted Desert, or step back in time by exploring the Hubbell Trading Post National Historic Site.

For the modern frontiersman in all of us, Apache County's unbeatable wide-open freedom could be your calling.

Greenlee County

Median property tax bill: $518

Median home price: $158,600

Greenlee County is the cheapest place to live in Arizona. The median property tax bill is only $518, and home prices are around $158,600, per the most recent Tax Foundation data.

As Arizona's least populous county, Greenlee is peaceful, off the beaten path, and defined by mining, ranching, and warm small-town hospitality. In fact, it hosts the Morenci Mine, the largest open-pit copper mine in North America.

Running right through the county is the historic Coronado Trail (U.S. 191), featuring more than 400 twists and turns that provide prime motorcycling, cycling, and sightseeing opportunities.

Following this winding route upward leads to a dramatic change in scenery at Hannagan Meadow. In stark contrast to the desert canyons below, the meadow sits at over 9,000 feet, offering a mountainous setting for horseback riding, hiking, and both summer and winter eco-tours.

Rockhounds can also strike out into the desert to search for brilliant agate, blood-red jasper, and rare fire agate at public sites like the Round Mountain Rockhound Area and Limestone Gulch. Meanwhile, outdoor sportsmen may fish for native Arizona trout in the mountain streams or spend a quiet afternoon casting along the scenic banks of the Gila River.

So if you want to bypass bustling urbanization in favor of quiet, simple living, making the most affordable county in Arizona your next destination might just be the perfect choice.

More Cheap Places

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Meet Mike, a 67-year-old who has owned the same set of small Texas rental properties for 31 years. He's ready to step back.

The tenant calls, the late-night plumbing emergencies, the property taxes that climb every year? He's done. So he sells one of his appreciated properties (the highest-maintenance one!), and starts the 1031 exchange clock.

Forty-five days to identify a replacement property. One hundred eighty days to close.

In the past three years, that has sometimes been a challenging window. Replacement properties have been thin on the ground. Sellers and buyers couldn't agree on the price. Lenders have been cautious. Mike, three years ago, might have spent his 45 days in a panic and pulled out, paying the tax he was trying to defer.

Today, Mike has a different problem. Not too few options — too many.

Last week, Mountain Dell Consulting reported that the Delaware statutory trust market is now sitting on the largest inventory of investable equity it has ever had. About $3.9 billion of available equity across roughly 100 DST offerings, according to Mountain Dell associate Seth Anderson, who shared the figures with Bisnow on May 29.

The previous high-water mark was $3.2 billion, recorded in May 2023. And that's just what's open for new capital. Through May 2026, sponsors had already raised an additional $3.75 billion, up nearly 24% from the same period in 2025 ... with Mountain Dell projecting $10 billion to $11 billion in total DST sales by year-end.

That is a meaningful shift. And if you're sitting on a property sale, considering a 1031 exchange, or wondering whether passive real estate makes sense in your retirement plan, you must understand what just happened.

What is a Delaware statutory trust (DST)?

If you're new to the conversation, a DST is a legal structure that holds title to commercial real estate on behalf of multiple investors. You buy a fractional interest. A professional sponsor (typically a real estate firm) handles the work: Acquisition, financing, property management and eventual sale.

The IRS confirmed in Revenue Ruling 2004-86 that a DST interest qualifies as "like-kind" replacement property under Section 1031. So an investor selling a rental house, an apartment building, an office park or raw land can roll the proceeds into a DST and defer the capital gains tax — the same as if they had bought another property directly.

The minimum investment for most DSTs is about $100,000. Some go lower, some significantly higher.

For a 1031 exchanger facing the 45-day clock, a DST is often a safety net. Increasingly, though, it's the main event.

Why DST inventory hit a record high in 2026

Two forces are pushing equity into the DST space.

The first is the supply side. Major institutional names like Ares, Hines and Blue Owl currently lead the DST market by volume, while recent entrants, including Apollo, Nuveen, Fortress and Invesco, have launched their own DST funds in the past two years.

Fortress launched its DST fund in March, targeting housing for older people, student housing and multifamily.

Nuveen rolled out a DST last year that converts property sellers into investors in its $2.1 billion nontraded real estate investment trust (REIT).

Through May 2026, Ares alone accounted for nearly 22% of all DST equity raised — more than twice the next-largest sponsor.

The second is the demand side. Replacement property inventory in the broader market is tight; financing terms have stayed expensive. The bid-ask gap between sellers and buyers has been wide enough to kill plenty of deals.

First American Exchange Company, a national qualified intermediary, reported that its DST transaction volume rose 55% from 2025 to 2026. President Julie Baird told Bisnow the 1031 market is "fundamentally different than it was even five years ago."

Investors are choosing the certainty of a fully structured, professionally managed property over the uncertainty of chasing a direct deal in a difficult market.

What the record DST market means for 1031 exchange investors

Three things change when there is $3.9 billion in inventory, rather than $2 billion, waiting for capital.

First, you have selection power. You can be picky. You can compare a multifamily DST in Phoenix against a net-lease retail DST in Charlotte, against an industrial DST outside Atlanta.

Five years ago, 1031 exchangers were grateful for any DST they could close on inside the 45-day window.

Today, you can build a small portfolio across asset classes and geographies inside a single exchange.

Second, sponsor quality matters more than ever. When inventory was tight, you took what was available. With this much equity competing for investor attention, sponsors have to put their best deals forward to differentiate.

That said, not every offering on the market is a good one. The 1031 timeline pressures investors into decisions, and sponsors know it. Some offerings still arrive with thin reserves, optimistic distribution projections or debt that will be in trouble at the next refinance. It's critical to differentiate.

Third, and this is the one Mike cares about, DSTs are increasingly being used as a starting point for a longer wealth strategy, not just a one-time tax move. Some DST sponsors are affiliated with REITs and offer a future exit through a 721 UPREIT, in which DST holders contribute their interests into a REIT's operating partnership in exchange for partnership units. Tax-deferred.

That is a separate and complex topic — one I wrote about in my article Can You 1031 Exchange into a REIT? — in which the exit options are wider than they used to be.

DST investment risks every 1031 exchanger should know

A record inventory is good news for buyers … but it's not a free pass.

A handful of DST sponsors have had financial trouble in recent years. Properties carrying debt placed in 2020 or 2021 (when borrowing was cheaper) are facing refinancing realities that the original projections never modeled.

Some vintage 2019 and 2020 DSTs have struggled to deliver the distributions investors were originally shown.

Baird at First American said it plainly to Bisnow: "There have been some DST sponsors that have had some financial challenges, and so it really is incumbent upon those interested in those types of investments to understand the mechanics of the transaction and who's backing it."

That is the right framing.

5 questions to ask before investing in a DST

If you're evaluating a DST inside a 1031 exchange, or evaluating whether to consider one at all, here are five questions I would put on the table before signing anything.

1. Who is the sponsor, and how have they performed on prior DSTs over the past 10 years? Not their pitch deck. Their record.

2. What is the debt structure on the underlying property, and when does the loan mature? If the loan matures during a tough rate environment, the projected returns may not survive the refinance.

3. What does the lease tail look like? If a major tenant's lease expires in three years and the DST's expected hold is seven years, somebody is going to have to re-lease the space.

4. What is the income yield investors should reasonably expect, net of all fees? Not the gross number on the cover page. The net.

5. What happens if the property doesn't perform? Reserves, contingencies, sponsor obligations. Read those sections of the offering documents twice.

These are not "gotcha" questions — these are the basics. A sponsor who answers them clearly is a sponsor worth considering.

A sponsor who deflects is telling you something.

How to evaluate today's DST market in a 1031 exchange

Anderson at Mountain Dell told Bisnow he expects the DST market to remain in a "heightened level of sensitivity for the next three or four years." For investors, that sensitivity is an opportunity dressed in caution.

Mike, our 67-year-old hypothetical seller, will close his 1031 exchange this summer with three DST positions across two states. He will trade his late-night plumbing calls for monthly distributions. He will keep his deferred tax intact.

And because of the basis step-up at death, he will be in a stronger position to pass real estate equity to his children than he was with the rental properties he had 10 years ago.

That outcome is available to more investors than ever before in the history of the DST market.

The bigger questions are whether it fits your specific situation and which of the 100-plus current offerings are worth your money.

That is the conversation worth having before inventory tightens up again. (Which, historically, it always eventually does.)

Related Content

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• Do Self-Storage REITs Deserve Space in Your Portfolio? It's a Yes From This Investment Adviser
• How Well Do You Know Delaware Statutory Trusts? Test Your Knowledge
• I'm a Real Estate Investing Pro: This Is How to Use 1031 Exchanges to Scale Up Your Real Estate Empire
• DST Exit Strategies: An Expert Guide to What Happens When the Trust Sells

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

At some point in the future, somebody is going to go through all your stuff and throw out most of it. If you don't do it while you're still in good health, someone else will, after you suffer a medical emergency or you pass away. Do your heirs a favor and reduce your own stress by culling your possessions now.

It isn't easy. Discarding things that remind us of loved ones often brings up grief and guilt. And it's maddening to realize that the nice couch or rug we splurged on has no monetary value. Sociologist David J. Ekerdt at the University of Kansas, whose team interviewed more than 100 Americans over the age of 60 for his book Downsizing: Confronting Our Possessions in Later Life, says his research showed “it is an act of courage and of prudence” to confront the thousands of possessions we've accumulated over decades.

With that, here are 10 tips to get started.

1. Set your goal. Matt Paxton, author of Keep the Memories, Lose the Stuff, has his decluttering clients write their goal on a card, which he tapes on a wall. And he sets a deadline. When one client said she wanted her home tidy enough to have friends visit, he had her invite friends for dinner three weeks from that date. “Decluttering is like dieting or fitness. It's very easy to quit,” he says.

2. Don't buy those cute storage bins yet. Aspiring declutterers can be led astray by social media pictures of beautifully lit homes in which all the toys, towels or cleaning supplies are artfully stored in handsome baskets, says Jill Quigley, a professional organizer in Omaha. Some start decluttering by buying bins, which just creates more clutter. Instead, begin by organizing and reducing your stuff. Then, shop for storage solutions that fit your smaller stockpile.

3. Get help. Ekerdt says downsizing works better when you have help. If you're looking for more than just an extra pair of hands, expect to pay between $60 to $200 an hour for an organizing professional. Not only will they keep you motivated and focused, but many specialize in disposal — knowing which items to sell and where to sell them, and which organizations will take donations of non-sellable stuff.

Try searching for locals through professional organizations such as the National Association of Productivity & Organizing Professionals (NAPO) or the National Association of Senior & Specialty Move Managers. Erin Hayes, a professional organizer in New York City, says finding someone who is emotionally attuned to you is crucial, because deciding to toss beloved items can lead to anger and tears.

4. Categorize. Before you start tossing things, put them into categories. "I put like with like so you can see that you have three can openers or nine white tank tops," says Quigley. That makes it easy for clients to get rid of duplicates.

Categorization gets more challenging when it comes to knickknacks, but Kelly Brask, a professional organizer in Chicago and president of the Board of Certification for Professional Organizers, a division of NAPO, tries separating items according to the memories they inspire. That way, people can see how many things they are keeping to, say, remember a grandmother, and consider whether only one or two items are enough for that purpose.

5. Start small. Professional organizers suggest beginning with small, easy tasks. Hayes starts her clients with areas unlikely to spark memories or emotions, such as junk drawers or tool closets. Once they see those cleaned up and organized, they have more confidence to tackle bigger projects, she says. To prevent burnout, she limits decluttering to six hours a day.

6. Beware the "purger's high." Liberating yourself from clutter can feel so good that some people get into a tossing frenzy, says Cristiane Sgrott, an organizer in the Washington, D.C., area. Professional declutterers like herself shake every book, check every pocket and open every teapot. Sgrott has stopped clients on what she calls a "purger's high" from tossing out oven mitts and old shirt boxes where someone had hidden cash.

She also discourages clients from throwing potentially sensitive paperwork or electronics into trash bins. Instead, many businesses and community services offer shredding and secure recycling, she says. "You should be ruthless but not reckless."

7. Don't expect a windfall. One barrier to downsizing: Accepting the reality that you won't recoup much for things you paid a lot for. As baby boomers age and downsize, they're creating a flood of furniture and collectibles, says Julie Hall, director of the American Society of Estate Liquidators.

For realistic value estimates, view prices on sold items on eBay, or try pricing services such as WorthPoint, author Paxton suggests. Selling items yourself through a garage sale or online postings takes a great deal of time and effort, and typically yields comparatively little. Paxton prefers auction houses that handle all the work and offer both in-person and online bidding, such as Everything But The House, MaxSold and Bid-Rush. Such platforms typically take 30% to 40% of your earnings. “The 60% you will receive from the auction house is larger than the 100% you would get on your own,” says Paxton.

Don't expect much of a tax write-off for donating your stuff, either. Charities have become pickier about what they'll accept, and recent changes to tax law limit noncash contribution write-offs.

8. Leave a legacy of love. “You don't want to leave your friends and family with a house full of crap and a bunch of work. You want to leave a legacy of love,” says Brask. “Make sure they know what was important to you and why.” So pare your legacy down to a few meaningful items, and explain the stories behind those things, she says.

Take pictures of items to be discarded, and display those on an electronic frame or in a scrapbook. Paxton recommends an app such as Artifcts, which allows you to make and share videos about items. For a more formal memory handoff, consider setting up a show-and-tell video call or an in-person gathering of loved ones, he suggests.

9. No "maybe" pile, no storage. Declutterers typically sort their things into "keep," "sell," "give" and "trash" categories. Don't add a "maybe" pile, says Mary Kay Buysse, co-executive director of the National Association of Senior & Specialty Move Managers. "The 'maybe pile' is going to do you in, because that is what goes in storage units," she says. By renting a storage unit, you can end up paying thousands of dollars to store things you aren't even sure you want.

10. Avoid re-cluttering. Set up ongoing systems. Sgrott helps clients create labeled baskets, bins or shelves so everyone in the house knows where, say, shoes, batteries or charging wires go.

While many declutterers try to maintain practices such as "one in, one out" for any new possessions, T.K. Coleman, cohost of the Minimalist podcast, suggests a psychological approach. "I want to understand why I am in this position," says Coleman.

He asks, for example, "Am I using impulse purchases to compensate for loneliness?" Coleman tries to remind himself that "saying 'yes' to something you don't want is saying 'no' to something else," such as a clean table and a calm mind.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Every summer, Americans fall in love, but not with a person — they fall in love with a piece of property and the idea of planting roots in a vacation spot.

The problem with falling in love with vacation property is that even when a vacation home feels like freedom, it can easily turn into a financial anchor.

Before you buy that second home, run the real math instead of the Instagram version that tells everyone they should have a picture-perfect home away from home.

Is that vacation home worth the cost? The answer is different for each individual, but there are some things that everyone should understand before considering a vacation home purchase.

Ownership can cost more than buyers expect

Mortgages for second homes can be considered riskier by lenders, so they typically carry higher interest rates and fees. If you're expecting similar interest rates on a vacation home with what you see advertised for primary home loans, you're likely in for an unpleasant surprise.

Beyond the mortgage, second homes can have property taxes that are higher than the those on your primary home, not just because of location, but because the vacation home doesn't qualify for a potential exemption as a primary residence.

Add increased insurance premiums (especially in coastal states) and the price of upkeep, and the costs can quickly add up.

Buying a vacation home can be right for some people, but it's important to go into the process with a realistic view of the expenses associated with owning a second home.

Rental dreams vs regulation nightmares

If you think the solution to the extra costs of vacation home ownership is to become an Airbnb host, you might want to reconsider. Cities are cracking down on short-term rentals.

Some cities, such as Washington, D.C., have put strict licensing requirements in place for all short-term rentals. Others, such as New York City, generally prohibit short-term rentals unless the host is present.

Why? Short-term rentals can drive up rental prices in neighborhoods as the number of available long-term rentals decrease. It can become more difficult to buy a home as the inventory dwindles.

Some communities have sounded the alarm on short-term rentals when they feel their cozy neighborhood has become infiltrated by short-term renters who aren't invested in the community. It's a shift that makes them uncomfortable and has led communities to urge regulation or outright bans.

Before assuming that you can use your vacation home as a short-term rental to solve the problem of extra fees, research regulations in the area associated with short-term rentals.

The results might surprise you and could sway you from the idea altogether, or they might reveal that renting the home out short-term will be favorable.

Renting gives flexibility (and less risk)

On the other side of the short-term rental issue is the idea of long-term rentals, in which renters sign a lease and reside within the home.

• The upside is the income potential from rent and real estate appreciation
• The downside is that the home is occupied by tenants, so you can no longer treat it as a vacation home that you can visit and stay in on a whim

Timing the leases right can be a solution for long-term rentals. Suppose your plan is to eventually retire to your vacation home; you'll time the lease to expire adjacent to your retirement so you can make the joyful transition to your vacation home as your primary residence.

Long-term rentals typically need less monitoring and maintenance since the residents will likely have more pride in where they live as opposed to a weekend stay.

That's not to say that rental homes need no management whatsoever, but rather that long-term rentals don't need the same rapid-fire maintenance and upkeep as a short-term rental, as when different people are frequently coming and going.

If you buy, buy smart and treat it like a business

If the numbers work, and you decide that being a landlord of either a long-term or short-term rental makes sense for you, structure it wisely.

• Explore liability protection strategies, such as an LLC or umbrella insurance. Much as you would do with a business, don't personally assume the liability risk of renting a home.
• Track every deductible expense. There are tax deductions available to landlords, but only if you properly track your expenses.
• Consult your adviser if you plan to sell later. Your adviser can help you determine if the property will be eligible for depreciation benefits and a 1031 exchange.

A vacation home that becomes an investment property can be lucrative, but it's not something you should do on a whim.

The same due diligence you'd do with any investment to ensure it works with your budget and goals is vital. A vacation home shouldn't be an impulse buy.

Emotional ROI still matters

Return on investment (ROI) isn't only about numbers and tax deductions. It's also about reaching goals and living a life you've dreamed about.

Remember, however, that renting can give you the same sunsets as buying. Be realistic about what you're getting yourself into, and don't romanticize a vacation home as a dream purchase when you might actually be buying a bunch of maintenance obligations.

If owning a vacation home has always appealed, but the idea of managing a rental property doesn't, there's nothing wrong with buying a vacation home simply because it makes you and your family happy.

If the numbers work with your budget and you're realistic about the expenses, a vacation home can certainly bring joy. A conversation with your adviser can help you decide if you're ready for a vacation home and what that might look like for you.

Related Content

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• How to Design a Second Home That Generates Rental Income
• RV Living or Vacation Home? What's Best for Your Retirement?
• To Love, Honor and to Pay: 4 Ways to Keep Wedding Costs from Ruining Wedded Bliss
• 5 Legal 'Loopholes' the IRS Wishes You Didn't Know (Plus, How to Use Them This Tax Season and Beyond)

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Each week in our Ask the Editor series, Joy Taylor, The Kiplinger Tax Letter editor, answers questions on topics submitted by readers. This week, she's looking at five tax questions for landlords who own residential rental property. (Get a free issue of The Kiplinger Tax Letter or subscribe.)

1. Taxes if you sell rental property

Question: I own a condo that I have been renting out to tenants for over 20 years. I plan to sell the condo this year. Will I qualify for the home sale exclusion?

Joy Taylor: Unfortunately, it doesn't sound like you will qualify for this break. Homeowners who own and use their home as their principal residence for at least two out of the five years before selling it get to exclude $250,000 of the gain when they sell. The gain exclusion is $500,000 for married couples who file a joint return.

Since you have owned the condo as rental property and not your primary residence, you would not qualify for the home sale gain exclusion. The gain or loss when you sell would generally be characterized as capital gain or loss. And, since you owned the condo for more than one year, it's considered a long-term capital gain or loss.

The capital gain will generally be taxed at 0%, 15%, or 20% — plus the 3.8% net investment income tax (NIIT) for people with higher incomes. However, a special rule applies to gain on the sale of rental property for which you took depreciation deductions.

When depreciable real property held for more than one year is sold at a gain, the federal tax law requires that previously deducted depreciation be recaptured into income and taxed at a top rate of 25%. This is known as unrecaptured Section 1250 gain, the number of its federal tax code section.

2. Inheriting rental property and taxes

Question: I own rental property. When I die, I plan to leave it to my child. Does he get a step up in basis in the property upon my death? Also, what happens to the depreciation that I had previously deducted on the property?

Joy Taylor: The answer to your first question is yes, your beneficiary would take a stepped-up tax basis in the rental property when you die. That means your child's basis in the inherited property would be its fair market value on the date of your death.

I haven't looked at the depreciation issue before, but it is my impression that your depreciation essentially disappears when you die. Again, your beneficiary takes a stepped-up tax basis in the property. If he decides to keep renting the property, he would depreciate it over 27.5 years, beginning in the year he inherited it and using the stepped-up tax basis.

3. The net investment income tax for landlords

Question: I own a triplex, and I rent out all three apartments in the building. I am thinking of selling the property in the next year or so. I know I will pay capital gains tax on the sale. Will I also have to pay the 3.8% net investment income tax?

Joy Taylor: Maybe. The additional 3.8% net investment income (NII) tax applies to single filers with modified adjusted gross income (AGI) over $200,000 and to joint filers with modified AGI above $250,000. The modified AGI threshold is $125,000 for married people filing separate tax returns. These modified AGI amounts aren’t inflation-indexed, leading to more filers paying the NII tax each year.

The NII tax, which is added to the regular income tax, is due on the smaller of NII or the excess of modified AGI over the threshold amounts. NII includes dividends, capital gains, taxable interest, annuities, royalties, passive rents and certain income from other passive activities.

4. Selling a rental that you previously lived in

Question: I own a home that I lived in from 2014 to 2017. I then married and moved into my wife's new home. I rented out my old home from 2017 until now. I plan to sell it this year. How do I establish my tax basis for purposes of determining gain or loss when I sell?

Joy Taylor: Your tax basis in the rental home is as follows: (1) the lesser of your original cost or fair market value of the home at the time you started renting it, plus (2) the cost of improvements to the home, less (3) depreciation taken on the home. IRS Publication 544, Sales and Other Dispositions of Assets, has more information.

5. Selling a duplex

Question: My wife and I own a duplex. We live in the upstairs unit, and a tenant lives in the downstairs unit. The upstairs and downstairs units each have separate addresses. We are now considering selling the full duplex. Can we take the full $500,000 home-sale exclusion when we sell?

Joy Taylor: The up-to-$500,000 gain exclusion applies only to the portion of your duplex that you used for residential purposes (not rental or business purposes). Below is relevant language from IRS Publication 523, Selling Your Home:

"You generally can’t exclude gain on the separate portion of your property used for business or to produce rental income. Examples are: (1) a working farm on which your house was located, (2) a duplex in which you lived in one unit and rented the other, or (3) a store building with an upstairs apartment in which you lived."

"[A]n allocation of the gain is required. For this purpose, you must allocate the basis of the property and the amount realized between the residential and nonresidential portions of the property using the same method of allocation that you used to determine depreciation adjustments. Report the sale of the business or rental part on [IRS] Form 4797."

About Ask the Editor, Tax Edition

Subscribers of The Kiplinger Tax Letter, The Kiplinger Letter and The Kiplinger Retirement Report can ask Joy questions about tax topics. You'll find full details of how to submit questions in each publication. Subscribe to The Kiplinger Tax Letter, The Kiplinger Letter or The Kiplinger Retirement Report.

We have already received many questions from readers on topics related to tax changes in the One Big Beautiful Bill, retirement accounts and more. We will continue to answer these in future Ask the Editor roundups. So keep those questions coming!

Not all questions submitted will be published, and some may be condensed and/or combined with other similar questions and answers, as required editorially. The answers provided by our editors and experts, in this Q&A series, are for general informational purposes only. While we take reasonable precautions to ensure we provide accurate answers to your questions, this information does not, and is not intended to, constitute independent financial, legal, or tax advice. You should not act, or refrain from acting, based on any information provided in this feature. You should consult with a financial or tax advisor regarding any questions you may have in relation to the matters discussed in this article.

More Reader Questions Answered

• All Ask the Editor Q&As
• Ask the Editor: Will I be Audited by the IRS?
• Ask the Editor: Questions on Residential Rental Property
• Ask the Editor: 10-Year Rule for Inherited IRAs
• Ask the Editor: Tax Questions on Roth IRA Conversions
• Ask the Editor: Reader Questions on QCDs

Case Study Scenario: We're 63, have $1.6 million, and own a $1.1 million beachside vacation house that we usually rent out during the summer for $2,000 a week. A recent zoning change has made short-term renting impossible for our property. That income is a key piece of our retirement plan. Should we sell the property or convert it to a long-term rental, where someone would live in the house year-round?

Platforms like Airbnb and VRBO have long enabled people with second homes to get the best of both worlds — short-term rental income and a place to vacation themselves. But the prevalence of these short-term rentals has caused a growing number of cities to crack down.

In New York City, property owners and tenants alike are barred from renting out an entire apartment or home for fewer than 30 days. San Francisco, Los Angeles, and Las Vegas also have restrictive rules.

In New Jersey, where beach tourism is huge during the summer months, many municipalities have rules that cap short-term rentals to prevent excessive noise and overcrowding. And given that many beach house owners buy their homes for peace and relaxation, it won't be surprising to see more towns across the U.S. get stricter in the coming years.

That could create problems for property owners who rely on short-term rental income, though.

That's what's happening to the couple in our case study, Brian and Sally. They are a 63-year-old couple with a $1.1 million beach home that normally commands $2,000 a week during the peak summer season. In the absence of that rental income, they're not sure they can afford to keep the home, as they need the money to support their overall lifestyle.

Here's what the experts have to say about their conundrum.

The zoning update changes the equation

If you've owned your beach house for years, it's not just any old asset. Unloading that beach house isn't the same as selling an underperforming stock.

Still, you need to think carefully about whether it makes sense to keep the beach home, says

Stacy Brown, VP of Property Management Enablement at Real Property Management, a Neighborly company.

"At 63, this is no longer simply a vacation property decision," she says. "It is a retirement stability decision."

As Brown explains, many people purchase beach or vacation properties with a hybrid mindset. For Brian and Sally, that second home may be a lifestyle choice and legacy asset as much as it is an income producer.

At this point, though, Brown says, "If the summer rental income was a meaningful part of your retirement planning, the first step is to remove emotion from the analysis and evaluate whether the property still performs the function it was intended to serve."

Converting to a long-term rental could be a mixed bag

Since renting out the beach house on a short-term basis is no longer viable, your next logical move may be to see if you can make it work as a long-term rental.

Brown says, "Converting the home into a long-term rental may absolutely make sense if the property still cash flows comfortably, there's strong demand for long-term rentals in your market, you're comfortable with someone living in the home all year, you want to continue to benefit from the appreciation potential of the home, and the operational demands of a long-term rental still align with your lifestyle."

As Brown explains, there are several advantages to having a long-term rental, including predictable monthly income and lower turnover costs. Also, she points out that you won't have to keep track of and store inventory, such as paper products, that you'd normally provide to short-term renters. And, she says, your marketing expenses will be lower.

But there are also some tradeoffs.

"A home that once felt like yours can begin to feel fully occupied by someone else’s life," Brown says. "Long-term rentals create a very different ownership experience than seasonal vacation use. There is increased wear and tear, less flexibility for personal use, and, depending on the state, additional compliance."

Also, a long-term rental may not command the same income on an annual basis as a short-term rental that capitalizes on a peak rental season. If you'd normally get $2,000 a week for 10 or 12 weeks, that's $20,000 to $24,000 a year. You may want to talk to a local real estate agent to see what's realistic on a yearly basis, as that could help inform your decision.

If you do decide to make the home a long-term rental, there could be an added bonus. If the long-term rental doesn't work out, you may be able to do a 1031 exchange, in which you sell the beach house and roll the proceeds into another real estate investment. That could help you avoid an immediate tax bill (though you might face one eventually).

Does the rental belong in your investment portfolio at all?

While converting your short-term rental to a long-term rental allows you to keep the home, you'll need to consider whether that's worth doing if your usage of it will be limited. And from an investment perspective, it may not make sense to tie up so much of your money in a single asset.

As Evan Mills, associate financial adviser at Scholar Advising, explains, keeping the home could be risky.

"You have a $1.6 million portfolio and a $1.1 million beach house, so you're looking at almost half of your total wealth sitting in one concentrated area," he says. "On top of that, depending on where it is, you're worrying about floods, hurricanes, any type of damage that could set you back a fair amount of money."

A portfolio of stocks and bonds could lose value based on market conditions. But that's not the same thing as having to spend money to fix a failing roof or bear the cost of rising homeowners insurance premiums and property taxes.

Mills does point out that a long-term rental provides more stable income than a short-term rental. However, he says, "Now you're looking at wear and tear with somebody in there year-round, management fees, what they cover versus what you cover, insurance, [and] a lot of fees that pile on top of something you're never going to get to enjoy."

Or, to put it even more bluntly, "You're giving up the lifestyle piece entirely and taking on a whole different set of headaches for a yield that may not justify it."

Brown points out that coastal properties in particular carry added risk. There's insurance pressure and climate-related risk.

Between 2019 and 2024, homeowners insurance premiums rose 3% nationally but by 25% or more in southern coastal areas, according to the U.S. Government Accountability Office.

"Those are not emotional considerations," says Brown. "They are operational and financial realities."

If you do decide to unload the beach house, though, you'll need to keep a couple of things in mind.

First, since it's not a primary residence, you won't benefit from a capital gains exclusion on the sale. If the home has gained a lot of value since you bought it, you could have a large IRS bill on your hands. You may also be looking at depreciation recapture.

It's a matter of priority and honesty

Ultimately, keeping your beach home could still make financial sense if the rental income you generate exceeds your operating expenses and is meaningful to your retirement plan. But you'll need to be honest with yourself as to whether you view the rental property as a retirement income source or as a lifestyle asset.

"Sometimes," says Brown, "The right answer is, 'we can afford to keep this because it brings us joy.' And other times the answer is, 'this asset no longer aligns with the retirement we actually want.'"

Neither answer is wrong, Brown insists.

"The mistake would be avoiding the conversation because the property carries emotional value," Brown says. "The strongest long-term investors are not the ones who never change strategy. They are the ones willing to reassess even the assets they love when the environment around them changes."

Read More

• We're 62 With $1.4 Million. I Want to Sell Our Beach House to Retire Now, But My Wife Wants to Keep It and Work Until 70.
• I Want to Buy a Vacation Home. I'm 65 and Have $3 Million Saved. Am I Crazy?
• The True Cost of Owning a Second Home: What to Consider Before You Buy A Vacation Home

As investors reassess real estate strategies in a higher-rate environment, some are turning to oil and gas mineral rights as a fully passive, tax-efficient alternative to owning and operating property.

I'm one of them. Here's why.

The exchange treadmill

Every real estate investor knows the cycle:

• Buy a property
• Operate it
• Sell it
• Roll the gain and the depreciation recapture into another property through a 1031 exchange
• Do it again

It works … until you realize you've been on a treadmill for 20 years.

Every exchange puts you back into another operating asset:

• More tenants
• More employees
• More vendors
• More capital calls
• More risk

Operating properties isn't for the faint of heart. It's not passive income; it's work.

Mineral rights get you off the treadmill.

What you're buying

Oil and gas mineral rights are a deeded title to everything below the surface. You own it the same way you own a piece of dirt — with a deed, recorded in the county.

Companies drill on your minerals and pay you a net royalty, typically 20% to 25% of revenue. It's not profit; It's revenue.

• No operating costs
• No capital calls
• No profit and loss risk
• No insurance
• No property management

When they're drilling $100 oil, you're getting $25 a barrel with no work.

Here's what most people miss: When they find more production — a new formation, a new drilling technique, more wells per section — you get all of it. If they go from one well per 640 acres to four to 10, you participate in every barrel. Everyone else does the work. You hold the deed.

Why now?

Three things are converging.

The capital stacks are broken. More than $600 billion of multifamily debt matured across 2024 and 2025. Borrowers who underwrote at 3% floating rates are staring at 7% refinance quotes. Values are down 20% to 30% in major markets.

The thing you'd normally exchange into — operating real estate — is harder to underwrite today than at any point in the last 15 years.

Energy production is at record levels. The U.S. is producing more than 13 million barrels a day. Natural gas demand is accelerating — driven by AI infrastructure, data centers and a power grid that can't keep up.

The drilling activity that generates your royalty checks isn't slowing down.

The tax treatment hasn't changed. Mineral rights qualify as like-kind property under Section 1031. You can exchange directly from a condo project, a multifamily asset or any investment real estate into minerals. Defer the gain, defer the recapture. then never exchange again.

That last part is the point. The 1031 is designed to keep you in the game. Minerals let you use it one last time — and step off.

The tax math

Royalty income gets the percentage depletion allowance — 15% of gross income, deducted off the top, regardless of your cost basis. That's not depreciation. Depreciation requires basis and runs out. Depletion doesn't. It shelters income for as long as the minerals produce.

Then there's the estate play. You hold the minerals. You collect income. When you die, your heirs receive a stepped-up basis.

All the gain and recapture you deferred through exchanges is wiped out. Instead, they inherit at fair market value and can sell at par without paying tax on decades of deferred gain.

None of this is tax-free; it's tax-deferred. But defer through your death and let your heirs get the step-up, and the practical result is the same.

How it fits

I think about portfolio construction in layers:

• Distressed debt for high current yield
• High cap rate real estate for depreciation
• Development projects for internal rate of return (IRR)
• Minerals to satisfy the exchanges and get off the treadmill

Each layer does a different job. Minerals are the anchor — the asset you never sell: monthly income; no operating burden; tax-sheltered through depletion; and a clean basis for the next generation.

You're exposed to commodity prices. If oil drops to $60, your checks shrink. That's real. But there's no debt service, no operating costs and no capital calls on the other side. The downside is a smaller check, not a margin call.

Compare that with the operator sitting on floating-rate bridge debt with a rent roll that came in 8% light and a lender who won't extend. That's the kind of risk that wipes out equity.

The bottom line

Operating real estate builds wealth. I've spent my career doing it. But the 1031 treadmill keeps you locked into that cycle, whether the market rewards it or not.

Minerals are the exit ramp:

• Deeded ownership
• Monthly income
• No operations
• A tax structure that lets you defer until you die and pass it clean to your kids

In a market in which the capital stacks are broken and the next direct buying window is still years away, that's not a bad place to sit.

Related Content

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• 5 Mistakes to Avoid in Oil and Gas Investing (Plus, 6 Ways to Stay Focused)
• Tax Advantages of Oil and Gas Investments: What You Need to Know
• 5 Best Commodity ETFs to Buy Now
• 10 Things You Should Know About REITS

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Dear Wealth Wise: We live in New England in a mortgage-free home. I'm 63, and my husband is 65. I collect Social Security Disability and a pension. My husband still works and owns a rental property in Arizona with a $75,000 mortgage at 3.9%. The house is worth $340,000.

Between my benefits, my pension, and our annuities, we hope to have enough retirement income to manage without the additional income from the house. But we are concerned that inflation will make that more difficult over time. We currently clear $700 a month after expenses on the rental, barring extra repairs.

My husband wants to retire at 68. In light of that, should we keep the rental or sell it? We're worried about capital gains, real estate agent fees — and how those things might result in IRMAAs.
— Landlord No More?

Dear "Landlord No More?"

You'll often hear that it's wise to have diversified income streams in retirement. But what if one of those income streams comes with a world of risk and hassle?

In this situation, our reader asks a particularly savvy question. The couple wonders whether it pays to hang on to a rental property on the other side of the country. The rental income could clearly help with cash flow. But managing a rental isn't easy, especially when you don't live close by. Keeping a rental home means bearing the risk of property tax and home insurance rate increases, as well as ongoing maintenance and repairs.

Clearly, it's a tough decision — especially since selling the home could trigger a large capital gains tax bill. There's a capital gains exclusion of up to $250,000 per person for the sale of a primary residence. But because the couple is contemplating selling a rental property, that exclusion won't apply. A jump in their income could also trigger an IRMAA surcharge on Medicare. Real estate agent fees will take a bit out of the sale proceeds.

Here's how the experts suggest they approach this conundrum.

How well will your current income sources hold up over time?

The couple in this scenario has a few things going for them. Though they don't mention retirement savings, they have a variety of guaranteed income streams. But that might not cut it in the long run.

"Hoping to have enough income in retirement is not a winning strategy," says Nate Willardson, CFP and managing partner at Currents Wealth Strategies. "Before deciding whether to sell or keep the Arizona property, stress-test your income sources against different inflationary environments to understand what could happen to your purchasing power over time."

As Willardson explains, Social Security benefits, including Social Security Disability Insurance, are eligible for a cost-of-living adjustment each year. But pensions and annuities are often fixed, which means they can lose purchasing power over time. If you're not confident in your future cash flow, says Willardson, it might be worth holding on to the rental.

Andrew Wood, RICP and retirement planning adviser at Daniel A. White & Associates, agrees.

"I like the idea of keeping the Arizona house and using the income as an inflation hedge," Wood says. "If prices and rents continue to rise, you would be able to use the income to help offset inflation and potentially raise the rent accordingly."

Do you want to be a landlord?

Clearly, there's a benefit to keeping the rental property despite the costs of ownership. But Cayden McLaughlin, CFP, EA, and financial planner at WealthAdvisor365, says in his view, this is also a quality-of-life question.

"Do you even want to be an out-of-state landlord in retirement? Is that really how you envisioned spending those years? Most people say no," says McLaughlin. "An extra $700 a month probably isn't worth the hassle of coordinating repairs from across the country every time something breaks."

Willardson says that in his experience, most retirees prefer simplicity when it comes to their portfolios.

"Selling and reinvesting those assets for growth elsewhere is often the cleaner path," he explains.

McLaughlin says that if you do sell the property, you can invest the proceeds in equities for longer-term growth. You should still come away with a nice chunk of money, even after accounting for taxes and real estate agent fees.

"If they truly want income replacement, Treasury bonds may be worth considering," McLaughlin adds.

There might be a compromise — keeping the rental but hiring a property manager.

"If you want to hold the property but shed the administrative burden, a local property manager costs roughly 8% to 10% of monthly rent and buys you real peace of mind from 2,000 miles away," Willardson says.

That option would also lessen the risk that the couple might be unable to manage the property effectively as they age.

If you decide to sell, get your timing right

You're right to be worried about a large capital gains tax bill on a home you have $265,000 worth of equity in. But if the burden of managing that rental property from afar is too great and you're worried about future maintenance and repair costs, then selling could be the right choice.

In that case, Willardson says, "if you do sell, time it strategically. A lower-income year can reduce both capital gains exposure and the IRMAA impact on your Medicare premiums."

Since your husband still works now, you might want to wait until he retires to unload that property, especially if you can do so before he claims Social Security. You might still face an IRMAA, as the house sale will likely bump up your taxable income in a single year. But you can mitigate the overall tax impact by waiting until your household income drops.

That said, don't let the idea of an IRMAA drive you into a panic. Even if you face that surcharge, it might only apply for one year, Wood explains. From there, you can implement different strategies to minimize your taxable income. Municipal bonds, for example, are a good way to generate predictable income that's always federally tax-exempt.

The decision: It depends

All told, you have two very strong options here. There's no right or wrong answer.

"On its face, the rental property could be a solid source of supplemental income in retirement," McLaughlin says. "The interest rate is low, there's plenty of equity, and the husband is still working for a few more years, which can help pay down the remaining mortgage balance."

But if you just don't have the appetite to manage a rental property and bear the risk of rising ownership expenses, selling isn't the wrong move. You might feel the sting initially in the form of a larger one-time tax bill and potential Medicare IRMAA. But from there, you might enjoy the peace of mind that comes with knowing you're earning income more passively.

Not all questions submitted will be published, and some may be condensed and/or combined with other similar questions and answers, as required editorially. The answers provided by our writers and experts, in this advice column, are for general informational purposes only. While we take reasonable precautions to ensure we provide accurate answers to your questions, this information does not and is not intended to constitute independent financial, legal, or tax advice. You should not act, or refrain from acting, based on any information provided in this feature. You should consult with a financial adviser regarding any questions you may have in relation to the matters discussed in this article.

Read More

• Is $3.2 Million Enough to Retire in an Expensive College Town?
• Wealth Wise: Should We Downsize or Drain Our 401(k) to Pay Off Our Home?
• Wealth Wise: Should We Borrow Money From Our Elderly Father?
• A Cautionary Tale: Why Older Adults Should Think Twice About Being Landlords

There’s a certain point every year when your home can feel as if it’s bursting at the seams. Holiday decorations are stacked in corners, patio furniture and cushions are coming back out for the season, and somehow the closets that just felt organized are full again.

That’s when a storage unit can feel like the perfect solution. It’s quick, convenient and creates extra space without forcing you to decide what to keep, donate or throw away. But storage isn’t as simple as packing things away and forgetting about them.

What you put in a storage unit still matters. Some items won’t hold up over time, especially in spaces without climate control. Others can attract pests, create safety hazards or even violate storage facility rules. Before you start boxing things up, it’s worth knowing what should stay out of storage altogether.

Storage units feel like an easy fix for clutter

But not everything belongs in storage. Not every item you box up will come out in the same condition, or even be allowed in the first place. Storage facilities often have rules about what tenants can keep inside, and even items that aren't prohibited can deteriorate over time due to temperature swings, humidity, pests or neglect.

That means that what starts as a smart decluttering project can turn into an expensive mistake. Before you stash something away for months or years, it's worth considering whether it will survive storage.

When we asked readers of our A Step Ahead newsletter what they're keeping in storage, the answers ranged from quirky collectibles to treasured family keepsakes. Readers reported storing everything from beer can collections and rocket-launching tubes to antique spinning wheels, oversize stuffed animals and a baby doll buggy that has been in the family since 1945.

Those responses highlight an important reality: Storage units often become homes for the items we value most, whether they're collectibles, family heirlooms or pieces of personal history. That's why it's especially important to know which belongings are at risk of damage and which items might not belong in storage at all.

Here are 10 items that don't belong in storage and why keeping them there could cost you.

1. Perishable food and pantry items

Food might seem harmless, but it's one of the quickest ways to create problems inside a storage unit. Pantry staples, pet food, even unopened snacks can attract rodents and insects. Once pests find a food source, they often spread beyond the food itself, damaging boxes, fabrics, furniture and other stored belongings.

Food can also spoil over time, creating unpleasant odors and increasing the risk of contamination, so many storage facilities prohibit food storage altogether.

2. Hazardous or flammable materials

Items such as gasoline, propane tanks, paint, cleaning chemicals and fireworks are almost always prohibited in storage units, and for good reason. These materials can leak, ignite or create hazardous fumes, posing serious safety and fire risks.

Even if nothing goes wrong, storing prohibited materials could violate your rental agreement and lead to penalties or the loss of your unit. As a general rule, if an item is flammable, combustible or corrosive, it shouldn't be placed in a storage unit.

3. Important documents and sentimental items

It's tempting to store paperwork or keepsakes you don't use often, but a storage unit isn't the best place for anything that's difficult or impossible to replace.

Birth certificates, Social Security cards, financial records and family heirlooms can all be damaged by moisture, fire or theft. Even well-maintained facilities can't eliminate those risks entirely.

For items with significant financial, legal or sentimental value, consider storing them in a fireproof safe at home or a bank safe-deposit box instead.

4. Electronics (without climate control)

Electronics don't handle extreme temperatures or humidity well. Heat can warp internal components, while moisture can lead to condensation, corrosion and permanent damage. That old laptop, TV or gaming console you're trying to save for later might not work when you retrieve it, especially if it's been sitting in a non-climate-controlled unit for months or years.

If you need to store electronics, consider renting a climate-controlled unit. These units maintain a more consistent temperature and humidity level throughout the year, helping protect sensitive components from heat, cold and moisture.

It's also a good idea to pack electronics in their original boxes when possible or use sturdy containers with padding to protect them from dust, impact and shifting during storage. Before putting devices away, remove batteries, back up important data and cover equipment with breathable materials rather than plastic, which can trap moisture.

5. Clothing and fabrics

Clothing, linens and upholstered items can quickly fall victim to mold, mildew and pests when stored improperly. In humid conditions, fabrics absorb moisture and develop musty odors or visible mold growth. In drier environments, natural fibers can become brittle, while insects such as moths might damage clothing and textiles.

If you need to store fabrics, make sure everything is clean and completely dry before packing it away. Use breathable garment bags for clothing, acid-free boxes for delicate textiles and sturdy plastic bins with tight-fitting lids for items that need extra protection from pests.

For valuable garments, consider using a wardrobe box that allows clothing to remain hanging and wrinkle-free. Climate-controlled storage can also help protect fabrics from temperature and humidity fluctuations.

Without proper preparation, the clothes, linens and upholstered items you store today might not be in usable condition when you retrieve them months or years later.

6. Wine and alcohol

Wine is particularly sensitive to temperature fluctuations and prolonged exposure to heat. When stored improperly, corks can dry out and shrink, allowing air to enter the bottle and spoil the wine. Excessive heat can accelerate the aging process, alter flavors and, in some cases, permanently damage the contents. Even short periods of exposure to extreme temperatures can affect quality.

If you have a wine collection, consider storing it in a wine refrigerator or another temperature-controlled environment designed for long-term preservation. Ideally, wine should be kept at a consistent temperature with moderate humidity and minimal exposure to light or vibration.

While some storage facilities offer climate-controlled units or specialized wine storage options, a standard storage unit is rarely the best choice for protecting a valuable collection.

7. Tires and unregistered vehicles

Some storage facilities allow vehicles, but often with strict requirements. Unregistered vehicles, leaking fluids and improperly stored tires can create safety, environmental and fire hazards. Tires, in particular, can degrade over time when exposed to fluctuating temperatures and might be restricted by some facilities due to disposal and safety concerns.

Before storing a vehicle or extra tires, review your facility's policies carefully. Many sites offer dedicated vehicle storage for cars, motorcycles, boats, RVs and ATVs, either in outdoor parking spaces or enclosed units.

These specialized storage options might provide additional security, protection from the elements and features such as battery maintenance or climate control. Choosing the right type of storage can help protect your property and prevent costly damage while it's not in use.

8. Live plants or animals

This might sound obvious, but it still happens. Storage units aren’t designed for living things. They lack ventilation, light and consistent temperatures.

These are conditions that can quickly become fatal for plants or animals. In addition to ethical concerns, this can also create sanitation issues and attract pests.

9. Wet or damp items

One of the most common, and costly, storage mistakes is putting items away before they’re completely dry.

That includes:

• Carpets or area rugs cleaned right before moving
• Recently used outdoor gear
• Appliances such as mini fridges or coolers
• Boxes packed during a rainy move

Moisture trapped in a sealed space creates the perfect environment for mold to grow. Once it starts, it spreads quickly. One damp item can ruin an entire unit.

10. Anything extremely valuable or irreplaceable

Even in a secure facility, storage units aren't immune to theft, fire, water damage or natural disasters. If an item has significant financial or sentimental value, think carefully before storing it off-site.

Insurance could help cover some losses, but coverage limits, exclusions and deductibles can leave you paying out of pocket. For many heirlooms, collectibles and family keepsakes, replacement simply isn't possible. When possible, keep valuable items in a location where you can monitor and protect them more closely.

If you choose to store high-value belongings, create a detailed inventory, take photos and keep records of their condition and estimated value. You might also want to review your homeowner, renter or storage insurance coverage and consider additional protection for valuable collections.

The real cost of storing the wrong items

A storage unit might seem as if it's a modest monthly expense, but the costs can add up quickly over time. Depending on the size, location and amenities, you could pay anywhere from $75 to $200 a month, or roughly $900 to $2,400 a year. Add-ons such as insurance, climate control and administrative fees can push that total even higher.

The bigger risk is paying to store items that lose value while they're sitting there. Moisture, temperature fluctuations and pests can damage belongings, turning a storage solution into an expensive replacement project.

Before signing a lease, consider whether the items you're storing are worth the ongoing cost and whether they'll still be in good condition when you need them again. Storage units can absolutely help you stay organized and create breathing room at home. But they’re not a catch-all solution.

Before you pack something away, ask yourself a simple question: Will this item hold up in a dark, enclosed space for months at a time?

If the answer is no, or even maybe, it’s worth finding a better option.

Related Content:

• Things to Know About Decluttering
• 10 Items That Actually Belong in a Storage Unit
• Tips to Declutter Your Home Before Your Retirement Move

As retirement approaches, you may be considering a move to a college or university town. Whether you want to retire near your old alma mater or are considering a different college town, you know the allure. These areas often have a high quality of life, with good walkability, attractive architecture, great restaurants and of course, access to a vibrant community.

Buying a home in a college town you love could work out well if you can swing it based on current property values. Your analysis will need to go beyond home values, however, as property taxes, access to healthcare and other considerations may prove just as important.

Here's how a financial professional and a couple of real estate experts suggest you approach the decision. We include a case study of a couple with a $3.2 million portfolio.

A home in a college town could be a great investment

The first retirement home you buy isn't guaranteed to be your forever home for that stage of life. You may decide that after a decade or so, you're tired of the bustle of a college town and would rather settle somewhere else. So it's important to make sure you're buying a home that can hold its value, especially if it's on the expensive side.

Blaz Korosec, licensed Realtor and founder/CFO of the real estate solutions company Investorade, says that generally speaking, homes in college towns tend to be smart investments.

"College town real estate appreciates or at least maintains value better than your standard market due to institutional employment influencing housing demand," he says.

As Korosec explains, universities typically employ thousands of faculty and staff. And students perpetually need housing, too.

"Even when the rest of your regional economy sputters, dormitories stay filled and the local university employer keeps raising wages," he says.

Cody Schuiteboer is the president and CEO of mortgage firm Best Interest Financial, and he agrees that, from a property-value standpoint, college towns are a strong bet.

"College towns represent one of the most stable residential markets in the country," he says.

And while you may be wondering whether high turnover could affect home price appreciation, Schuiteboer says that's not much of a concern.

"Students tend to concentrate heavily only in blocks closest to campus itself, typically within a three- to five-block radius, where increased noise, heavier demand for parking space, and accelerated wear can create problems for owners," he explains. "Other than that, college town markets tend to function in a very similar fashion to any other established residential market, with the added benefit of a university economic anchor in place."

That said, colleges commonly own large amounts of tax-exempt land. This often forces municipalities to levy significantly higher property taxes on residential homeowners to fund public services, which may mean your ownership costs are high.

Plus, if the value of your home is tied to a nearby college that ends up closing, your property value could fall. That may not be a huge problem if you don't want to sell it, but it's something to be aware of.

We break down the numbers for a $3.2 million nest egg

Let's run the numbers for an imaginary couple in their 60s, Jenny and Adam. They met as students at the University of Michigan in Ann Arbor in the 1980s and have a $3.2 million nest egg. They want to retire near the University. With that amount of savings, they certainly have decent purchasing power. But whether the numbers work depends on Ann Arbor's home prices and their personal priorities.

"A $3.2M portfolio may support drastically different standards of living in different towns," Schuiteboer says. "What makes this decision work is largely a factor of choosing the right college town in terms of property tax rate and cost of owning and maintaining the property there, among other things."

Schuiteboer also cautions that it's important to factor in maintenance and homeowners insurance when running your numbers. And, he says, be prepared for property taxes to be on the higher side.

"Retirees frequently underestimate the costs involved in owning and maintaining a home in an expensive college town, primarily due to the fact that the property tax rates there are significantly higher than elsewhere," he says.

Jim DesRocher, Founder at TrueView Financial, also cautions that while $3.2 million is a strong starting point, "your balance is not your paycheck."

"At a sustainable 3% to 3.5% withdrawal rate, that portfolio produces roughly $96,000 to $112,000 per year before taxes," says DesRocher. "If you're moving to a high-cost area with property taxes of $15,000 to $25,000 per year plus elevated homeowner costs, you've consumed a significant share of that income before you've bought a single grocery."

The average home price in Ann Arbor, MI, for example, is $531,674, according to Zillow, which puts estimated property taxes for a typical Ann Arbor home at $7,922. But if we apply that same 1.49% tax rate to a $1 million Ann Arbor home, that's an annual property tax bill of $14,900, which could strain a portfolio producing $96,000 to $112,000 per year.

The good news is that some states are implementing property tax relief programs, including senior or homestead exemptions. That's something to look into if tax rates are high in the college town you're looking at.

As for maintenance, the rule of thumb is to set aside between 1% and 4% of your home's value per year. Older homes should lean more toward that upper number, but for the sake of our example, let's say that Adam and Jenny need to spend about 2% per year on maintenance. Here's how the numbers add up.

All told, Schuiteboer says, "The real question for this particular scenario is not whether the couple can afford the move, but whether their housing costs in the college town allow them the kind of retirement they really want to have."

As you conduct your own research, make sure to calculate the total cost of ownership and determine how much leeway it provides for your remaining expenses. If it'll mean skimping on travel and other experiences, it may not be worth it. But if you can swing a home in a town that holds a special place in your heart, you may be able to spend at least part of your retirement basking in nostalgia and enjoying a vibrant town that helps you stay young at heart.

College towns can be a great fit for retirees

It's true that college towns may cost more, both in home prices and property taxes, but they offer benefits that can lead to a healthier, happier retirement. For example, many colleges provide free or near-free college classes for seniors.

If you are an alumnus, you may also get free or reduced access to campus athletic facilities, concerts and even dining spaces. For example, Middlebury College alumni may receive an ID card that provides access to the athletic center and library, as well as discounted access to the school's Ralph Myhre golf course. Stanford offers a concierge service for alumnae seeking long-term care insurance,

Search online for your college name and "alumni benefits" to learn what may be available for you.

The healthcare paradox

Many college towns, such as Ann Arbor, Michigan, benefit from university research hospitals and cutting-edge specialists. While that means retirees may be able to access excellent care, there are some potential downsides to keep in mind.

First, wait times to see a specialist may be long because patients are attracted to the high-quality care. And given that the area population skews younger, there may not be as many geriatric specialists. Moreover, college towns in more rural areas often face a shortage of medical providers. For example, Cornell University is located in Tompkins County, New York, where a 2026 assessment found chronically long wait times and provider shortages.

Finally, retirees on Medicare Advantage plans, which may limit your choice of providers, may have difficulty finding a primary care physician (PCP) in their network, or one that is accepting new patients.

One solution is to see a network of doctors in the nearest metro city. For example, if you live in Northampton, Massachusetts (near Smith College, Amherst and UMass Amherst), you may elect to travel to Boston for medical appointments.

Will all those college students create noise and traffic?

When you think back on your college days, you may remember bustling weekends filled with sporting events and packed bars and restaurants at night. As a 21-year-old, that may be the epitome of fun. As 60-something retirees, the bustle of college town life could get old.

However, Korosec says it may not be a big problem.

"If you're thinking college towns equal crazy Saturdays during the football season and graduation, you’re only right for six to 10 days of the year," he says.

Korosec says you should anticipate congestion on weekends with home games. But for the remainder of the year, you might enjoy relative peace and quiet.

Schuiteboer feels similarly.

"There will always be days in college towns during which traffic will be particularly heavy," he says. But if you know which days to hunker down or perhaps take a trip out of town (think home games, move-in week, and graduation weekend), it probably won't impact your quality of life.

Since it's conceivably been a while since you've lived in the area, if you want to be really sure, Korosec says, "Take a stroll through potential neighborhoods on a Tuesday in October and Saturday during football season and see if you’d enjoy living there before making a decision."

Read More

• 5 Charming Small Towns Where America's Wealthy Retire
• Is a University Retirement Community for You?
• We're 62 and Plan to Sell Our $1.2 Million House to Retire, but Our Daughter and Grandkids Live With Us. My Wife Says We Should Stay. I'm Ready to Ask Them to Move.
• We're 62 With $1.4 Million. I Want to Sell Our Beach House to Retire Now, But My Wife Wants to Keep It and Work Until 70.

For first-time buyers and budget-conscious households, the 2026 housing market presents a significant challenge.

Last month, the U.S. Bureau of Labor Statistics reported an annual inflation rate of 3.8%, a surge that has trickled down to every facet of daily life, including groceries, healthcare, utilities, and — yes — even the housing market.

Currently, median home prices for new single-family homes are hovering around $412,000, according to Property Shark, with annual property tax bills hovering around $3,119 (though property taxes vary by locality).

But a handful of states tell a different story. In these locations, cost-of-living indices mostly remain below the national average, and median property tax bills are often under $1,500.

Are these lower costs enough to outpace inflation? To find out, we’ve ranked the top ten states with the lowest property tax bills in the U.S. by their affordability to see if 2026 is your year for a move.

States with the lowest property tax bills

Kiplinger used the latest data from Property Shark, sourced from the U.S. Census Bureau, to determine the ten lowest median property tax bills in the nation.

Then, median home values and household incomes were utilized to calculate the home price-to-income ratio for each state. This data point shows the average annual salary required to purchase a home in each state. For example, a ratio of 2.73 means that the average home price is roughly 2.7 times the state's average annual salary.

For our cost-of-living (COL) index, we utilized regional price parities (RFPs) from the U.S. Bureau of Economic Analysis (BEA). These figures represent a weighted average of prices for essential goods and services, including food, transportation, and healthcare.

On the BEA scale, 100 represents the national average. A score of 88, for instance, means the state is 12% cheaper than the national average, while a score of 102 indicates it is 2% more expensive.

Cost of living in states with low property taxes

The ranking below shows typical home values vs. average salaries in the states listed (as reflected in the home price-to-income ratio), along with daily living expenses such as grocery bills and local tax burdens.

While Kiplinger considered some qualitative factors, like job opportunities and weather, it's important to note that healthcare accessibility, education outcomes, political climate, and other considerations can influence reasons to live or move in a specific state and affect the amount needed for "affordable" living in that state.

Each individual's needs differ, so consult a tax professional or financial planner when necessary.

1. West Virginia: Low entry barrier for homeownership

Home price-to-income ratio: 2.73

Median property tax bill: $865

Cost-of-living (COL) index: 89.5

With a home price-to-income ratio of 2.73 according to Property Shark, West Virginia is the most affordable state on our list for homebuyers. Plus, a median property tax bill of $865 and a COL index 10.5 points below the national average secure the Mountain State's top spot.

• The trade-off: Job variety can be limited; West Virginia also has a relatively high state and local sales tax (which can reach 7% in some areas) and taxes most kinds of retirement benefits, but not Social Security benefits.
• Should you move? Remote workers and first-time buyers looking for maximum square footage for their dollar could win out. But if you need more amenities in less populated areas, you might reconsider West Virginia.

2. Mississippi: Cheap median home prices and cost of living

Home price-to-income ratio: 3.01

Median property tax bill: $1,215

Cost-of-living (COL) index: 87

Mississippi boasts a 3.01 home price-to-income ratio, which earns the state a high ranking, despite a significantly higher median property tax bill of $1,215 (compared to West Virginia). The overall cost of living (87) is among the lowest in the country, according to the BEA.

• The trade-off: The job market in Mississippi has been historically slower-paced, though metropolitan areas may sing a different tune. Still, Mississippi has one of the nation's highest grocery taxes at a whopping 5%. Home insurance premiums can also be high compared to the national rate, according to the latest data from Bankrate.
• Should you move? Professionals in agriculture or manufacturing who value a low-cost, warmer climate might consider moving to Mississippi. Also, those who want to live on the cheaper side of things may consider the Magnolia State home.

See also: 10 Tax-Friendly States for Retirees in 2026

3. Arkansas: Very low property taxes and costs on daily essentials

Home price-to-income ratio: 3.09

Median property tax bill: $1,040

Cost-of-living (COL) index: 86.9

Arkansas may be a haven for frugal living, holding the lowest overall COL index on this list at just 86.9. Daily essentials like gas and food are significantly cheaper here than in, say, Alaska or South Carolina. Property tax bills, too, can be quite low, at just over $1,000 per the latest U.S. Census Bureau data.

• The trade-off: Arkansas has some extreme weather. Capital gains are taxed as ordinary income (with a 50% exemption on net long-term investments), and high state and local sales taxes are used to offset the low property taxes.
• Should you move? You might relocate to Arkansas if you're an outdoor enthusiast looking to take advantage of the state's many mountains, lakes, and rivers (weather permitting). On the other hand, corporate professionals might settle near growing hubs like Bentonville or Fayetteville.

4. Oklahoma: Lower median household income and home prices

Home price-to-income ratio: 3.07

Median property tax bill: $1,599

Cost-of-living (COL) index: 87.8

Oklahoma has a relatively low home price-to-income ratio of 3.07, according to data sourced from Property Shark. Daily essentials like gas and electricity are also affordable with an index score of 87.8, about 12.2% lower than the national average.

• The trade-off: Property taxes are the highest in the states on this list, with a median bill of $1,599. Residents must also contend with "Tornado Alley" weather and a regressive tax system that relies heavily on sales tax.
• Should you move? Oklahoma typically offers a highly favorable business tax environment, which makes it a more attractive place to live for entrepreneurs and business owners. But once you're retired, some of your income may still be taxed, like distributions from your pension, 401(k), and IRA.

5. Alabama: The 'middle ground' of low taxes and cost of living

Home price-to-income ratio: 3.28

Median property tax bill: $788

Cost-of-living (COL) index: 88.8

Alabama has the second-lowest property tax bill on our list, with a median of just $788. The Heart of Dixie's COL index of 88.8 and home price-to-income ratio of 3.28 also make the state very affordable, though slightly less so than the top five, according to 2026 Property Shark data.

• The trade-off: Alabama summers are hot and humid. Combined state and local sales tax can reach 9.46%, according to the Tax Foundation; Alabama is one of the few states to still tax groceries, too.
• Should you move? Recent college grads, particularly in the growing tech and aerospace industries, might call the Cotton State "home." Although retirement income is state-taxed, certain exemptions and no state taxes on Social Security could make retirement more affordable.

6. Kentucky: Solid middle ground for overall affordability

Home price-to-income ratio: 3.23

Median property tax bill: $1,544

Cost-of-living (COL) index: 90.2

Kentucky isn't a standout performer for any one metric, but rather an overall affordable choice across the board. With a home price-to-income ratio of 3.23, you'll only need to offer about 3.2 times the average annual salary to buy a home, plus the cost of living is almost a full 10 points below the national average (per BEA data).

• The trade-off: Even though the median property tax bill of $1,544 is higher than that of many states listed here, it isn't the overall highest. However, if you plan on retiring in Kentucky, the Bluegrass State still taxes some retirement income (though it offers significant exemptions) and is one of the few states with a death tax.
• Should you move? Those seeking a blend of cultural hubs (like Louisville or Lexington) and affordable rural living could choose to live in Kentucky. But if you love the fast-paced energy of a city with bustling nightlife, you might look elsewhere.

7. Louisiana: Affordable living and home prices

Home price-to-income ratio: 3.56

Median property tax bill: $1,180

Cost-of-living (COL) index: 88.2

A 3.56 home price-to-income ratio puts Louisiana in the bottom half of the list. Yet while home prices are higher relative to income, the $1,180 median property tax bill remains a major draw for new residents. Plus, the COL index is still 11.8% lower than the national average, per the BEA.

• The trade-off: Louisiana has the highest sales tax in the U.S. (exceeding 11% in some areas). Home insurance premiums are also rising due to the state's location on the Gulf Coast, and summers are humid.
• Should you move? Budget-savvy buyers who prioritize lifestyle, arts, and food culture might make the move to the Pelican State. Once you retire, you could also find enjoyment in escaping the harsh winters of the north.

8. South Carolina: Popular destination with some affordability

Home price-to-income ratio: 3.74

Median property tax bill: $1,251

Cost-of-living (COL) index: 93.7

South Carolina is among the top ten states people are moving to in 2026, and current home prices reflect that. The median property tax bill is $1,251, which isn't bad, but the COL index of 93.7 is the highest on our list so far (yet still below the national average), according to 2026 BEA datasets.

• The trade-off: Rapid growth in recent years has put strain on the state's infrastructure and caused traffic congestion in popular areas like Charleston. While primary residences are taxed at a relatively low rate, vacation homes are taxed at a higher rate.
• Should you move? South Carolina remains a top destination for families and retirees who want coastal access without Florida's higher costs (which are above the national average). The state also frequently ranks as one of the best for military retirees due to veteran benefits.

See also: 10 Cheapest Places to Live in South Carolina

9. Tennessee: Can be affordable despite high growth

Home price-to-income ratio: 4.12

Median property tax bill: $1,442

Cost-of-living (COL) index: 91.9

Tennessee ranks 9th on our list due to its highest home price-to-income ratio of 4.12. The Volunteer State also has the third-highest COL index on our list, at roughly 8% below the national average, per the BEA. Like South Carolina, Tennessee is a top ten destination for new residents, and the median property tax bill of $1,442 reflects that.

• The trade-off: High sales taxes and vehicle registration fees can offset Tennessee's "no state income tax" status, and a competitive housing market is pricing some folks out of popular places like Nashville.
• Should you move? Professionals and families who can bring an out-of-state salary to a high-growth market might benefit from a move. And once you have a home, retirees could prosper with no state taxes on retirement income.

See also: 10 Cheapest Places to Live in Tennessee

10. Alaska: High cost of living and less affordable

Home price-to-income ratio: 3.80

Median property tax bill: $738

Cost-of-living (COL) index: 102.4

Alaska ranks last in affordability among states with low property tax bills, even with an abnormally low median property tax bill of $738. The Last Frontier has the highest COL index on our list (2.4 points above the national average), and the state has the second-highest home price-to-income ratio of 3.80, according to Property Shark.

• The trade-off: While Alaska famously boasts no income tax, fluctuating local taxes require careful planning (for instance, some areas have no property tax, while the median bill is closer to $4,113 in areas that do). The costs of daily essentials are high.
• Should you move? Self-reliant individuals and high-earners in energy or maritime might relocate to Alaska to maximize their space. But if you like city conveniences, the move may not be for you.

Should you move to a state with low property taxes?

A low property tax bill is a significant perk, but it's only one piece of the affordability puzzle. So while the home price-to-income ratio tells you if your salary can support a mortgage in a new state, lower property taxes often make up for that revenue through a higher state sales tax or lower investment in public infrastructure.

You should also weigh other quantitative factors — like COL indices — against qualitative ones, like proximity to family or career opportunities.

Ultimately, the most "affordable" move is one where your income stays comfortably ahead of both the tax collector and grocery bill. Choose wisely.

Read More

• 9 No-Income-Tax States in 2026: Where You’ll Actually Save the Most
• How to Lower Your Property Tax Bill This Year
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Dear Wealth Wise: My husband just retired from his job due to early-onset dementia. I have heart failure and collect disability benefits. We owe $255,000 on our home and pay $8,500 a year in property taxes and homeowners insurance. Our mortgage rate is 5.34%. Utilities are around $399 per month. My husband wants to use his $300k 401(k) to pay down the mortgage. I want to move to a more affordable location. But we're in a very walkable neighborhood close to a beautiful lake, and I hate to give it up. We argue about this every day. Help!
— Love My Lake Home

Dear "Love My Lake Home": When you retire in a home and neighborhood you know and love, it can make your post-working years that much more rewarding. But what if it's a struggle to keep up with your housing costs?

The Urban Institute says that over the past 20 years, the share of senior households considered severely cost-burdened — meaning spending more than half of their income on housing — has nearly doubled. And that burden isn't limited to rent or mortgage payments. Rising homeowners insurance premiums and property taxes are also big drivers.

Here, we have a couple struggling to afford their home. They have a moderate mortgage interest rate and high property taxes.

The husband is willing to empty his 401(k) to pay off the mortgage, while the wife thinks moving to a more affordable place is the smarter choice. At the same time, both would clearly rather stay put.

It's a tough situation, especially since it's compounded by the couple's health problems. Here's how the experts suggest navigating it.

Raiding your 401(k) may not solve your problem

If you're carrying a mortgage with a moderate interest rate, you might assume that tapping your 401(k) to pay it off is a smart move. The sooner you eliminate that loan, the more money on interest you can save.

But John Davis, Financial Planner at JKD Financial, warns that the math may not work out.

"One thing people often miss when they look at a 401(k) balance is that the IRS essentially owns a big chunk of it," he says. "If you were to pull out the full $300,000 in a single year to pay off that $255,000 mortgage, you’d likely trigger a tax bill of $60,000 to $70,000, assuming you’re in a moderate bracket."

Davis also cautions that 401(k) providers are legally required to withhold 20% of distributions for federal taxes immediately.

"That means you’d only actually get $240,000 in your hand, which wouldn't even be enough to pay off the $255,000 mortgage," he says. "You’d end up with a huge tax bill next April and still have a mortgage balance."

Then there are tax penalties to consider. We assume that our reader and her husband are over age 59½, since she hasn't expressed concern about 10% penalty for early withdrawals from a 401(k). However, if they are younger than 59½, they may possibly qualify for an exemption due to their significant health issues, though they would still have to pay ordinary income tax on the withdrawal.

Emptying your 401(k) means losing flexibility

Taxes aside, there's a real danger to using your 401(k) to pay off a mortgage. As Chad Gammon, CFP and owner of Custom Fit Financial, says, "With the 401(k), you have liquidity and flexibility to use that money for needs that come up, such as medical. Paying off the mortgage opens up some cash flow, but not to the extent of having the 401(k)."

Gammon agrees, noting that while it's possible to borrow against home equity, that doesn't offer the same level of flexibility as having money in a 401(k).

"Money that is in a 401(k) is easier to use than money that is tied into a personal residence," he insists. "If they pay off the mortgage, they may be forced to get a home equity loan on the home they thought they just paid off. That very well could be at a higher interest rate and they'd be worse off than where they are today."

If you're going to move or downsize, do it carefully

In a situation like this, moving to a more affordable location or downsizing might seem like a logical money-saving choice. But Davis says it's important to do your research first to make sure that's actually the case.

"For many people in your shoes, downsizing is a much cleaner way to free up cash, but only if you're careful," he warns. "With today's housing prices, downsizing can sometimes cost just as much as staying put once you factor in moving costs and higher interest rates on a new place."

Keep in mind that if you're buying a home in a retirement community, you may be subject to expensive HOA fees that can rise over time. This isn't to say that a new place definitely won't save you money, but you'll need to get a solid handle on all of the costs involved before making a move.

One strong argument for downsizing: She and her husband may exclude up to $500,000 in capital gains when selling their primary residence as a couple. Their equity profit from selling the house would likely be tax-free, whereas the traditional 401(k) withdrawal would probably incur significant taxes.

Consider a middle-ground solution

Raiding your 401(k) to pay off your mortgage leaves you fairly illiquid. A better option, says Davis, may be to accelerate mortgage payments but carry that loan a while longer.

"If you really want to stay in that walkable neighborhood you love," Davis explains, "pay the mortgage down faster but over a longer period — say five to 10 years. Instead of one big withdrawal, take smaller monthly or annual distributions."

This approach, adds Davis, satisfies the urge to get rid of debt and could result in interest savings. But importantly, it spreads out the tax hit so you aren't jumping into a much higher tax bracket all at once.

"Plus," says Davis, "it keeps your 401(k) assets available to generate income for your other needs if the house becomes too much to handle later on."

A final word from Wealth Wise — healthcare should come first

One of the most concerning elements of this reader's question is the double burden of her own health issues and her husband's early-onset dementia (defined as dementia starting before age 65). Unfortunately, it's hard to predict the trajectory of this type of dementia, but our reader may face several years when her husband needs extensive care that she may not be physically able to provide.

As she balances staying in the home she loves versus downsizing, she should also consider how to pay for long-term care. Tapping the 401(k) for healthcare may prove a smarter move than focusing on the house. Moreover, staying in the home may be untenable if it is not adapted for aging in place.

Working with a financial adviser may help her untangle the emotional and financial pressures she'll face in the next few years. We wish her all the best.

Read More From Wealth Wise

Wealth Wise is Kiplinger's advice column on navigating retirement-related dilemmas. Questions from real people, for real people.

• Wealth Wise: Should We Borrow Money From Our Elderly Father?
• Wealth Wise: You’ve Mastered Asset Allocation — Now It’s Time for Asset Location
• Wealth Wise: Bridging the Healthcare Age Gap for Military Couples with TRICARE and Medicare

Not all questions submitted will be published, and some may be condensed and/or combined with other similar questions and answers, as required editorially. The answers provided by our writers and experts, in this advice column, are for general informational purposes only. While we take reasonable precautions to ensure we provide accurate answers to your questions, this information does not and is not intended to constitute independent financial, legal, or tax advice. You should not act, or refrain from acting, based on any information provided in this feature. You should consult with a financial adviser regarding any questions you may have in relation to the matters discussed in this article.

Read More

• You May Not Want to Downsize in Retirement: Here's Why
• We Are Retired, Mortgage-Free, With $970K in Savings. My Husband Wants to Downsize to Lower Our Costs, but I Love Our House. Help!
• My Beloved Husband Has Early-Stage Dementia. He Is 'Doing Well,' but How Do I Protect Our $1.6 Million Savings Right Now?
• I'm 63 With an Aging House That Needs Repairs, but I Might Move to a Retirement Community In a Few Years. Is It Worth Making Those Fixes?

If you own an electric vehicle, time is running out to take advantage of the EV charger tax credit. The Alternative Fuel Vehicle Refueling Property Credit covers up to 30% of the cost of a home EV charging station, including eligible hardware and installation expenses, up to $1,000.

The credit was originally extended through December 31, 2032. However, the GOP's One Big Beautiful Bill eliminated the tax credit, and it's now set to expire on June 30, 2026.

If you've been considering installing a home charging station, you might want to act soon to take advantage of the credit before it disappears.

Where you install the charger matters

To qualify for the credit, the IRS (PDF) requires you to install the charger in a home in an eligible low-income community census tract, or a nonurban census tract. According to the IRS, about two-thirds of Americans live in census tracts eligible for the credit.

A census tract is a small geographic region or neighborhood as defined by the U.S. Census Bureau. Census tracts allow the government to collect and organize data about these specific areas.

To determine if you live in a tract that’s eligible for the tax credit, use the U.S. Department of Energy 30C Tax Credit Eligibility Locator, which allows you to look up your address, and it identifies whether your home is in an eligible tract.

Not every home will qualify for the credit. If you have a second home, the charger must be installed at your primary residence to qualify for the credit.

Which types of EV chargers qualify

The EV charger tax credit applies to Level 1 and Level 2 chargers; the chargers must be new.

Level 1 chargers use standard 120V outlets and can be used for lighter charging needs, but most homeowners install Level 2 chargers, which are faster and can fully charge typical electric vehicles overnight.

When shopping for an EV charger, consider how you tend to use your vehicle, your typical charging needs and the types of features that you might want.

For example, smart scheduling can charge your vehicle during off-peak times when energy rates are lower, and smart chargers can provide detailed summaries of energy usage and can send you notifications to remind you to charge your car.

Both the hardware and the installation could count toward the tax credit.

Below are a few top-rated Level 2 EV chargers we found:

Do you need an electrician?

Many Level 2 chargers require professional installation. Depending on the location of the charger and the capacity of your electrical panel, an electrician might need to upgrade the panel to handle the additional electrical load.

The installation will typically require an electrical permit, which a licensed electrician can usually obtain on your behalf. If you live in a homeowners association (HOA), you might also need approval before installing a charger.

Installing a charger can become more complicated if you rent your home or live in a condo. In these situations, you might need approval from a landlord, property owner or condo board. You might also have to follow building rules or bylaws that could affect where the charger can be installed or what type of charger you can use.

What records should you keep for the tax credit?

It's essential to carefully organize and keep records of the charger installation for the tax credit. As you move through the process, be sure to retain the following:

• Receipts. Keep receipts for the charger, related equipment and installation costs.
• Permits. Save all permit paperwork, including the signed permit card showing the installation passed inspection.
• Electrician invoices. Retain all invoices from your electrician, including charges for permits, panel upgrades and installation work.
• Proof of payment. Keep proof of payment for all expenses, such as credit card statements, receipts or canceled checks.
• IRS Form 8911. You'll use IRS Form 8911 to claim the tax credit when you file your taxes. Be sure to keep an extra copy of the form for your records.

Is it worth rushing before the deadline?

Installing an EV charger is a significant project, so it’s important to research your options and choose a charger that fits your needs.

That said, the tax credit could provide meaningful savings. Most home chargers cost between $500 and $900, while installation can range from about $1,000 to $3,000 depending on the complexity of the project and the condition of your existing electrical panel.

For example, if your total project cost came to $2,800, you could potentially receive an $840 tax credit. If you were already planning to install a charger, it might be worth completing the project before the June 30 deadline.

To meet that deadline, though, you’ll likely need to move quickly, especially if permits are required.

Start contacting electricians now to check their availability and ask whether they believe the installation can realistically be completed in time.

To qualify for the EV charger tax credit, the installation must be fully completed by June 30.

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Given rising energy costs, renters are looking for alternative ways to save on electricity. Plug-in solar panels are one potential solution, and they're quickly gaining traction because of their ease of use. Lawmakers in Maine, New Hampshire, Vermont, Massachusetts, Connecticut and Rhode Island are all advancing proposals that would allow residents to use plug-in solar systems that connect to standard home outlets.

Plug-in solar systems, also called balcony solar systems, are smaller alternatives to traditional rooftop panels. These systems typically feature a compact solar panel that can be placed on a balcony or patio, without the need for complex installation.

That simplicity makes balcony solar a more practical option for renters who want to offset some electricity costs without making permanent changes to a rental unit. As interest in plug-in solar grows, states are beginning to revisit regulations around the technology, while renters weigh whether the potential savings justify the upfront cost.

Why renters are suddenly interested in portable solar

Rising electricity costs are likely driving the growing interest in portable solar systems. According to the National Energy Assistance Directors Association, average summer residential cooling bills are projected to reach $778 in 2026. That's an 8.5% increase from last year's average bill of $717 and a 37.2% increase since 2020.

Traditional rooftop solar panels can help offset those costs, but they remain out of reach for many renters. Rooftop systems are expensive, require professional installation and permanently alter a building's structure, meaning tenants would typically need a landlord's approval before installing them.

Balcony solar systems offer a more flexible alternative. These smaller systems generally cost less upfront, don't require permanent structural changes and can move with a renter from one property to another.

How much money can renters actually save?

Balcony solar setups will not power an entire rental property, but they can help offset some everyday electricity use. Most plug-in systems on the market range from about 400 to 800 watts, which is typically enough to help power smaller appliances like a Wi-Fi router and standby electronics.

The exact savings will depend on the size of the system you buy, your electricity usage, local utility rates and how much direct sunlight your panels receive. In many cases, renters may save anywhere from about $10 to $50 per month, with higher savings possible in states where electricity costs are more expensive, according to EnergySage.

Over the course of a year, a well-placed system in a sunny location could offset several hundred dollars in electricity costs.

How much do balcony solar systems cost?

Balcony solar systems can vary significantly in price depending on their size, battery storage capacity and portability features. Smaller plug-in systems designed to offset basic apartment electricity use may cost a few hundred dollars, while larger systems with battery backup and indoor power storage can range from about $2,000 to more than $3,000.

Some of the most recognizable brands in the portable solar market include Jackery, EcoFlow and Anker. Many of these systems combine portable solar panels with battery storage, allowing renters to store power for later use or provide backup electricity during outages.

More expensive systems typically offer larger battery capacity, faster charging speeds and greater flexibility for indoor and outdoor use. But renters should also consider whether the potential energy savings justify the upfront cost. In some cases, it could take several years of lower electricity bills to offset the price of a premium solar energy system.

Before buying a balcony solar kit, renters should consider portability, balcony space, sunlight exposure and whether the unit has appropriate safety certifications. Smaller apartments with limited direct sunlight may not generate enough electricity to justify a larger setup.

Below are a few standout solar power kits we found:

The legal gray area around plug-in solar in the U.S.

While plug-in solar adoption is already widespread in countries like Germany, regulations in the United States are still evolving.

Some states are beginning to ease restrictions on balcony solar systems. Utah has passed legislation making it easier for renters to use plug-in solar panels, while California and Illinois are considering broader legalization efforts. In some cities, renters may still need permits or approval before installing a system, so accessibility can vary depending on where you live.

Many of these regulations stem from utility and safety concerns tied to how solar systems connect to the electrical grid. Traditional rooftop solar systems are professionally installed and include technology designed to prevent excess electricity from flowing back into the grid.

Most balcony solar systems work differently. Rather than feeding large amounts of power into the grid, they are typically designed to help offset electricity used directly inside a rental unit. But some laws and local regulations do not yet distinguish between rooftop and plug-in systems, meaning renters may still face permit requirements or installation restrictions.

What renters should know before buying a system

Before you buy a plug-in solar system, consider the following factors:

• Landlord and HOA considerations: Rental agreements and HOA regulations may restrict the use of balcony solar systems. Before buying a system, check your lease and any building or community rules to confirm that plug-in panels are allowed.
• Safety certifications: Since these systems connect to your home's electrical system, safety certifications matter. UL Solutions has developed a testing and certification standard for plug-in solar systems based on UL 3700. Look for certified systems and avoid cheap or uncertified products.
• Sun exposure: Your savings will depend heavily on how much sunlight your panels receive. Balconies with limited direct sun or heavy shade may produce far less energy, reducing the return on your investment. The direction your balcony faces can also affect performance.

Could balcony solar become mainstream?

Europe has already embraced balcony solar, offering a glimpse at how the technology could expand in the United States. Germany has become one of the leading examples of adoption. According to Euronews, more than one million plug-in solar systems were installed in Germany between 2022 and 2025. Government incentives and falling solar equipment prices have likely helped fuel that growth.

Alternative energy sources like solar may help renters and homeowners reduce electricity costs, but the future of balcony solar in the U.S. will likely depend on how quickly states update regulations and make the systems easier to install and use.

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Editor's note: This is the final article in a five-part series about all-asset retirement planning that covers such topics as using lifetime annuities and housing wealth, making the most of tax benefits, and managing investment portfolio risk. See below for links to the first four articles.

In writing this series, we saved the topic of managing investment risks in a retirement plan for last. Not because it's either least or most important, but rather, it's an area where things could get complicated, particularly if it got into security selection or hedging strategies that go beyond our retiree's — and even our — expertise.

The reality is we have reduced the investment risk challenge through all-asset planning even before we get to this point.

Market volatility

Let me give you some context and background. Just as we did in the article Treat Home Equity Like Your Other Retirement Investments, we measure how investment markets perform by using the historical performance of benchmark portfolios over the past 30 years. No measure can predict the future, so we're comfortable with historical.

During the past 30 years, the S&P 500 index has twice dropped more than 20% for the entire year. So, with, say, $1 million in the market invested in an index fund of S&P 500 stocks, that would be a more than $200,000 reduction in market value in a single 12-month period.

Now, we know stocks recover, but if you were newly retired or late in retirement, this would be very upsetting and might cause you or your adviser to pull back on stocks — and lose the opportunity to regain that market value.

This is particularly an issue if you're liquidating a portion of your portfolio each year to fund, for instance, withdrawals/distributions (RMDs) from your IRA account.

The graphs below show the volatility of the S&P 500 using compound annual growth rates for five- and 20-year periods ending in the calendar year indicated.

Note in particular how the returns tend to stabilize as the holding period lengthens. The key appears to be to "stay the course," even in the face of adverse short-term performance.

But just as important is the understanding of how market performance could drive your plan's results.

How an all-asset plan already reduces investment risk

Let's see how all-asset planning has already reduced this risk — and made it more manageable. The first step in our planning is to combine the S&P 500 portfolio with a fixed income bond portfolio to create a Balanced Portfolio used in the rollover IRA account.

There is no return or tax reason to keep these investments separate for a rollover IRA account, and it also has the advantage of reporting a blended return. These graphs show the blended returns for those same five- and 20-year periods.

While reducing the risk over the long term by allocating to a fixed income portfolio, there is still stock market risk.

Steps to manage the investment risk

Despite the lowering of risk with a Balanced Portfolio, your plan is impacted by the stock market returns, and you may want that risk reduced.

Here are some preliminary steps already in place in an all-asset plan and covered in our first four articles of this series.

• Include housing wealth in planning. By taking a portion of income in a HECM (home equity conversion mortgage) drawdown, you're reducing IRA withdrawals. At the same time, you're building up liquid savings from, say, the HECM line of credit.
• Include lifetime annuities. While taking care of longevity risk through a SPIA (single premium immediate annuity) and a QLAC (qualified longevity annuity contract), you're reducing IRA withdrawals and, at the same time, reducing investment risk. These annuities provide fixed payments and are backed by highly rated insurance companies.
• Reduce income taxes. As described in our fourth article in this series, The 9% Solution, these first two steps in our example are reducing income taxes by as much as 50% in the first year.
• Use high-dividend portfolio for personal savings. If you're including personal savings in your plan, using this portfolio to increase cash flow from higher dividends also benefits from lower volatility and lower tax rates on dividends.

How much risk is left?

A lot of the work has already been done. For our sample investor ($1 million each in a rollover IRA, personal savings and the value of the home), about $420,000, or 14% of total net worth, is in an S&P 500 index and subject to liquidation to cover withdrawals. (If no personal savings, then it represents 21% of net worth.)

Here are two pie charts that show the allocation of all sources of income, and then focuses on those that are "safe" and not dependent on stock market performance.

The charts show that for our sample investor, a 67-year-old man, 76% of the income is not based on stock market performance.

Managing risks through plan adjustments

Whatever the protections from other assets, how do we deal with any residual risk? First, here's what we don't do in our planning:

• We don't use the HECM line of credit as a planned backstop for the stock market volatility. We have earmarked that for long-term care and unplanned expenses.
• We don't accelerate the income under the QLAC — that's already part of the planned income.
• We don't build in hedges to protect the portfolio.

What we do is look at two time frames:

• The initial five to ten years of the plan when a sharp drop in the market could reduce your retirement savings and upset your long-term plans. That's called a sequence of returns risk.
• A period of long-term underperformance where you literally might not have funds to cover the planned-for IRA withdrawals.

For the first time frame, we suggest thinking about allocating a portion to a money market fund. Our current model suggests an allocation into a money market fund of about two to three times the average IRA withdrawal during this initial five- or ten-year period.

This will be sufficient if we make withdrawals from the fund in adverse markets over the initial period.

Based on our early tests with historical performance, it pays for itself and, in particular, addresses the sequence of returns risk.

For the second long-term underperformance, we suggest you consider updating your plan and see how it works with an allocation of the reserve income to current income needs. This action may cut the amount you planned on for long-term care or to pay down your HECM loan to create a larger legacy. You'll be the judge of these options.

While the elements of the all-asset plan are correct, the allocations among asset classes should be set to meet your objectives.

If you have a chronic illness, you might skip the lifetime annuity or at least elect beneficiary protection. And if you have a favorite investment opportunity beyond our planning, then exclude it from your retirement plan and possibly accept a lower income or legacy.

About the recent news regarding inflation

With the announcement last week that inflation had jumped to 3.8% in April, we thought it necessary to address the inflation risk as one that needs management.

To put it in perspective, over the 30-year period ending in December 2025, there have been 11 five-year periods where inflation exceeded a compound average of 2.5%.

One straightforward approach would be to increase the assumed inflation rate built into the plan from 2.0% to 2.5%.

With this change, our sample investor (a man age 67) with $2 million in retirement savings and $1 million in the value of his house would see starting income drop from $131,000 to $124,000.

Now, what to do about short-term inflation jumps like the current 3.8%? You can accept the inflationary adjustments as they occur. Or, to avoid any income reduction, draw on, say, the HECM line of credit or other sources of savings.

Alternatively, you could set aside a slightly larger amount in the money market fund designed for stock market volatility and draw on it when needed to deliver the higher income.

Notably, since the most recent five-year period had a compound average of nearly 4.5%, it's smart to keep an eye on inflation.

Why now?

For decades, retirement planning has focused almost entirely on investment portfolios. The implicit assumption is that a well-diversified portfolio — managed prudently — can solve every retirement challenge.

Maybe it used to be true, but that assumption no longer holds. As suggested above, the construction of an all-asset plan can reduce the risks and the impact of adverse effects of the stock market.

Just remember, the all-asset plan is delivering the highest levels of income and liquid savings. It also has the lowest early tax rates and market risk. To find out for yourself, you can order a complimentary plan.

The other articles in this series

• It's Time to Redefine Retirement for Retirees With $500,000 to $5 Million
• Unlock Housing Wealth and Tax Benefits by Adding Lifetime Annuities to Your Retirement Plan
• Does Your Retirement Plan Ignore Half of Your Net Worth?
• The 9% Solution: An Expert Guide to Retirement Tax Breaks That Could Cut Your Tax Rate Nearly in Half

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

A client sold a property for $2.5 million that they had owned for more than 30 years. Their basis was low enough that the estimated tax bill was just over $800,000. Before we talked about anything else, they asked the question most people ask: "Should I do a 1031 exchange?"

It sounds like a tax question. It isn't. It's a portfolio decision.

The fork in the road

At a high level, they had two paths:

• Pay roughly $800,000 in taxes and invest the remainder wherever they wanted
• Defer the taxes and reinvest the full $2.5 million into real estate through a 1031 exchange

On paper, the second option looks better. More capital stays invested. No immediate tax hit. But that only works if the investment that follows actually makes sense.

So, we paused the tax discussion and I asked a different question: "What are you trying to accomplish from here?"

What had changed?

For years, this client had been a hands-on owner. They dealt with tenants, maintenance, financing — everything that comes with direct real estate. But by the time they sold, their priorities were different.

They didn't want another property to manage. They didn't want to be tied to one location. They still liked real estate — but not the way they had owned it.

That distinction mattered, because a 1031 exchange doesn't just defer taxes — it commits you to another real estate investment.

A typical 1031 exchange

Most investors don't think about a 1031 exchange that way. They think: Avoid the tax, find a replacement and move on.

In reality, the structure introduces a constraint. Once the sale closes, the 45-day identification window starts. That timeline tends to drive behavior.

People don't always choose the best option. They choose what fits. That might be:

• Another property they can close quickly
• Something familiar
• A structure that solves the exchange without fully considering the long-term outcome

The focus shifts from "What should I own?" to "How do I complete this?"

A different approach

In this case, the client still wanted real estate exposure, but not direct ownership. So instead of replacing one property with another, they used the 1031 exchange to transition into a more passive structure.

That meant moving into professionally managed real estate rather than operating it themselves. For them, that solved two problems at once:

• It deferred the taxes
• It removed the day-to-day burden of ownership

That's where structures like Delaware statutory trusts (DSTs) are often used. They allow investors to participate in institutional real estate without managing it directly, and they fit within the 1031 framework.

But that still wasn't the full picture.

What happens after matters

A 1031 exchange answers the tax question. It doesn't answer the longer-term one.

Over time, this client's thinking evolved again. They weren't just trying to simplify ownership — they were trying to diversify beyond a single asset class.

That's where the next phase of the strategy comes into play.

Some investors eventually transition from direct or fractional property ownership into broader real estate portfolios through structures like a 721 exchange. Instead of owning individual properties, they own interests in diversified real estate at the portfolio level.

It's not something you have to decide on day one. But it's part of the arc for investors who want to move from concentrated ownership to something more diversified and liquid over time.

The trade-offs are real

None of these paths is perfect. Staying in real estate — whether directly or through a structure — means:

• Less liquidity than traditional investments
• Less control, especially in passive structures
• Committing capital for a longer period

Paying the tax, on the other hand, gives you flexibility but reduces the amount you're investing.

There isn't a universally "better" option. There's only the option that aligns with what you're trying to do next.

The decision most people skip

When we stepped back, the client realized something simple: They didn't actually need to decide whether to do a 1031 exchange first.

They needed to decide:

• Did they still want real estate exposure?
• If so, in what form?
• And how should this capital fit into the rest of their portfolio?

Once those answers were clear, the path followed. In their case, they used the 1031 exchange, but not in the way they initially expected.

It wasn't about replacing a property. It was about repositioning.

What this means for you

If you're facing a large gain, it's easy to fixate on the tax. But that's only one part of the decision.

The more important question is what you want to own after the transaction is complete — and how that choice affects your flexibility, your risk and your overall portfolio.

A 1031 exchange can be an effective tool. So can stepping back and rethinking your approach entirely.

The key is understanding that you're not just solving for taxes. You're deciding what comes next.

For advisers and investors working through this decision, the challenge is less about identifying the tools and more about sequencing them correctly. The difference between a 1031, a DST or a 721 structure is not just technical — it's how each fits into the broader portfolio and long-term plan.

Related Content

• Counting on Real Estate to Fund Your Retirement? Avoid These 3 Costly Mistakes
• Will Real Estate and Private Equity Start to Shine Again in 2026?
• 721 UPREIT DSTs: Real Estate Investing Expert Explores the Hidden Risks
• You May Still Be Able to Defer Your 2025 Capital Gains
• How to Turn Your 401(k) Into A Real Estate Empire — Without Killing Your Retirement

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Every year, thousands of people move to Georgia. In 2026, the Peach State remains a top 10 destination for inbound residents according to the latest U-Haul research.*

It's easy to see why: With views ranging from the Blue Ridge Mountains to the historic, moss-draped streets of Savannah, Georgia offers a distinct four-season lifestyle that not many in the U.S. get to enjoy.

Beyond the scenery, the financial forecast might be bright, too. Georgia has continued to be part of the state "flat tax revolution," with Gov. Brian Kemp recently signing legislation that cut the income tax rate to 4.99%.

On top of that, new statewide caps now limit how much your property assessments can rise, and many Georgia residents are seeing rebate checks hitting their mailboxes just in time for summer.

If you're looking to claim your piece of the Peach State without breaking the bank, here are the ten cheapest places to live in Georgia.

*The U-Haul Growth Index is an annual report measuring migration trends through net gain or loss of one-way U-Haul equipment.

Cheapest places to live in Georgia

After Kiplinger ranked property tax bills from highest to lowest per county in Georgia, one trend jumped out: Rural areas are often the cheapest. You’ll typically find a more affordable lifestyle in the country than in, say, the bustle of Atlanta or Augusta.

But if you’re ready to see festivals and state parks, and maybe willing to travel to a city for other amusements, look into these affordable places in Georgia.

Note: Kiplinger used 2026 data presented by the Tax Foundation (sourced from the U.S. Census Bureau) to find the cheapest counties in Georgia to live.

Taylor County

Median property tax bill: $838

Median home price: $87,700

Taylor County property taxes are relatively low, with a median bill of around $840. Home prices, too, tend to be affordable compared with other places in the state at just $87,700, according to the latest data from the Tax Foundation.

Seeking out agricultural simplicity? Taylor could be your sanctuary. The county is famous for its rolling orchards, which boast more than 3,600 acres of sweet Georgia peaches starting in mid-May and transitioning to buttery pecans in the fall.

Beyond the farms, residents have easy access to the great outdoors. You can spend weekends fishing at the Fall Line Sandhills, boating along the Flint River, or checking out the local motorsports park at Silver Dollar Raceway.

Come to Taylor for budget-friendly family fun, but stay for the low property tax bill.

Twiggs County

Median property tax bill: $807

Median home price: $111,300

With the highest median home price on the list at more than $111,000, Twiggs County has a median property tax bill of only $807, per the U.S. Census Bureau. The relatively low tax bill might be due to the county's effective property tax rate of only 0.4% — less than half the national average.

Twiggs is perfect for the discerning resident who wants to save and stay in the heart of it all. Located at the geographic center of Georgia, the county is only 90 minutes from Atlanta and even closer to suburban amenities in Macon.

History buffs can explore the nearby Ocmulgee Mounds National Historical Park, home to ancient trails, and the Museum of Aviation, with its impressive aerospace displays.

If you prefer the water to the woods, Lake Tobesofkee sports 35 miles of shoreline, while the 8,600-acre Bond Swamp National Wildlife Refuge provides a rare opportunity for bald eagle viewing and wetland hiking.

When you're drawn by history or the outdoors, Twiggs County might give you a way to plant roots without breaking the bank.

Jenkins County

Median property tax bill: $797

Median home price: $92,900

Home prices remain relatively competitive in Jenkins County, with the median price tag sitting just under $93,000. Homeowners also enjoy one of the most affordable property tax bills in the region (less than $800), which, according to Tax Foundation data, is lower than all the neighboring counties.

Relocating to Jenkins offers a unique scenic escape centered around Magnolia Springs State Park.

Known for its crystal-clear springs that produce 7 million gallons of water daily, the park is a hub for both nature and history. Residents can stay overnight in cozy cottages, spot alligators along the boardwalk or tackle the bike loop as part of the journey to earn an exclusive T-shirt from the Muddy Spokes Club.

The county's seat, Millen, also serves as a historic railroad hub. Visitors might watch trains from across the state traverse the local depots. For an even slower pace, you can explore the 35-mile Millen-Jenkins County Scenic Byway, which winds through pastoral farmlands and historic sites.

Supposing you're a fan of cycling, quiet nature and keeping your tax bill low, Jenkins County might be the destination for you.

Wilcox County

Median property tax bill: $795

Median home price: $87,600

Located in south-central Georgia, Wilcox County home prices sit comfortably at $87,600, and median property tax bills are around $795, according to the latest data released by the U.S. Census Bureau. This affordability is partly due to the county's low-density charm, with a population that hovers around 8,800 residents.

Don't let the uncrowded nature of Wilcox fool you; for remote workers or retirees searching for small-town tranquility, the area might be a perfect fit. The county seat, Abbeville, is perched along the Ocmulgee River, offering locals prime access for boating and fishing.

On the weekends, you can head to nearby Calhoun Produce for farm-fresh treats and seasonal events or rev things up at the Funny Farm ATV Park.

Whether you're a local thrifter looking for a change of pace or a newcomer wanting to escape the city hustle, Wilcox might provide a great backdrop to save a little extra every month.

Wilkinson County

Median property tax bill: $775

Median home price: $86,300

Homes in Wilkinson tend to have a lower median price compared with the rest of the state, at around $86,300. Property taxes are equally wallet-friendly; according to the latest Tax Foundation data, the median annual bill is $775.

The landscape in the area is unique — picturesque rolling hills sit atop vast kaolin mines. Wilkinson is a global leader in producing this specialized white clay, which is essential for everything from high-end paper and paint to cosmetics.

Despite its industrial importance, the atmosphere remains deeply personal. The community is so welcoming that it has been recognized as a "County of Excellence" by the Association of County Commissioners of Georgia for three consecutive years.

The local culture is also reflected in the annual State Banana Pudding Festival held each spring — a quirky, delicious celebration that brings the whole county together.

Wilkinson also offers plenty of opportunities for hunting, boating and hiking in the area. Come for the low property tax bill, and stay for the neighborhood charm.

Warren County

Median property tax bill: $730

Median home price: $67,100

At only $67,100, Warren County holds the title for the lowest median home price on our list, according to 2026 Tax Foundation data. Even though the county's effective tax rate of 0.8% is close to the national average of about 0.9%, the exceptionally low property values keep the actual median property tax bill for homeowners at a modest $730 per year.

Despite the rural price tag, Warren County is only about 45 minutes west of Augusta — home to the famous Augusta National Golf Club and the world-renowned Masters Tournament.

Residents can enjoy that same sporting spirit closer to home at nearby favorites such as the Ogeechee Valley Country Club or Washington-Wilkes.

If golf isn't your game, there's still plenty to explore. You can join the community at the annual Sportsman's Festival to celebrate local heritage, browse the antique shops in downtown Warrenton, or take a walking tour of the county's beautifully preserved historic district.

Visit Warren County to escape the high cost of city living, and linger for the authentic, small-town Georgia vibes.

Appling County

Median property tax bill: $721

Median home price: $76,700

South of the Altamaha River is Appling County, home to relatively low median home prices of around $76,700. According to the latest U.S. Census Bureau data, the median property tax bill is also fairly modest, at $721.

Paddling along the Altamaha is a favorite pastime for locals, as the river remains one of the largest undammed watersheds on the East Coast. Naturalists might also explore the Moody Forest Natural Area, a 4,400-acre preserve home to 300-year-old longleaf pines and endangered wildlife.

For those who prefer a night under the stars, Falling Rocks County Park offers RV camping a stone's throw from the river.

Lastly, one of the Appling's most unique traditions is the annual Tree Fest in Baxley. Beyond the live entertainment and vendor markets, the festival is one of the few places you can taste a "rosin potato." Cooked in a boiling vat of pine resin, these potatoes are wrapped in newspaper and served with a texture and flavor that locals swear is unlike any other.

If you're looking for a nature-focused community and a budget-conscious bottom line, Appling could be a must-visit for 2026.

Treutlen County

Median property tax bill: $708

Median home price: $100,100

Nestled in the heart of Georgia's timber country, Treutlen County property taxes are relatively low, at barely above $700. Median home prices, however, are slightly higher than those in other places on this list, largely due to the lower inventory of existing Treutlen homes and a recent wave of high-value new builds.

New residents could find themselves in the county seat, Soperton, known as "The Million Pines City." In the 1920s, local farmer James Fowler planted more than 7 million pine trees in collaboration with chemist Charles Herty, proving that pine pulp could be turned into paper. The result revolutionized the Southern economy.

That nature-focused spirit lingers in the area today. Adventure seekers flock to the Ohoopee River, a rare "blackwater" river where tea-colored waters and stark white sandbars create a surreal backdrop for kayaking and fishing.

If you prefer land to water, the county also has some of the most productive hunting grounds in Georgia.

The community hosts the Million Pines Arts & Crafts Festival every November, where you can watch blacksmiths and potters at work, buy hand-woven rugs, or grab a plate of barbecue while listening to live music under the shade of the very pines that made the area known.

Check out Treutlen for the low property tax bill, and stay for a community that helped build the modern-day South.

Atkinson County

Median property tax bill: $625

Median home price: $79,000

About two hours from the bustling "River City" of Jacksonville, Florida, Atkinson County lends a pace of life — and a price tag — that might feel worlds away, according to the Tax Foundation.

With a median home price of $79,000 and a property tax bill of $625, Atkinson is the second-most affordable destination on our list.

Atkinson County is part of Georgia's berry industry, as its landscape is dotted with family-owned farms. During harvest season, the pace of life slows to match the picking cycles, offering a "farm-to-table" lifestyle that comes standard with the county's affordable property taxes.

For a step back in time, visit Pearson to see authentic 19th- and 20th-century houses that illustrate the grit of Georgia's early settlers. If you prefer solitude, the Alapaha and Satilla Rivers provide a peaceful escape.

Whether you're exploring the wetlands or tasting local produce, Atkinson County proves that a $625 tax bill could still buy a rich lifestyle in 2026.

Wheeler County

Median property tax bill: $554

Median home price: $88,200

Wheeler County is the cheapest place to live in Georgia, with a median property tax bill of only $554 and median home prices around $88,200, per 2026 Tax Foundation data.

Life in Wheeler can be water-based. The Little Ocmulgee State Park & Lodge is the county's social and recreational hub, featuring a 265-acre lake perfect for boating and swimming. While the kids enjoy the on-site splash pad, adults can take advantage of the acclaimed Wallace Adams Golf Course, known for its challenging fairways and scenic loblolly pines.

The park also hosts the annual Spanish Moss Festival each September, a weekend of arts, crafts, and live music that celebrates the unique beauty of the South Georgia landscape. If you prefer life in the saddle, the Sweetwater Horse Event Park is a local favorite, offering trail riding, horse training and full RV hook-ups for campers.

The relaxed, nature-focused atmosphere of Wheeler — coupled with the niche equestrian vibe — might just have you saying “yes” to the cheapest place to live in Georgia.

More Cheap Places

• 10 Cheapest Places to Live in Florida
• 10 Cheapest Places to Live in Texas
• 10 Cheapest Places to Live in North Carolina
• 10 Cheapest Places to Live in Tennessee

Memorial Day weekend often marks the start of summer fun, when many people pull patio furniture, kayaks and golf clubs back out of storage. But for households short on space, self-storage units can help keep seasonal gear, bulky items and overflow clutter out of the garage and basement until they’re needed again.

Self-storage has become increasingly common in the U.S. The industry now includes more than 2.1 billion square feet of storage space, and about one in three Americans currently uses self-storage, with another 18% planning to rent a unit in the future, according to SpareFoot.

In a recent survey of Kiplinger’s A Step Ahead newsletter readers, 61% of those surveyed said the main reason they rent a storage unit is a lack of space at home.

Furniture was the most commonly stored item at 72%, followed by seasonal decorations at 61% and sentimental items at 50%.

Still, storage only makes sense for certain items. Before renting a unit, think carefully about what you truly need to keep and whether the monthly cost is worth it. These 10 items tend to be some of the best choices for storage.

Furniture and household overflow

Sofas, tables, bed frames and spare mattresses are all big, bulky items that you can put into storage.

If you’re downsizing your home, preparing to move or rotating decor in your home, putting these items in storage can give you extra space while letting you swap favorite pieces in and out when you want a different look.

Before storing fabric items like couches and mattresses, cover them with furniture covers, sheets or breathable plastic wrap to help protect them from mildew, musty smells, dust and pests while they’re in storage.

Many basic furniture covers cost less than $20 and can help keep your items in better condition over time.

Seasonal decor and holiday items

Consider putting seasonal decor and holiday items, like artificial trees, inflatables and specialty decorations, into a self-storage unit. When you only use these items a few months out of the year, storing them can help reduce clutter in your everyday living space.

Clear plastic totes can make storage much easier since you can quickly see what’s inside without opening every box. Add simple labels to each tote so your holiday and seasonal items are easy to grab and go when you need them.

For bulky items you don’t want ruined, like wreaths, tree skirts or oversized decor, large clear zippered storage bags can help protect them from dust, moisture and damage.

A little planning can cut down on trips to your storage unit, too. When you drop off one season’s decor, pick up the next season’s items during the same trip.

Clothing and wardrobe overflow

A storage unit can be excellent for your overflow clothing items. You can store off-season clothes, like bulky coats and specialty items, until you need them, freeing up closet space.

Wash and fully dry the clothes before you store them, and use wardrobe boxes for any items that are usually hung. Be sure to invest in proper storage for clothes. These plastic storage bins are great for items like T-shirts and pants. Include some cedar chips or blocks to help repel insects.

Sports and outdoor equipment

Outdoor equipment like bikes, skis, golf clubs and camping gear take up a lot of space in your home, so consider putting these items in storage. While these items are bulky, if you use them regularly, you can probably justify the cost of storing them.

To keep everything organized and easy to grab, consider using a bike rack or rolling sports storage cart inside your unit. Keeping gear upright and grouped together can help prevent damage and make it easier to quickly load up for your next outing.

Business inventory and side hustle supplies

If you're running a business or side hustle, supplies like inventory, packaging materials, and tools can quickly take up space in your home.

A storage unit can be a good place for these essentials, and you can periodically draw down from your supply and bring home what you’ll need for the coming month or two.

Self-storage can be especially helpful if you run an eBay or Etsy shop or operate a small business from home. Keeping inventory, packaging supplies and seasonal products in storage can free up valuable living space while helping you stay more organized.

In some cases, you may also be able to deduct the cost of a storage unit used for business purposes on your taxes, so keep receipts and track your expenses throughout the year.

Documents and records (stored the right way)

You can declutter those documents and records you're storing at home by moving them to a self-storage facility, freeing up space in desks, drawers and filing cabinets.

Just make sure that you store documents and records the right way. Invest in quality document containers that will protect the paperwork inside in case of a flood.

Avoid storing any items that are irreplaceable or treasured. Consider digitizing documents so you can shred the paper copies entirely.

Durable collectibles and media

If you have durable collectibles, like books, vinyl and decor collections, you may be able to move these items to storage. Focus on choosing items that won't degrade easily, and pack them in sealable containers to help protect them from damage.

You may want to invest in a climate-controlled storage unit to help protect the items. If you'll be storing anything valuable, look for a facility with strong security measures, including security cameras and gated access.

Vehicles and large equipment

You can also rent space for cars, motorcycles, and lawn equipment, leaving your driveway and yard looking neater. Many storage facilities allow you to store vehicles in drive-up units, but be sure to verify the facility's rules ahead of time.

Keeping vehicles under a car cover can help preserve them while not in use, prolonging their life and helping maintain their value.

If you need to store tires independently of a vehicle, that can be a different story; tires are flammable, so they're usually prohibited. That said, facilities that let you store vehicles will usually let you store the vehicles with their tires on them, but you can't store extra, separate tires.

Appliances

If you’re in between moves, remodeling your home or planning a future upgrade, it might make sense to keep your current appliances instead of rushing to replace them. Storing appliances can save you the cost of buying new ones while temporarily getting these bulky items out of your home.

Before placing appliances into storage, clean and fully dry them to help prevent mold, mildew and odors from building up over time. Leaving appliance doors slightly cracked can also help improve airflow while they’re stored.

Kids’ items you plan to reuse

As the children in your life outgrow items like baby gear, toys and furniture, you may want to place some of those items into storage if you plan to reuse them in the future. Storing practical items like bassinets, high chairs, seasonal clothing and durable toys can save money if you expect to need them again for another child or grandchild.

Before storing children’s items, clean and dry everything thoroughly and place smaller pieces in labeled bins so they’re easier to find later. Be selective about what you keep, though.

Some products, including car seats, cribs and certain baby gear, can expire or fall out of current safety standards over time, making them better candidates for donation or disposal instead of long-term storage.

Storage makes sense when it solves a space problem — not when it delays a decision

Storage units can make sense when you use them for seasonal, bulky or high-value items that you'll use again. But it’s easy to fall into the trap of paying a storage fee month after month to hold onto things that you don't need.

If you're storing items that you truly no longer need, the cost can quietly add up and outweigh the benefit. Be strategic about what you decide to store and balance storing items with donating the things you won't use again.

Related Content

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A home sale falling through can be frustrating and discouraging, especially after you've already started planning your next move. With homes sitting longer on the market and more deals falling through due to financing hiccups, inspection surprises or buyer cold feet, many sellers are finding themselves back at square one.

But relisting isn't just about putting your home back online and hoping for a better outcome. In today's market, buyers are more cautious, and listings get scrutinized quickly. The good news?

A thoughtful reset can put you back in a strong position. Here's how to relist your home strategically and improve your odds of getting to the closing table this time.

Why relisting without changes rarely works

It's tempting to relist your home exactly as it was and wait for a different buyer. But most of the time, that approach backfires.

Buyers (and their agents) can see a property's history through the multiple listing service (MLS), including how long it was on the market and any price changes. If your home returns to the market unchanged, it can raise red flags, making people wonder what went wrong the first time. Instead of a simple relaunch, think of your relisting as a reset.

That means addressing past issues, adjusting your strategy and presenting the home in a fresh way.

Start with a post-mortem on what went wrong

Before you relist, take a step back and assess what caused the deal to fall through.

Common reasons can include:

• Financing issues or loan denials
• Low appraisal values
• Inspection problems
• Buyer remorse or contingency withdrawals

Talk with your agent and review feedback from showings, inspection reports and the buyer’s objections. This step is key because new buyers will likely ask the same question: Why didn’t it sell?

Having a clear, honest answer along with proof that you've addressed any issues can build trust and prevent repeat problems.

Use the Bankrate tool below to explore and compare some of today's top mortgage offers:

Reset your price for today's market

One of the biggest mistakes sellers make when relisting is sticking too closely to their original price, even when the market has clearly shifted. If your home didn't sell the first time, pricing is one of the first areas to revisit.

Start by looking at what's happening right now, not when you first listed. Are similar homes reducing their prices? Are new listings coming in lower to attract attention? Even small changes in interest rates or buyer demand can impact what buyers are willing (and able) to pay.

When a home is relisted, a strategic price adjustment is often key to success. That doesn’t always mean a drastic cut, but it does mean pricing with intention. For example, listing just below a common search threshold, like $399,000 instead of $405,000, can help your home appear in more buyer searches and generate fresh interest.

It’s also important to think in terms of momentum. A well-priced home can attract multiple showings quickly, which may lead to stronger offers and better negotiating power.

On the flip side, pricing too high can cause your listing to sit again, reinforcing the perception that something is off.

Fix the issues that killed the deal

If an inspection derailed your previous sale, don't ignore it. Address known issues upfront, whether that's repairing a roof, updating electrical systems or resolving plumbing concerns.

You may also want to consider a pre-listing inspection so there are fewer surprises this time around.

Being proactive helps reduce the risk of another deal falling through and gives buyers more confidence when making an offer.

Refresh how the home shows online and in person

When you relist, your goal is to make the home feel new again, especially to buyers who may have already seen it before.

Start with your online presence. Updated, high-quality photos can make a big difference, particularly if your original listing had poor lighting or didn’t highlight your home’s best features. Small tweaks like brighter rooms, cleaner spaces and better angles can completely change how the home is perceived in search results.

From there, focus on the in-person experience. Decluttering, light staging and simple upgrades like fresh paint or landscaping can help buyers picture themselves living in the space. Even minor improvements can shift a buyer’s first impression from "this needs work" to "this feels move-in ready."

Consider switching agents or strategy

If your home didn’t sell the first time, it’s worth taking an honest look at your approach, and that includes your agent. A different agent can bring a fresh perspective, especially one who has experience relisting homes or handling expired listings. They may suggest a different pricing strategy, new marketing channels or ways to better position your home against current competition.

Even if you stick with the same agent, your strategy should evolve. That might include rewriting the listing description, expanding marketing efforts (like social media or targeted ads) or adjusting how showings are scheduled and managed.

How to get to the closing table this time

Once you accept an offer, the focus shifts to protecting the deal all the way through closing which is something that's become more important as more transactions fall apart.

Start by looking closely at the buyer's financial strength. A strong pre-approval, a solid down payment and fewer contingencies can reduce the risk of delays or cancellations.

From there, stay engaged during key milestones. Be responsive during the inspection process, open to reasonable repair requests and be prepared for potential appraisal gaps. Flexibility can go a long way in keeping negotiations on track.

Finally, keep communication open between all parties, including your agent, the buyer’s agent and the lender. Many deals fall through due to avoidable misunderstandings or slow responses.

The smoother you can make the process, the better your chances of making it to the finish line this time.

A failed home sale can feel discouraging, but it’s increasingly common in today’s market. The upside? Relisting gives you a second chance to correct course. With the right mix of pricing, presentation and strategy, you can turn a setback into a successful sale.

Related Content:

• We’re New Yorkers With $3.8M. We Plan to Retire in South Carolina, but My Wife Worries We Will Regret It
• How the Federal Reserve Affects Mortgage Rates — and What It Means for Homebuyers in 2026
• Property Tax 101: What Every Homeowner Needs to Know in 2026

The Federal Reserve left interest rates unchanged at its June meeting. Looking ahead, don't expect a rate cut anytime soon, either. CME FedWatch projects the Fed is likely to keep rates steady again at its July meeting.

The concern about elevated inflation risks, stemming from higher oil costs, suggests that long-term interest rates will likely remain high, as noted by David Payne of the Kiplinger Letter. Even with a resolution for the Iranian conflict, prices won't drop overnight.

For consumers, the Fed's decision has mixed impacts. While it helps savers by keeping annual percentage yields (APYs) higher on savings accounts, it poses a challenge for those carrying debt or needing to borrow for upcoming purchases. I'll explain how this policy can increase borrowing costs, as well as ways to borrow money and avoid higher rates.

How the Fed's decision impacts your credit card APRs, auto loans

The Fed's decision has different implications, depending on the kind of credit you have/want. To illustrate, the annual percentage rate (APR) on credit cards is directly tied to the prime rate.

What is the prime rate? It's the benchmark that banks use to determine how much customers pay for lending products, such as credit cards, auto or personal loans. Since the prime rate is set at the federal funds rate plus 3%, no movement means credit card rates will remain high.

The current average APR on credit cards is 19.56%, per Bankrate. This means if you're carrying a balance of $10,000 and you only make the minimum payment, of around $225, it will take you 81 months to pay it off. It can lead to a hidden cost of more than $8,000 in interest, almost doubling the balance owed.

Meanwhile, lenders will use the prime rate as part of determining the rate you'll pay on an auto loan. If the Fed raised interest rates, it would increase the APR you'll pay for car financing, which could add hundreds to thousands more in total loan costs.

Other factors will also shape what you pay. Your credit score plays a major role, along with the vehicle itself (its make, model and age) and the length of your loan term, all of which lenders use to determine your final rate and total cost.

Does Fed policy impact mortgage rates?

Not directly, as with auto loans or credit cards, but it does play a small part. For longer-term loans, such as fixed-rate mortgages, the 10-year Treasury yield is a better indicator of what you'll pay.

As its name implies, this yield is the government's borrowing cost for a decade. It's a better benchmark because the average homeowner stays in their home around that long, or they'll refinance somewhere along the way.

Who or what influences the yield? Primarily, it's investors who buy mortgage-backed securities. Their expectations on short-term interest rates have an impact because risks are elevated with longer-term investments.

Furthermore, other factors could influence the yield. When inflation becomes higher, as it is now, the 10-year Treasury yield rises. Inflation is currently 4.45%, showing investors are worried about how gas prices will impact the economy.

Another factor is economic policies. When the Fed sets the federal funds rate, it can give investors a window into the future. Holding rates steady could lead to a murky future, in which a wait-and-see approach is best. When confidence in the economy wanes, investors might require higher rates to feel comfortable with their risk.

Is now a smart time to borrow money?

It will be more expensive, but there are things you can do to lower your borrowing costs, depending on your situation:

If you're carrying high-interest debt

With everyday prices rising, it's common for some borrowers to pay the minimum each month. It's frustrating because even though you're making a payment, it doesn't make a dent in your balance.

This is where transferring that debt to a balance transfer credit card with 0% APR can help. Some cards offer generous 0% APR periods of up to 21 months, giving you almost two years to pay down that balance.

There are a few things to consider before taking this approach: Transferring your balance isn't free; usually, lenders charge 3% to 5% of the balance. Some of these cards come with annual fees, which can also take away from your ability to pay off your debt more quickly.

If you decide to go with this approach, I recommend paying as much as you can each month, which can significantly reduce your debt before the introductory period ends. You'll save in interest and take years off your debt repayment. If you have other debts, this can build momentum to help you tackle them next.

You need to make a bigger purchase, but don't have the cash

If you have an immediate need and don't have the cash on hand, it makes sense to consider credit. But there are smarter approaches than using whatever credit card is in your wallet.

To demonstrate, I don't usually recommend store credit cards. They come with sky-high APRs, but if you shop at the same store regularly (Costco, Lowe's, etc.), you might be missing out on some really sweet card perks.

To demonstrate, Costco's Anywhere Visa by Citi offers 5% back on the first $7,000 charged at Costco gas stations. You'll also earn 2% back on Costco purchases. We made this switch because it allowed us to earn cash back on larger purchases and save on everyday costs, such as gas, prescriptions and groceries.

Other store credit cards offer generous interest-free promotional periods from six months to a year. I use these when buying larger appliances. As long as you pay it off within that promotional window, you won't have to incur the higher interest rates.

That said, if your purchase isn't urgent, it might be worth taking a step back and saving first. Even setting aside a portion of the cost can make a difference. Every dollar you pay upfront is one less you'll finance, helping reduce your total interest costs.

One simple way to do this is to treat your savings like a monthly bill. Set aside a fixed amount in your budget and transfer it from your checking account into a high-yield savings account. This creates a consistent habit while allowing your money to grow, with some accounts offering rates up to 4.20% APY.

Use the Bankrate tool below to find the best fit for your needs:

How to use the Fed's decision to your advantage

Ultimately, the Federal Reserve holding rates steady is good news if you’re focused on building savings. But if you’re carrying debt or planning a large purchase, borrowing costs will remain elevated.

To manage that, consider using promotional financing offers, transferring balances to cards with 0% introductory APR periods or delaying the purchase and saving in a high-yield account to take advantage of today’s higher rates while you work toward your goal.

Related content

• How the Federal Reserve Affects Mortgage Rates — and What It Means for Homebuyers in 2026
• After the Fed Meeting, 7 High-Yield Savings Accounts Worth Your While
• Kiplinger Interest Rates Outlook: Long-term Rates to Remain Elevated as Long as Oil Prices Cause Inflation Risk

Question: We’re New Yorkers retiring with $3.8 million and considering a move to South Carolina for better weather and lower taxes. We can sell our $1.3 million home and buy a similar one for $600K. My wife worries about missing our family, rebuilding a social life and making friends. I think we will be fine. Am I being unrealistic?

Answer: New York can be a great place to raise a family and launch a successful career. But it can also be an expensive place for retirees.

With a top tax rate of 10.9% and just a small pension exclusion, it can be difficult to maintain a comfortable lifestyle in New York without the promise of a large salary. (For more on New York taxes, read our New York Tax Guide.) Unsurprisingly, New York is one of the top states people moved out of in 2025, according to a United Van Lines study.

South Carolina, meanwhile, was one of the top states people moved to in that same report. If you're a pair of New Yorkers with a $3.8 million nest egg, you might be contemplating a retirement move to South Carolina. Even though you have a lot of money to work with, your savings could easily get eaten up by high income taxes, property taxes and, depending on your ZIP code, local taxes.

If you have a home worth $1.3 million, you might easily find a similar one for much less in South Carolina, where real estate remains more affordable. That change could allow you to pocket your equity and further pad your savings.

It's also pretty easy to make the case that winters in South Carolina are much milder than those in New York. That alone could be a draw.

If you're eager to make a move but your wife is hesitant because you don't have much of a social network there, that's understandable. While it's good to be positive and assume you'll make friends, it's a valid concern on her part. Here's how to navigate it.

Don't overlook the social aspect

During your working years, your job can serve as a social outlet. In retirement, you lose that. If you're relocating to an area where you don't know many or any people, it can be daunting at a time of life when you might crave social interaction more than ever.

Gil Baumgarten, founder and president of Segment Wealth Management, says that in this situation, "The math likely works, but the social implications loom large."

On the one hand, Baumgarten points out, people don't always see their closest friends that often. "Calling or FaceTiming can surely close the gap of geographic separation," he says.

Family, however, gets more complex.

"There is no real replacement for cuddling the grandkids on the couch or the glee they express when Grandma or Grandpa walks in the room," Baumgarten says.

While many families navigate this well when the kids move away, and the situation is reversed, he says, you might not realize how difficult it is to be away from loved ones until you try it. This might hold true even if you manage to build a nice circle of friends in your new neighborhood.

If you put yourself out there, you might make friends quickly

If moving means being far from family, that's something you'll need to reconcile. But you might not have to be as concerned about building a new social circle.

As Chuck Czajka, founder of Macro Money Concepts, insists, "Having established friendships where you’re moving to in retirement is not a necessity."

"In retirement, it’s likely you’ll participate in several social activities, so finding friends shouldn’t be an issue," Czajka explains.

He also says that if you're deliberately chasing better weather, that could lead to more activities, whether it's boating, tennis, pickleball, golf or something else.

"My advice is not to worry. Friends will come as long as you’re active in the retirement community," Czajka says.

It pays to test the waters first

If social concerns are stopping your wife from embracing a move to South Carolina, you might want to do a trial run before diving in, says Elias Friedman, founder and senior wealth adviser at Kadima Wealth

"I have had many clients in this situation," he explains. "Clients become tired of long winters, high taxes…and like the idea of 'cashing in their chips' to find a less expensive and warm place to live."

At the same time, Friedman says it's a good idea to try one or two seasons in a new location before committing to a move. Not only that, but he thinks it's a good idea to experience different locations for a point of comparison.

"Try not only South Carolina or Florida but Tennessee, Arizona and maybe even Nevada," he suggests. "These places offer warm weather, lower taxes than New York, and most importantly, have many people like these New York clients relocating there."

While you're considering these locations, find out if your "tribe" of friends is retiring to one state or city, and check that, too.

Friedman also says you might want to approach your move like you would a series of college visits.

"Find a number of towns in a few states," he says. "Do the research ahead of time to narrow down the list to ones that offer you the things that interest you the most, like weather, recreational activities, houses of worship, and health care providers." From there, you can do a series of long-term stays, rank your visits, and make a decision.

If spending an entire season, or several seasons, in a new neighborhood as a trial run isn't feasible, Baumgarten says, "Get an Airbnb for a month in your desired location and test out the situation."

Not only might living in a new neighborhood on a short-term basis allow you to start building local relationships, but you can most likely get a sense of the vibe. If people seem friendly and there's no shortage of activities and resources for people in your situation, then you might feel more comfortable making a move — especially if you go in with the attitude that you're going to put yourselves out there to build a social network and make your new location work.

Read More

• Best Places to Retire in the US
• 13 States With No Retirement Tax Ranked by How Much You Need to 'Retire Comfortably'
• We're 67 With $5.8 Million. I Want to Spend $300K on Home Renovations and a New Car. My Wife Is Nervous About Spending So Much.
• We Retired at 70 With $4.3 Million. My Wife Won't Spend 'Our Grandkids' Inheritance,' but I Want to Travel.

If you've dreamed of a move to North Carolina, now might be the time. Beyond the excitement of the spring homebuying season, the Tarheel State is currently offering a significant financial boost to help residents plant roots.

The NC 1st Home Advantage Down Payment program gives first-time home buyers and veterans access to homes priced up to $495,000 with a major perk: $15,000 in down payment assistance.

The catch? Well, the 0% interest, deferred second mortgage is only forgiven over 15 years. If you move out before the full amount is forgiven, you might be on the hook for paying back the loan — and any taxes owed.

We'll break down exactly how this program works, the eligibility requirements you need to know, and the tax implications of a North Carolina forgivable home loan to help you determine whether it's right for you.

The $15,000 NC 1st Home Advantage Down Payment

The NC 1st Home Advantage Down Payment program is designed to bridge the gap between rising home prices and local salaries. The program acts as a $15,000 second mortgage at 0% interest, but the deferred loan is only forgiven over time.

Here's how the program's loan forgiveness works in 2026:

• Years one to 10: You owe the full $15,000 if you sell or move.
• Years 11 to 15: The loan is forgiven at a rate of 20% per year.
• After year 15: The debt is completely forgiven.

North Carolina first-time home buyers qualify in 2026

To qualify for the NC 1st Home Advantage Down Payment, you must enter into a 30-year fixed-rate mortgage (FHA, VA, USDA or conventional). 15-year terms are ineligible.

You must also meet certain criteria across four categories:

• Buyer status. You must be a first-time homebuyer (haven't owned a primary residence in 3 years) or a U.S. military veteran.
• Credit score. A minimum score of 640 is required (660 for manufactured homes).
• Property value. The home price must generally be under $495,000.
• Income limits. Your annual income must fall under the amount listed for your area and the number of people in your household.

What does the last bullet mean? Let's look at an example.

Suppose you buy a home in Wake County for you, your spouse and a child; according to the NC Housing Finance Agency (NCHFA), your annual income must be under $152,000.

Meanwhile, if you buy a home in Granville County for just yourself, your income must be under $114,000 to qualify for the NC 1st Home Advantage Down Payment.

You can use the NCHFA's online search tool to see if your household income qualifies in your desired area. Income limits are typically adjusted for inflation each summer.

Taxes on your new NC home loan

The IRS generally doesn't treat state-led forgivable down payment assistance as taxable income.

• This means you'll likely owe no additional taxes on your federal return with a NC 1st Home Advantage Down Payment.
• And most states, including North Carolina, exclude state-led housing assistance from state taxable income.
• However, if you sell the home before the 15 years are up, you might owe federal taxes on the canceled debt or home sale. You'll also need to repay the outstanding loan amount to the NCHFA.

Eligible property types and property tax relief

To be eligible for the NC 1st Home Advantage Down Payment, your house must be one of the following types:

• Single-family homes
• Townhouses
• Condominiums
• Manufactured homes

But if you're a new homebuyer (like most who qualify for this program), you might be feeling anxious about paying property taxes. However, several federal homeowner and homebuyer tax breaks in 2026 could help ease that burden.

• The state and local tax (SALT) deduction for itemized filers. This tax break allows you to deduct property tax and state income tax up to $40,400 in 2026, and might be particularly significant for those who buy in high-tax areas like Chapel Hill or Raleigh.
• Capital gains exclusion when selling your home. Although you're locked into a 15-year stay under the NC 1st Home Advantage Down Payment program, once it's time to move, your house sale could qualify for up to $250,000 (per individual) in federally tax-exempt gains.

Tax savings with a mortgage credit certificate

For further savings, you might also be eligible to claim the North Carolina Home Advantage Tax Credit (PDF).

This is a mortgage credit certificate (MCC) that allows you to claim 30% to 50% of your annual mortgage interest (up to $2,000) as a direct tax credit on your federal taxes.

It's available every year you live in the home as your primary residence until your loan is paid off. However, as with the home advantage loan, you must apply for this financial incentive before closing on your home.

How to start the North Carolina home affordability loan process

No government office appointment is needed for the NC 1st Home Advantage Down Payment. You can apply through participating private lenders (banks and mortgage companies) in North Carolina. Here are the steps:

1. Find a lender. Search the NCHFA website for "preferred lenders" in your North Carolina county.
2. Get pre-approved. Tell the lender specifically that you want to use the NC 1st Home Advantage Down Payment.
3. Lock the rate. The NCHFA sets the interest rates for these loans daily, so ensure you get a competitive market rate.

If you're unable to locate a lender in your area, call the NCHFA at 1-800-393-0988 and ask to speak to the Home Ownership department for assistance.

More NC affordable home loan programs

While the NC 1st Home Advantage Down Payment is one route to potential North Carolina home affordability, it isn't the only way to save. The Tarheel State offers other paths to homebuying depending on your credit score, income level, and location.

• The NC Home Advantage Mortgage™ provides up to 3% down payment assistance for FHA, USDA, VA or conventional loans. You don't have to be a first-time homebuyer to qualify, but credit score minimums apply.
• Community Partners Loan Pool (CPLP). Designed for low or moderate-income households, the CPLP provides up to 25% of the sales price (capped at $50,000) in subordinate financing.
• Location-specific home loan assistance programs in different areas can help you afford a North Carolina home. A couple of examples include the Enhanced Homebuyer Assistance Program, worth up to $60,000 for certain areas in Raleigh, and the HouseCharlotte Program, for homebuyers in Charlotte.

Be sure to read all eligibility requirements before applying for these loan programs. You can visit the NCHFA website for more information on the NC Home Advantage Mortgage™ and the CPLP.

Read More on NC

• 10 Cheapest Places to Live in North Carolina
• North Carolina Tax Guide
• Your North Carolina Income Tax Cut Is Coming

Editor's note: This is the fourth article in a five-part series about all-asset retirement planning that is covering such topics as using lifetime annuities and housing wealth, making the most of tax benefits and managing investment portfolio risk. The first articles are: It's Time to Redefine Retirement for Retirees With $500,000 to $5 Million, Unlock Housing Wealth and Tax Benefits by Adding Lifetime Annuities to Your Retirement Plan and Does Your Retirement Plan Ignore Half of Your Net Worth?

So many details factor into retirement planning: Income needs, how much to leave to heirs, protection against long-term care costs and, just as important, leisure and travel.

And then there are taxes.

Don't read this article for advice on avoidance. Taxes must be paid. You can exert some control over how much you pay, however, and when you pay them.

In the first three articles of this series, we've talked about the components of a successful retirement plan and the Three L's — Lifetime Income, Liquid Savings and Legacy — retirees are trying to achieve.

Of course, the success of any plan is very much determined by factors outside your control — tax laws and regulations, market volatility and your health and related expenses. We've tried to address the last with a new source of liquid savings in the form of HomeEquity2Income. The next article will address how to protect your plan against market shocks.

Here we'll address the impact of taxes on the Three L's — and how to take advantage of any tax breaks in the law, especially for income.

Detailed analysis of taxation of income

First, let's look in more detail at how retirement plan income is taxed, including where taxes can be deferred and how rollover IRA and personal savings compare as sources of income and tax.

Here are the income items that make up our plans, listed by tax efficiency:

Every retiree may not enjoy the tax advantages of each income source, but understanding what is available and how they work, separately and together, helps with planning. When we discuss legacy-related taxes later in the article, remember these income advantages, too.

Income tax objectives and measures

While there are planning models that can simulate a tax return, none, according to our research, can actually "optimize" results. The tricky part may be to prepare the correct set of more limited objectives.

Here are several measures of tax effects we'll use in this article:

• Income tax rates at start and at age 85
• Before and after-tax return on investment (ROI)
• Percentage tax cost: Difference between before- and after-tax ROI

Because certain tax rules and our planning models use age 85 as a pivot point, in calculating the ROI, we assume consistent tax rates from the start date to age 84 and from age 85 to 95. We use the percentage tax cost in measuring the impact of taxes on all-asset planning models vs. traditional Investment-only planning.

The challenge is to create a plan that meets, as best it can, the Three L's on a before-tax basis and to make sure that the specific allocations and elections don't take away that advantage on an after-tax basis.

Income tax analysis for a sample investor

To show how all the pieces above fit together, we built an All-Assets Plan for a sample investor, a 67-year-old man with $1 million in each of these three buckets: Rollover IRA, personal savings and value of the house.

Set out below is a detailed analysis of the first-year tax.

You will see there is a large amount of "safe" income in this plan, or income that is not affected by the sale of an asset, and therefore is something you can count on despite market fluctuations. In this plan, only $47,000 of IRA withdrawals out of $167,000, or 28%, require that assets be sold to generate the income.

Further, the chart is based on standard deductions, which our investor is assured of. In periods of high health-related expenses or inflation on property taxes, for instance, our investor might be able to itemize and create a larger tax deduction.

The payoff is that for this "safe" plan, the taxes represent an average of 9.0% of total income. (Note that this rate will not apply to the lifetime of a plan. The rate will vary from year to year and will increase at age 85, barring any large increase in deductible expenses.)

Compare to a traditional investment-only plan

In a traditional Investment-only plan, with no lifetime annuities and no housing wealth, the following work against tax efficiency:

• Only uses investment products without special tax benefits
• Higher allocation to fixed income portfolio with interest that is fully taxed
• No allocation to "safe" lifetime annuities and no benefit from tax incentives
• No tax-free HECM drawdowns to supplement income
• Greater need for withdrawals from IRA to generate income

Under this approach, there is a greater need for Roth conversions, which create their own tax breaks by first incurring taxable conversions.

In the investment-only plan, here are the key first-year results:

• First-year income is lower at $140,000 vs $167,000
• First-year tax rate is higher at 16.4% vs 9.0%

Extending an All-Assets Plan to age 85

While the income advantage for the All-Asset Plan continues for the early retirement years, most of that tax advantage reverses itself at age 85 when certain tax breaks end. Using the same methodology as above, the tax rate goes up as the tax-deferred benefits end.

However, the income amounts go up as well, particularly QLAC, and thus there's more income from that source — again pushing out the time for withdrawals.

At 85, the All-Asset Plan develops income of $238,000 and an estimated tax rate of 17.1%. The traditional investment-only plan income at 85 is $200,000 with an 18.5% estimated tax rate.

In the All-Asset Plan, we also provide for QLAC reserve income to pay for either the higher deductible expenses, taxes or both.

Tax analysis of legacy savings

Most of the tax attention above has appropriately been on income, particularly in the early retirement years. However, the amount paid out at passing (legacy), should get your attention as follows:

• Housing wealth. Step-up in basis of the value of the original home at passing
• Sale of house. Tax paid at sale, with some significant deductions
• Personal savings. Step-up in basis at passing
• Rollover IRA. Taxable at 100%
• Roth IRA. Not taxable

As we've written about before, aging in place — if it can avoid the sale of your house — can be a huge tax benefit.

Comparison of an All-Asset Plan to traditional investment-only

To put both the income and legacy elements together, we use the ROI as a measure of the economic return, considering both before- and after-tax income and legacy. Here's the summary between all-assets and investment-only planning.

In its simplest terms, you can save money when you take into account how taxes affect your retirement. Bottom line, the tax-cost advantage of an All-Asset Plan vs a traditional investment-only plan as measured here is .7%. That seems small, but not when compared with, say, advisory fees in the .5% to 1% range.

Housing wealth, personal savings and even Social Security benefits offer potential tax deferrals and savings. When creating a retirement plan, think about other tax benefits, such as deferring certain taxable events.

The tax code offers certain tax breaks that can improve your retirement outcomes. It's up to me and others in the advisory space to point you to these advantages. As a next step, visit Go2Income, answer a few questions about your current income and future needs and start creating your own plan to grow your retirement income and liquid savings.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

I've been getting a lot of calls lately that start the same way: "Dan, I'm done."

• Done with the volatility of their stock investments
• Done watching their portfolio swing wildly because oil prices are soaring through the roof
• Done refreshing their brokerage app at 7 a.m. and feeling their stomach drop before their morning coffee goes cold

If this sounds familiar, keep reading because what I'm about to share could turn a very bad beginning to spring into the starting point of a very smart financial move.

What's happening right now

It's been a wild ride, to put it politely. Just a few weeks ago, the market was looking wobbly, and certain sectors really got hammered. Since the Iran conflict erupted at the end of February, oil prices surged past $100 a barrel, peaking at $117 before settling back in the mid- to high-$90s.

The ripple effects were equally devastating for equities. The S&P 500 posted six straight weeks of decline. The Nasdaq and the Dow both entered correction territory, down more than 10% from their recent highs.

The market has rallied nicely since then, but the warning signs are still ominous.

JPMorgan initially slashed its year-end S&P target. Moody's recession model is at 49%, and that was calculated before the worst part of the energy shock hit.

Individual stocks look even worse. Take Tesla (TSLA): It hit nearly $499 in December and dropped to about $390 — a fall of about 22%.

Investors who bought during the AI-driven hype of late 2025 are now in the red and trying to sell.

And Tesla's not alone. Tech heavyweights across the board are bleeding, and the energy crisis is squeezing consumer-facing companies from every direction.

But here's what most panicked investors don't stop and consider: Even after a brutal decline of 20% or more, many long-term stockholders are still sitting on substantial gains. You might have bought Tesla at $180 during the spring 2025 dip, and it's now at $390 instead of $500.

You're down from the peak, sure, but you're still sitting on a hefty gain the IRS would love to tax the moment you sell.

So, the question becomes: How do you get out of the market without getting crushed by capital gains taxes on the way out the door?

The exit ramp most stock investors don't know about

This is where Qualified Opportunity Zones come in, and it's a strategy that most stock investors have never heard of, not least because the financial world tends to talk about QOZs in real estate circles, not on CNBC.

Here's how it works right now, under the rules in play today. When you sell your stock, you'll owe capital gains taxes on the profit. But if you take those capital gains and reinvest them in a Qualified Opportunity Fund within 180 days, two powerful things happen:

First, the tax on your original gain gets deferred until December 31, 2026. That's the current deadline. You don't pay it this spring; the bill comes due when you file your 2026 taxes in April 2027.

If you're selling stock today (in late April), you've got until late October to deploy those gains into a QOF and lock in the deferral. That's six months to make a smart, deliberate decision, not a panicked one.

Second — and this is the part that makes people put their coffee down — any new appreciation on your Opportunity Zone investment is completely tax-free if you hold it for at least 10 years. Not tax-deferred, tax-free.

The growth is yours, and the IRS doesn't get a cut. That's the crown jewel of this program — it's fully intact, and it isn't going anywhere.

Why this matters now

The timing is almost uncanny. You've got a stock market that's given millions of investors a reason to sell. You've got an Opportunity Zone program that's still offering its most powerful benefit. And you've got a 180-day window that's wide open for anyone selling right now.

Let me paint a picture. Say you sell $1 million in stock and realize $400,000 in capital gains. Without any planning, you're looking at a tax bill north of $100,000 between federal, state and net investment income taxes (NIIT). That's money gone.

But if you invest that $400,000 into a QOF within 180 days, you defer the tax on that gain until the end of 2026, and every dollar of new appreciation from the QOZ investment itself can be tax-free after a decade.

You've taken a market crisis and turned it into a long-term tax advantage.

Meanwhile, your money moves out of the stock market and into tangible real estate in communities poised for growth. You can see it. You can drive by it. It doesn't vanish because someone launched a missile through the Strait of Hormuz before the opening bell.

A few things to keep in mind

This isn't a silver bullet, and I always want to be straight with you about that. Opportunity Zone investments are illiquid and long term. You should be comfortable locking up your capital for a decade or more to get the full benefit.

Not every QOF is created equally; the quality of the fund, the sponsor, the underlying real estate and the geographic market all matter enormously.

And you'll need a team that knows how to evaluate these investments, because the due diligence on a QOF is very different from picking a stock.

You should also be aware that the deferral period is shorter than it was before — gains invested now will be recognized by the end of 2026, regardless. But the 10-year elimination of capital gains on new appreciation is the benefit you're really playing for, and it's as powerful today as it was the day the program launched.

What I'd do if I were you

If your portfolio has taken a beating and you're thinking about selling, don't just sell and write the check to the IRS. Not yet. Pick up the phone first. Let's look at what gains you're still carrying, what your timeline looks like and what makes sense for your specific situation.

The market gave you a wake-up call. What you do next is up to you.

Book a strategy call with our team at Provident1031.com, or call us directly at (281) 466-4843, Ext. 100. If you want to educate yourself first, our Qualified Opportunity Zones Masterclass walks you through everything — the tax benefits, the risks, the due diligence process and real examples of how investors are using this strategy right now.

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• I'm a Real Estate Investing Pro: This High-Performance Investment Vehicle Can Move Your Wealth Up a Gear
• A Compelling Case for Why Property Investing Reigns Supreme, From a Real Estate Investing Pro
• 2026's Tax Trifecta: The Rural OZ Bonus and Your Month-by-Month Execution Calendar

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

While the market is improving, millennials and Gen-Zers have faced a difficult path to homeownership.

For the first time in modern history, these two generations are among the first to be financially worse off than their parents at the same stage of life. Factors such as record-high home prices, lingering inflation and mounting debt, specifically from student loans and credit cards, have created significant challenges for first-time buyers.

In 2025, nearly 27% of Gen-Zers nationwide owned their homes, according to a report from Axios. That rate nearly doubled for millennials with slightly more than 55% owning their homes. However, both generations are still trailing their parents with nearly 73% of Gen Xers and 80% of baby boomers owning their homes.

As housing affordability continues to be a challenge for many, especially for those who are younger, tapping into a 401(k) retirement plan might seem like a practical option, but there are trade-offs. What needs to be considered before a withdrawal is made?

The hidden cost of limiting compounding growth

Pulling from your retirement account to make a down payment seems logical in theory: You're not retiring for several more years, yet you need a roof over your head today.

However, this thought process doesn't account for the power of compounding growth. When money is withdrawn early, it's not just the principal that disappears. It's also the decades of potential growth that money could have generated by remaining in the account. Assuming a modest average annual return of around 7%, withdrawing around $20,000 from a retirement account at age 30 could mean missing out on more than $130,000 by age 65. That's a significant amount of money that could otherwise be used to supplement medical costs, pay for long-term care or used for additional real estate or traveling.

Once money leaves your retirement account, it no longer has the ability to grow with the rest of your investments.

As a result, retirement savings are often seen as one of the most important "protected" accounts in a portfolio. While the funds can be used to solve a short-term problem, withdrawing them early could create future challenges.

Penalties might be waived, but taxes still apply

Another factor that's easily overlooked is the tax implications of withdrawing retirement funds. Even when early withdrawal penalties are waived, money taken from a 401(k) or IRA will be taxed as part of your income. For the average working American, that tax rate can fall from 18% to 32%. A withdrawal of $20,000 could lead to thousands of dollars owed in taxes.

In addition to a hefty tax bill, money withdrawn from a retirement account loses the benefit of tax-deferred growth, significantly reducing the value of those savings long-term.

Evaluating retirement security vs homeownership

Making the decision to use retirement savings to purchase a home typically comes down to balancing two major financial goals: Retirement security and homeownership.

Becoming a homeowner provides stability and gives you the opportunity to build equity over time. For many Americans, it's also viewed as a significant milestone financially and emotionally.

Simultaneously, retirement savings rely largely on time spent in the market and consistent contributions. As a result of compounding, younger Americans in their 20s and 30s generally benefit the most by starting early and saving consistently.

Using retirement funds prematurely eliminates that chance, which can make it much more difficult to build enough savings long term.

Costs of homeownership extend beyond the mortgage

It's common for first-time homebuyers to focus primarily on saving for a down payment, but homeownership costs much more than the price of the home. Beyond your monthly mortgage payment, you'll also have to pay property taxes, insurance, utilities and maintenance, not to mention any unexpected repairs that are needed such as a new roof, HVAC system or appliance.

Many financial experts recommend running a full financial "stress test." The test calculates the total expected monthly costs, including mortgage payments, taxes, insurance premiums and a maintenance reserve, which allows you to see if homeownership is manageable in your current financial situation.

Other options to consider

Before targeting retirement accounts, first-time buyers should explore other lower-risk alternatives.

One option is to build a dedicated down payment fund by regularly setting aside money from each paycheck. Automating contributions to a separate account can help accelerate the process, while keeping you disciplined. Utilizing tax refunds, bonuses or scaling back discretionary spending can also help grow savings.

Family gifting might also be a possibility. Current tax laws allow a person to give significant amounts each year without triggering gift taxes. This can help supplement any gaps in savings.

Depending on where you live, many states, organizations and housing agencies might offer down-payment assistance through programs such as FHA, VA or USDA. These programs are designed to help buyers break into the housing market without sacrificing long-term savings.

What to consider before making an early retirement-savings withdrawal

For first-time buyers considering pulling retirement funds to help purchase a home, it's worth asking: Does this withdrawal create a gap in my retirement savings that might be difficult to recover from later?

IRAs, 401(k)s and other retirement accounts are specifically designed to grow over decades of time. Once money is taken out, its ability to compound stops.

While buying a home might feel urgent and the benefits can be rewarding, protecting long-term financial security might be the better option.

Most of the time, it's better to borrow for a home instead of taking from your future retirement.

Related Content

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• I Am 55 With a $1.5 Million 401(k). Should I Take a 401(k) Loan to Pay for a Home Improvement Project?
• Considering a 401(k) Loan? What You Can Do Instead
• I'm 61 and need $50,000 for home repairs. Should I borrow, given today's rates, or take a withdrawal from my $950,000 401(k)?
• Applying for a Mortgage Loan? Here's What to Expect

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

On the list of things I hope to someday own, a rental property may just be last.

My parents owned rental properties near a college campus in the early 2000s and through the Global Financial Crisis. I still have nightmares from the maintenance calls that the world's least-handy son was tasked with handling. I'm sure my nightmares pale in comparison to my parents'. Okay, there, my biases have been stated.

This is the question I get all the time: "Should I sell my rental property?" More specifically, "I'm retired or retiring. I don't want to be a landlord. What should I do with this rental property?"

In most markets post-COVID, price appreciation in the real estate market has pushed off that decision. Recently, things have started going the other way.

Here's the back-of-the-envelope math we would use if we had 15 minutes and no technology to answer this question.

Figure out the cap rate

The cap rate is essentially the real estate version of yield: Income divided by property value.

Where things get tricky is figuring out what the income is in this calculation. If you charge $5,000 per month for rent, you don't get $5,000 per month. You have to factor in property taxes, insurance, maintenance and possibly homeowners' associations and property managers.

This assumes there is no mortgage, which is what we will assume for this column.

You take that net income value and divide it by the current market value. This is your cap rate. In high-cost markets or with safer investments, cap rates are lower. In low-cost markets, or for higher-risk properties, they are higher.

You are banking on more capital appreciation if you have a lower cap rate.

I live in the Washington, D.C., metro area, and it is common for me to look at a Schedule E, where income and expenses are reported, and see a very large chunk of the income eaten up by property taxes and maintenance.

Determine what's acceptable for you

As mentioned earlier, we rely heavily on technology to make these decisions. For any property on the balance sheet, we can use a drop-down menu to select a year to sell it and see whether the success meter goes up or down.

The numbers never tell the whole story, but they definitely help. There is a free version of this software you can try.

If you don't want to get too detailed, a 5% cap rate is typically the benchmark I use. There are always going to be exceptions to rules of thumb, but numbers much north or south of 5% tend to be red flags for me.

If you are far below 5%, you are essentially making a bet that the property will appreciate significantly. If the stock market has historically returned around 10% and you are comparing residential real estate with a cap rate of 5%, you would need 5% annual appreciation on top of that to match those returns.

If you have a cap rate of 8%, you need only about 2% to match the returns. This addresses returns but not risk-adjusted returns, which makes the comparison imperfect but useful.

Determine how it will impact your financial plan

Yesterday, I was talking with a friend who derives a large chunk of his monthly income from rental properties. There was a legislative change in Philadelphia that meant that he was losing about 40% of his rental income.

He will be okay, but there is a downstream impact. He will either have to make more money elsewhere or sell those properties.

For many of our clients, these are homes they have owned for 40 years, and selling them won't make or break their financial situation. But it will have a significant impact on their life and on their taxes.

Let's start with the impact on the person's life. A slight reduction in a success rate that comes from selling a property may mean two different things for two different clients.

For Mary, whose kids live all over the world and who has a long list of hobbies, she'd gladly take that reduction for the freedom it will give her. For Sarah, who is a tinkerer and who has always been interested in real estate, she'd rather keep it. We have more clients in the first category.

Tax impacts tend to be negative if you sell, but that's not a good enough reason, alone, to hold on to the property. The tax computation on a rental property sale is complex, and the tax owed is never less than you expect it to be, mostly due to depreciation recapture.

That big deduction you got to take for almost 30 years gets recaptured (taxed) upon sale, in addition to gains on the property. I would recommend you have a CPA or enrolled agent (EA) give you an estimate before you make any big decisions.

If you've read this far, the odds are you don't love being a landlord. Think of the decision as getting out of a long-term relationship you're not happy in.

Unfortunately, breaking up is not that simple. Selling a property is a big decision, often with many commas. I'd run the numbers and make sure that even if you know you'll be happier post-breakup, you'll still be okay financially.

Related Content

• Counting on Real Estate to Fund Your Retirement? Avoid These 3 Costly Mistakes
• Retirees, Create An Emergency Fund for Rental Property
• Seven Costs Landlords Underestimate When Setting Expectations
• Should I Sell or Rent My House When I Relocate for Retirement?
• Do 1031 Exchanges Make Sense for Baby Boomers?

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Many older Americans are feeling deja vu as they watch energy prices rise in response to the Iran conflict. For those who lived through the 1970s and remember the spiraling inflation, soaring energy prices and increasingly unaffordable homes, today's economy looks eerily similar.

Here's a closer look at the parallels between the economy Americans are facing today and the one older generations dealt with over 40 years ago.

Unless otherwise noted, the data for this story came from the Federal Reserve Bank of St. Louis, the Bureau of Labor Statistics and the Census Bureau.

Comparing the economic aftermath of the 1979 Iran oil crisis with the one we're facing now

The 1979 Iran oil crisis came in the midst of a cost-of-living crisis that had gripped the nation for most of the 1970s. The steep drop in oil production following the revolution sent crude oil prices soaring from $14.85 to $39.50 per barrel. Prices didn't drop back into the teens until 1986.

The ripple effects will feel familiar to many Americans: Gas prices soared. Utility bills shot up. Inflation got worse. After topping 11% by 1974, inflation had started to ease, but by 1979 it was back above that level and peaked at 13.5% by 1980.

Fast forward to today, and you can see a similar story unfolding. In December 2025, a barrel of oil was selling for $57.26. By March, that same barrel cost $102.86.

Inflation was already surging before this, shooting from 1.23% in 2020 up to 8% by 2022. After dipping below 3% in 2024, it's now back above that threshold, hitting 3.3% as of March. That's almost a full percentage jump over February, when 12-month inflation was 2.4%.

Energy costs are once again a key driver, and their ripple effects across food, housing and other essentials could keep inflation elevated — even if the conflict stabilizes.

Because the situation is still unfolding, the latest data doesn't yet capture the full impact. To put today's trends in context, I'll compare inflation and affordability across similar windows: the six years between the 1973 and 1979 oil crises, and the six years between the 2020 pandemic and today's energy shock.

Transportation

One of the most immediate impacts of any sudden spike in oil prices is a spike in gas prices. According to the Department of Energy, gas prices averaged $0.67/gallon in 1978. After the 1979 revolution, prices nearly doubled to $1.25 by 1980 and continued climbing from there. After adjusting for inflation, that's equivalent to a jump from $3.54 to $5.31.

Today, we've been fortunate with gas prices prior to this recent spike. After peaking at $5 per gallon in the summer of 2022, they've been falling rapidly in the years since, hitting $2.77 in January.

When the conflict with Iran began in February, however, the price at the pump shot up in a matter of weeks, reaching $4.12 by April. That's a nearly 50% increase between February and April.

Just about every aspect of transportation got more expensive as well. From January 2020 to January 2026, car insurance premiums rose about 28%. That stings, but not as much as the 71% surge between 1973 and 1980.

A new car, on the other hand, is significantly less affordable today than it was in the 1970s. The average price ticked above $50,000 for the first time a few months ago and sits at $51,440 as of February, according to a Kelley Blue Book report.

While it's hard to find historical data showing the industry-wide average price of a new car, we can compare today's costs by looking at a model that's been around since the 1970s, the Honda Civic.

In 1972, the very first Honda 600 had a Manufacturer's Suggested Retail Price (MSRP) of $1,415 (about $11,280 in today's dollars). By 1979, a new Honda Civic was priced at $3,649, a 157% increase over the 1972 model. But that's still just $17,260 in today's dollars.

Today, a 2026 Honda Civic with the lowest cost trim available has an MSRP starting at $24,695. That's 43% more expensive than the same car in 1979, when comparing inflation-adjusted prices.

Overall verdict: The speed of inflation when it comes to gas prices and other costs was more rapid in the 1970s. But, when you factor in the cumulative inflation between the 1970s and today, transportation is less affordable today than it was decades ago.

Housing

Another ripple effect of rising oil prices is rising energy prices. In March, the energy index rose 10.9% in a single month, bringing prices up 12.5% year-over-year.

That's not quite as bad as the 1979 oil crisis, when electricity rates spiked 17% by 1980 and natural gas prices shot up 44% between 1978 and 1980, according to the U.S. Energy Information Administration. But we might still have more rate hikes in store for us — though not all related to oil prices.

That 12.5% year-over-year spike comes on top of already inflated energy rates. Since 2020, the average cost of electricity has gone up 25% while natural gas rates surged 42%. This month alone, electricity and natural gas jumped another 6.1% and 6.4%, respectively.

Things get even more expensive when you factor home prices and mortgage rates.

In 1973, Americans could expect to pay a median price of $32,500 to buy a house (about $247,850 today). By 1979, home prices had nearly doubled to $62,900 ($297,570 today).

Between 2020 and 2025, meanwhile, the median home price jumped from $330,900 to $419,200. That's about a 27% price increase, which is definitely a more modest jump from 1973 to 1979. However, when adjusting for inflation, today's homes are roughly over 40% more expensive than they were in 1979.

Mortgage rates complicate the picture. In the 1970s, mortgage rates shot through the roof, jumping from 7.44% in 1973 to 12.85% by the end of 1979.

Mortgage rates technically rose faster between 2020 and 2025, experiencing a 133% increase. But they rose from historic lows of 2.66% in December 2020 to 6.21% by December 2025.

Let's say you're a typical homeowner buying a house with a 20% down payment in each year to get a sense of how home prices and mortgage rates impacted your wallet:

When factoring in interest rates (and adjusting for inflation), 1979 homebuyers had the most expensive mortgage payments, but today's averages are a close second.

Overall verdict: The shift in home affordability looks similar between the 1970s and today’s post-pandemic economy. In both periods, saving for a 20% down payment became more difficult, and the monthly mortgage payment that followed took a bigger bite out of household budgets. Energy costs are also rising again, putting utility bills on a path that could mirror the spikes homeowners faced in the 1970s.

Food

In March, overall food prices were flat month over month and up only 2.7% year over year. Food at home prices actually fell by 0.2% between February and March and are up only 1.9% since last year.

That modest dip isn't enough to translate to major relief for consumers yet. Between 2020 and 2026, overall food prices have surged 32%. So there's a long way to go before food starts to feel affordable again.

Whether or not they remain on that downward trend is up in the air, though. The downstream effect of rising oil prices will also lead to higher costs for food producers in the form of rising fertilizer prices, higher costs for transportation and other operational expenses that are vulnerable to shifting energy prices.

The situation was even more grim in the 1970s. Between the oil embargo in 1973 and the Iranian Revolution at the end of 1979, overall food prices soared 89% for consumers.

Overall verdict: Food prices definitely rose faster in the 1970s than they did today. But the full impact of this recent Iran conflict is still yet to be felt. While we may not see double digit food inflation again, the conflict will likely reverse the downward trend we started to see in March.

Salaries

While costs generally soared faster in the 1970s than they have today, so did salaries. Between 1973 and 1979, the median household income grew 56%, rising from $10,510 to $16,460.

When you adjust for inflation, however, the typical household's buying power actually fell by 2.8%. That $10,510 salary in 1973 is equivalent to $80,151 today. Jump to 1979, and that $16,460 salary is only worth $77,870 today.

Today's households have also seen a decrease in buying power despite nominal increases in wages. In 2020, the median household income was $68,010 (equivalent to $87,055 today). In 2024, the most recent year for which data is available, median income rose to $83,730. When adjusting for inflation, that's a 3.8% decrease in buying power.

As a point of reference, compare those salaries to the typical mortgage payments mentioned in the housing section above.

In 1973, a $181 mortgage payment would have taken just 20% of your gross salary. By 1979, a typical $551 monthly mortgage payment would have already eaten up 40% of your gross salary.

In 2020, a $1,068 mortgage payment would have taken up just 18% of a typical household's gross income. By 2025, the typical $2,056 mortgage payment would account for nearly 30% of a household budget.

Overall verdict: Just like in the 1970s, Americans today are seeing paychecks rise on paper. But they're not growing fast enough to keep up with inflation. In fact, even though inflation was rising faster in the 1970s, the typical household's buying power wasn't falling as fast then as it's falling now.

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Property taxes are a financial strain for many, but are one of the largest sources of funding for local governments in Ohio.

These levies generate roughly $24 billion annually for local governments and help finance schools, police and fire departments, infrastructure, parks, libraries, and more in the Buckeye State.

But now, a proposed constitutional amendment that organizers are trying to qualify for the November 2026 ballot would, if approved, abolish property taxes statewide, as early as next year.

In petition materials supporting the Ohio ballot initiative to eliminate property taxes, organizers wrote: “Property ownership in Ohio feels more like renting from the government, hindering true ownership. This limits our freedom, obstructs wealth transfer to future generations, and keeps families in poverty.”

If passed by voters, the measure could translate into major savings for homeowners but pose fiscal challenges for local services and government budgets.

That’s why some Ohioans are sounding alarms. Here's more to know.

Ohio property tax rate

Ohio’s property tax system is layered.

Residential property is taxed on 35% of its appraised market value, which becomes the taxable value. Local tax rates — including those set by school districts, counties, municipalities, and special levies — are then applied to that value.

The effective property tax rate in Ohio averages roughly 1.3% to 1.6% statewide, above the national average, according to the Tax Foundation.

Here’s an example of how a property tax bill stacks up for a "typical homeowner."

In that simplified example, homeowner property taxes total roughly $3,300–$3,500 per year. And if Ohio property taxes are eliminated, that bill could drop to $0.

But…the revenue would still need to be replaced to effectively fund schools and other important local services.

Ohio proposed property tax changes: Who benefits?

According to reporting on the ballot effort, here's who stands to benefit if Ohio eliminates property taxes.

• Owner‑occupied homeowners would likely see the largest direct savings, especially in urban and suburban areas where property taxes tend to be higher.
• Those with rapidly rising assessments — whose bills have outpaced income growth — would also benefit from property tax relief.
• Investors and commercial property owners would benefit as well, though the net economic impact would depend on how replacement taxes are structured.

However, the full impact of ending property taxes in Ohio would depend on how lawmakers address the revenue loss. Right now, it's unclear exactly what the replacement plan would be.

If not property taxes, where would revenue come from?

Some analysts warn that eliminating property taxes without a clear replacement strategy could create massive shortfalls in local budgets.

A state Office of Budget and Management analysis suggests Ohio could lose about $24 billion in property tax revenue annually if property taxes are abolished.

Possible replacement revenue sources could include:

• Higher statewide sales taxes
• Expanded or increased state and local income taxes
• State budget subsidies or revenue sharing to local governments
• New local tax options or service fees

Each option comes with trade‑offs, and some policymakers caution that shifting the burden away from property taxes could disproportionately affect households with low or middle incomes.

For example, a Tax Foundation analysis suggests that if Ohio eliminated property taxes and replaced them with income taxes, the statewide rate could average around 12.6%. That number could climb above 13% in some counties, with extreme estimates as high as 27%.

Other analyses suggest that eliminating property taxes could require much higher sales tax rates, depending on the mix of alternatives chosen.

Could local services be harmed?

It's important to know that in every state, property tax revenue helps support several essential state services.

Public Schools: Property taxes fund the majority of many local school budgets. Cuts could lead to larger class sizes, program reductions, or teacher layoffs.

Police and Fire: Emergency services in cities and towns rely on property tax levies for staffing and equipment.

Infrastructure: Maintenance of roads, bridges, and local public works projects depends on steady tax revenue.

Libraries, Parks, and Community Programs: These services often operate on tight budgets funded significantly by property tax levies.

As a result, some local officials have described the potential loss of property tax revenue as "catastrophic" for many jurisdictions, because it could force deep cuts in essential services.

Several schools, first responders, and local officials have mounted opposition through the coalition Ohioans to Protect Public Services.

On its website, the group states: "Eliminating property taxes sounds simple. In reality, it creates chaos that will hurt every family, every community, and every paycheck."

The group points out that a move to end property taxes could "wipe out $20 billion in critical services," including those for older adults, at-risk youth, and public health services.

Current Ohio property tax relief

In response to calls for property tax relief, Ohio has recently enacted several reforms.

In December of last year, Gov. Mike DeWine signed five bills intended to limit future property tax increases and expand homeowner tax credits.

Those measures are projected to deliver more than $3 billion in savings for Ohio property owners, according to state estimates.

• One measure expands a state owner‑occupancy credit that gradually increases relief for homeowners over several years.
• Other measures cap increases tied to reappraisals and give counties greater oversight over tax rates.

What Ohio homeowners can do now

If you’re a homeowner watching the Ohio property tax debate:

Review your property tax bill and exemptions. You might qualify for credits or be able to appeal your property tax valuation.

Attend local budget hearings to understand how property tax revenue is being used.

Monitor the signature drive. Petitions are still circulating as organizers work to meet certification requirements for the November 2026 ballot.

Also worth noting: Ohio voters will soon elect a new governor, since Gov. DeWine is term-limited. The 2026 Ohio gubernatorial election is set for November 3, 2026, so discussions about tax relief will likely continue in the coming months.

Ohio property tax debate: Bottom line

Ending property taxes in the Buckeye State could deliver savings for homeowners, but it would also remove one of the state’s most important revenue sources.

Note: Grassroots organizers are still collecting the required signatures for certification, so it's unclear whether the proposal will qualify for the 2026 ballot.

But Ohio isn't alone in considering abolishing property tax. Other states, including Florida, as Kiplinger has reported, have recently considered similar proposals. For more information, see our report: Florida Wants to Eliminate Property Taxes.

And whether the replacement comes through higher sales taxes, higher income taxes, or cuts to core services, someone will ultimately pay the price. So, stay tuned.

More on Property Taxes

• 10 States With the Highest Sales Tax
• 3 States Consider Eliminating Property Taxes This Year
• How to Lower Your Property Tax Bill

How much do I need to retire? That's the "magic" question for many people. According to the 2026 Northwestern Mutual Planning and Progress Study, the average American now believes they need $1.46 million to "retire comfortably" — a 15% jump from last year.

However, that number isn't fixed. Life expectancy tables, family dynamics, cost-of-living estimates, and even the nation's political climate can all affect your finances in retirement.

But one area retirees often overlook is state-level taxation. Where you choose to park your retirement can drastically change how much you need to save.

Here are the 13 states that do not tax retirement income (distributions from 401(k)s, IRAs, Social Security benefits, etc.), ranked by the estimated total savings needed to live comfortably.

Note: Regardless of state laws, federal income taxes still apply to most retirement distributions.

Related: Are You 'Broke Planning'? 10 Frugal Habits People Are Using to Save in 2026

Estimated retirement savings needed ranked by state in 2026

To determine how much in retirement savings you need to "retire comfortably" in each state, Kiplinger used the list of states with no retirement taxes.

Then, data from the North American Community Hub Statistics (NCH Stats), which was sourced from the Social Security Administration (SSA), the Employee Benefit Research Institute (EBRI), and global retirement trends, was used to calculate the "estimated savings needed per state" amounts.

Median property taxes paid in each state were referenced from Property Shark, which utilizes the latest information from the U.S. Census Bureau. The national average property tax bill for 2026 is $3,119.

Cost-of-living analysis was pulled from the Missouri Economic Research and Information Center (MERIC) index scores.

Yet it's important to note that family size, annual income, retirement age, and other factors can influence the retirement savings needed for an "affordable" retirement. Each individual's needs differ, so consult a tax professional when necessary.

1. Mississippi: Low cost of living and no retirement taxes

Median property taxes paid: $1,215

Estimated savings needed: $730,000

Mississippi is the most "comfortable" state on this list. The Magnolia State exempts qualified retirement distributions from the state's 4% flat tax on other forms of income. With property taxes roughly 39% below the national average bill, it is the only state here where a nest egg of less than $750k is truly viable for a comfortable retirement.

The trade-off: While your dollar stretches further on groceries and utilities, Mississippi ranks lower in national healthcare performance compared to most other states.

Should you retire in the Magnolia State? Retirees moving from high-cost states who want to maximize their liquid cash might find Mississippi ideal, provided they don't require specialized or frequent medical care.

2. South Dakota: No state income tax and older adult tax freezes

Median property taxes paid: $2,724

Estimated savings needed: $790,000

South Dakota has no state income tax, meaning interest, dividends, and retirement distributions are all state tax-free. An older adult assessment freeze helps some homeowners 65 and older lock in home values for tax purposes, which could keep your property tax bill closer to the median of around $2,724.

The trade-off: South Dakota is known for severe weather, and rural areas offer limited access to major cultural hubs. However, the state has recently seen an expansion in healthcare quality in metro areas like Sioux Falls.

Should you retire in the Mount Rushmore State? If you seek a quiet, budget-conscious lifestyle and can handle the cold, South Dakota may offer some of the best wealth-preservation tax laws in the country.

3. Iowa: Low housing costs and no retirement tax

Median property taxes paid: $2,897

Estimated savings needed: $800,000

Although Iowa has a flat tax for workers, retirement income (including 401(k) and Social Security) is 100% exempt for those 55 and older. The estimated savings needed are around $800,000, likely due to Iowa's cost of living, which is approximately 10% lower than the national average, per the latest data from MERIC.

The trade-off: Iowa ranks high for severe weather risks, particularly tornadoes. The cost of living may be relatively low, but property taxes are slightly higher than in neighboring states, South Dakota and Missouri.

Should you retire in the Hawkeye State? Retirees looking for a middle-American lifestyle alongside low housing costs could find Iowa a hidden gem.

4. Tennessee: Low property taxes and no income tax

Median property taxes paid: $1,442

Estimated savings needed: $810,000

Tennessee may offer one of the lowest tax burdens in the country, ranking #4 on our list. With no state income tax and property taxes up to 73% lower than the national average, retirees may be able to live comfortably on a much smaller nest egg than the $1.46 million average cited in the Northwestern study.

The trade-off: To compensate for the lack of income tax, Tennessee has a high state sales tax (7%). Rising housing costs in popular hubs like Nashville are also pricing out some newcomers.

Should you retire in the Volunteer State? If you want a state that has four distinct seasons and a vibrant cultural scene accompanied by less of an income "tax bite," Tennessee may be the retirement spot for you.

Related: 10 Cheapest Places to Live in Tennessee.

5. Wyoming: Low property tax bill and no retirement taxes

Median property taxes paid: $1,767

Estimated savings needed: $810,000

Wyoming is frequently ranked as one of the most tax-friendly states for retirees. Beyond the 0% retirement income tax, the state has a low sales tax of 4% (among the lowest in the U.S.) and relatively cheap property tax bills, with a median of just $1,767.

The trade-off: Wyoming is the least populous state, meaning public transportation and specialized healthcare might be scarcer outside of urban centers. You'll likely need to be comfortable committing to longer drives for amenities.

Should you retire in the Equality State? It may be perfect for adventurous retirees who prioritize tax savings and outdoor access over city living and mild weather.

6. Texas: affordable living and world-class healthcare

Median property taxes paid: $4,232

Estimated savings needed: $890,000

Texas's lack of income tax is a major draw, but it makes up for the lost revenue through property taxes. The Lone Star State has one of the highest effective property tax rates in the country, per the Tax Foundation, which helps push the "comfortable" savings requirement toward the $900k mark.

The trade-off: While healthcare in cities like Houston may be considered particularly high-quality, overall performance and healthcare access in Texas are usually ranked poorly in national rankings. Plus, the property tax burden can be a shock for those moving from states that have lower real estate tax levies.

Should you retire in the Lone Star State? Texas may be best for retirees who want an active lifestyle and who don't mind trading an income tax for a larger annual property tax bill.

Related: 10 Cheapest Places to Live in Texas.

7. Pennsylvania: Tax-friendly for retirees, but watch the 'death tax'

Median property taxes paid: $3,311

Estimated savings needed: $900,000

Pennsylvania generally exempts most retirement income from state taxes for residents 60 and older. The overall cost of living is roughly 3% lower than the national average, per MERIC, and lower-income older adults may qualify for the Pennsylvania property tax and rent rebate program.

The trade-off: Pennsylvania is one of the few states that still imposes an inheritance tax ranging from 0% to 15%. So even though you save during your lifetime, your heirs may pay for it later.

Should you retire in the Keystone State? Pennsylvania might be a solid choice for retirees who want access to East Coast amenities and top-rated hospitals without the high price tags of New York or New Jersey, yet the state tax on heirs can be high.

8. Nevada: No income, estate, or inheritance taxes

Median property taxes paid: $2,027

Estimated savings needed: $920,000

Nevada's estimated savings secure it a #8 ranking on our list. With no state income tax and reasonable property taxes, the Silver State may be a haven for those looking to keep more of their nest eggs compared to other states later on this list.

The trade-off: Nevada's cost of living has become closer to the national average in recent years, per MERIC data. This means that while there is no state income tax, daily expenses — from utilities to dining out — can be higher than in the southeastern or midwestern states.

Should you retire in the Silver State? You might move to Nevada if you're a retiree who wants warm weather and no state-level income taxes, but be prepared for perhaps a higher baseline for everyday expenses than you're used to (depending on where you currently live).

9. Florida: Rising insurance costs offset tax savings

Median property taxes paid: $2,730

Estimated savings needed: $950,000

Florida was once the clear winner for retirees, so it may come as a surprise that the Sunshine State ranks lower on this list. Although there is no state income tax and overall property tax bills can be relatively low, Florida is currently facing a homeowners' insurance crisis, with some premiums having tripled in some areas.

The trade-off: Intense summer heat and high insurance costs are driving a trend of "half-backs," or retirees who move halfway back north to avoid Florida's rising cost of living.

Should you retire in the Sunshine State? If you have a larger nest egg and can afford the insurance premiums, the state income tax-free environment and social communities are still hard to beat for retirees.

Related: 10 Cheapest Places to Live in Florida.

10. Illinois: High taxes on everything but retirement

Median property taxes paid: $5,298

Estimated savings needed: $970,000

Illinois can be a bit of a tax paradox. The Prairie State has some of the highest property and state sales taxes in the nation, yet it can be more tax-advantageous to retirees, exempting almost all retirement income from it's 4.95% flat tax.

The trade-off: The median property tax bill of over $5,000 is a high recurring cost. You'll need a nest egg close to the national average ($971,000, per NCH Stats) just to maintain a standard lifestyle in Illinois.

Should you retire in the Prairie State? Illinois may be ideal for those who want the urban amenities of Chicago (including top-tier health care), provided you are comfortable paying a high annual property tax bill.

11. New Hampshire: No sales tax, yet high property costs

Median property taxes paid: $6,667

Estimated savings needed: $1,113,994

New Hampshire recently phased out its tax on interest and dividends, making the Granite State completely income-tax-free. However, a median property tax bill of $6,667 means New Hampshire living may require a much larger nest egg to cover basic expenses.

The trade-off: There is no state sales tax, which is a major perk for shoppers. But the cost of living remains much higher than the national average, according to MERIC.

Should you retire in the Granite State? Native New Englanders who want to stay close to home while keeping their zero state income tax will benefit, though out-of-state movers might find the entry costs steep.

12. Washington: High costs for a high-active lifestyle

Median property taxes paid: $4,556

Estimated savings needed: $1,145,540

Washington has no state income tax, though a controversial capital gains tax now affects high earners. For the average retiree, the tax environment might be friendly, but the Pacific Northwest housing market pushes the "comfort" threshold past $1.14 million.

The trade-off: Washington's cost of living is roughly 13% higher than the national average, per MERIC data. Even though mountainous scenery may be beautiful, your retirement distributions won't go nearly as far as they would in the south.

Should you retire in the Evergreen State? If you have a robust nest egg and value an active, outdoor-focused lifestyle, Washington's amenities might justify the higher cost of entry, but it's certainly not for everyone.

Related: 10 Cheapest Places to Live in Washington.

13. Alaska: The most expensive 'tax-free' state

Median property taxes paid: $738

Estimated savings needed: $1,292,753

Alaska has no state income or sales tax, and residents actually receive an annual Dividend Payment. But due to the high cost of importing goods and expensive healthcare, you need nearly $1.3 million to retire comfortably here.

The trade-off: While property taxes are low (residents 65 and older may get a $150,000 exemption), the price of groceries and utilities is the highest among all no-income-tax states.

Should you retire in the Last Frontier? Only the truly adventurous who have saved significantly above the national average and can handle the geographic isolation might consider a retirement in Alaska.

Read More

• States That Won't Tax Your Death
• How All 50 States Tax Retirement
• 3 Retirement Tax Changes to Watch in 2026
• States With the Highest and Lowest Tax Rates

Question: We lived below our means our entire careers. We're now 67 with $5.8 million and about to take Social Security, which will provide $5,000 a month. I want to spend $300k on home renovations for our cramped and outdated house. I also want a new car. My wife is too nervous to spend so much. How do I get her to loosen up?

Answer: Many people who retire with large sums of money get there via hard work, frugal living, and diligent saving. If you've reached the age of 67 with $5.8 million saved, you're most likely looking at a comfortable retirement, especially if you're used to living modestly.

Plus, if you have $5,000 a month in Social Security coming your way, you may not have to tap your savings too heavily to cover your essential needs. That gives you more wiggle room to really enjoy that money and splurge on things that enhance your quality of life.

But what if your wife is struggling to do that? You may be looking to spend $300K on home renovations and a new car, which are reasonable things to purchase — especially if you have a $5.8 million nest egg to dip into. But if your wife is used to spending minimally, it may take some convincing.

Here's how to get your wife on board with enjoying your money while acknowledging her hesitation.

It's not an unreasonable sum to withdraw

At first glance, $300,000 might seem like a huge chunk of money to withdraw from a retirement nest egg in one fell swoop. But Eric Croak, CFP and President at Croak Capital, insists that it's not earth-shattering.

"Two retirees starting at age 67 with $5.8 million and $60,000 of Social Security income are already in good shape from most planners' perspectives," Croak insists.

As he points out, $300,000 is only about 5.2% of the total nest egg. Using the popular Monte Carlo model, this might reduce the probability of success by about 2% to 5%, depending on asset allocation, planned withdrawals, and market performance. But that, he insists, is not a huge deal.

"If your plan showed a 95% success rate before the [planned spending], you'd likely be around 90% to 92% after completing the spending. That's still very comfortable for most couples aged 67 to 72 with 25 to 30 year time horizons."

It's hard to change a frugal mindset

While Croak feels that $300,000 is a reasonable amount to spend early in retirement in this situation, he agrees that the hesitation may be more of a mindset issue than a financial one.

"On the behavioral side, I think the wife is likely reacting less to the $300,000 spend and more toward spending in retirement in general," he explains. "After saving for 40 years, it really does train your brain to view spending as the enemy instead of running out of money."

What Croak suggests in situations like these is to create a written retirement income plan that clearly defines a "lifestyle bucket" for housing, travel, cars, and other expenses over the next few years.

"When spending is planned for… it no longer feels like dipping into your safety net," he says.

Croak also suggests running a stress test to show how the plan can handle a simultaneous 30% market downturn plus the full spending amount. If the plan survives, Croak explains, then withdrawing the money becomes less scary.

Randy Jaramillo, founder and president of Reliant Wealth Management, agrees.

"The outlook has to be with the idea of replacing spending with permission structure," he says. "This couple must work together to define a safe annual spending number and a one-time spending bucket."

It may also help to directly address your wife's fear of spending money. Even if the numbers back up your plan, you don't want to dismiss her hesitation. Instead, have a calm discussion that's rooted in firm numbers.

You don't have to spend it all at once

Even if you can afford to tap your nest egg to the tune of $300,000, Jaramillo says that for someone with a saver's mentality, it can be difficult to see such a large sum of money get withdrawn at once. That's why he suggests a tiered approach to that spending.

"You can break the $300,000 in two phases," he says. "Year One, partial renovation, and in Year Two, you could take $150,000 and finish the renovation plus the car."

This may be a reasonable compromise, he says, especially if you can also show your wife the value of spending the money.

"Frugal spenders hate waste and value meaning," Jaramillo says. But if you show that the renovation lets you both enjoy your home more, your wife might have an easier time getting on board. Spending in stages also allows adjustments if the market takes a steep dive.

Jaramillo also recommends running what he calls a "regret test."

"What would you regret more at age 85? Never enjoying what you built or spending $300,000 now?" he says.

The bottom line, says Jaramillo, is that a couple in this situation can easily afford to spend $300,000 on lifestyle enhancements with minimal risk. "The real challenge is rewiring a lifetime of frugality," he says.

Read More

• We Retired at 70 With $4.3 Million. My Wife Won't Spend 'Our Grandkids' Inheritance,' but I Want to Travel.
• We're 59 and Retired With $5.3 Million. We Want to Spend $250,000 a Year Until Medicare and Social Security Start. Are We Nuts?
• We've Reached Our $5 Million Retirement Savings Goal, but at 66, My Husband Still Doesn't Feel Ready.

For anyone navigating the 2026 housing market, the current rate volatility might feel impossible to ignore and even harder to time.

Today, mortgage rates for 30-year fixed loans are hovering around 6.44%. While many analysts, including Fannie Mae, predict rates could drop to 5.9% by year-end, geopolitical instability — specifically, the current conflict in the Middle East — has sent rates on an upward trajectory this month.

Is right now a better time to buy, or should you wait? Buying now allows you to lock in a rate before further volatility spikes. Yet, three tax signals might determine whether you can afford a home in 2026.

Are today's mortgage rates helping me buy a house?

So far, the 2026 housing market is proving more accessible than the previous two years:

• Home prices are flattening. Current forecasts by J.P. Morgan and the National Association of Realtors show a 0% to 4% appreciation, respectively. This is a significant "cool down" from recent years.
• Inventory is increasing. As rates stabilize near 6%, more homeowners are willing to list their properties and trade their low-rate houses for a new move (including retirees looking to downsize).
• Rate volatility. Until recently, rates were around 6%, which was down from last year's high of 7.01%, according to the Federal Reserve Bank of St. Louis. However, the recent tick up to roughly 6.44% is due to the U.S.-Iran conflict.

Mortgage rate increases serve as a reminder that market timing is a gamble. But your personal financial readiness might be the only variable you can control if you want to buy a house in 2026.

Signal 1: The 'tax return threshold'

Although it might seem counterintuitive to focus on the past when looking at a new home, your lender is doing exactly that. Lenders verify your last two years of tax returns to calculate your debt-to-income (DTI) ratio.

Your DTI is calculated by dividing your total monthly debt payments (from your credit report) by your gross monthly income (before taxes).

Example: If you earn $10,000 per month and have $4,000 in total debt (student loans, car payments and your proposed mortgage), your DTI is 40%.

Ideally, you want to sit at 36% or lower, though many conventional lenders accept up to 43%. Calculate what your DTI is before you ask yourself, "Should I lock in a mortgage rate now or later?"

If you need a house today and can afford it at the rate you're for which you're approved, lock it in. You might refinance your home later if the value is higher, but you can't "refinance" a missed opportunity on a home price that was within your DTI limits.

Signal 2: The 'escrow creep' indicator

A common mistake for homebuyers in 2026 is focusing solely on the mortgage principal and interest while ignoring the "escrow creep."

Review all categories of expenses that might go into your escrow account — including home insurance premiums and property taxes.

Your annual property tax bill is a good indicator of cost-of-living increases in your area. If a county has a history of aggressive reassessments, your "affordable" 2026 payment could become a burden later.

Additionally, you should only buy a home in 2026 if you plan to stay for at least five years. This gives you a good chance your home equity will grow enough to cover future closing and agent costs (if you decide to move).

If you aren't sure you'll be in the area for five years, renting might be the better option for your financial situation. (Some recent analyses suggest a 10-year runway for holding onto a home).

Finally, don't forget to factor in insurance volatility. In such states as Florida, some homeowners have seen premiums surge by about 49% in the last several years, per recent LendingTree data. If you don't bake these "hidden" costs into your DTI now, your dream home could quickly become a liability.

Signal 3: The '2026 tax perk' qualifiers

Several federal tax shifts in 2026 have changed the math on home affordability. These shouldn't be viewed as year-end "bonuses," but as part of your monthly cash flow:

• Restored insurance deductions. Starting in 2026, private mortgage insurance (PMI) premiums, FHA/USDA insurance premiums, and Veterans Affairs (VA) funding fees are tax-deductible again for buyers with an adjusted gross income (AGI) below $100,000.
• State and local tax (SALT) tax deduction cap. Under the 2025 Trump tax bill, the SALT deduction limit has increased to $40,400 for tax year 2026 (some homeowners might still be subject to the former $10,000 cap).
• Mortgage interest limits. You can continue to deduct mortgage interest on up to $750,000 of debt. For many, this could lower the "effective" interest rate of a 6.4% loan.

It's important to note that these deductions are only available if you itemize and don't claim the standard deduction.

But if you're eligible, incorporating these homeowner tax breaks alongside your projected property taxes, HOA fees, and insurance premiums, could give you a more realistic view of the "all in" home cost and whether you can truly afford your DTI mortgage rate in 2026.

The bottom line: Is 2026 a good year to buy a house?

For the prepared homebuyer, 2026 might be the best window we've seen in years. Lower rates, higher inventory and moderate price increases mean sellers might finally be ready to negotiate.

However, your first step isn't browsing Zillow — it's reviewing your 2025 tax return. Ensure your income is documented, your DTI is optimized, and you're moving to an area where the property tax and home insurance (or even maintenance repairs) won't cannibalize your savings.

The amount of your down payment and your credit score will affect home affordability in 2026, too.

Consult with a tax professional when necessary. Your personal financial situation ultimately impacts when it's time to move.

Read More

• Eliminating Property Taxes: What Homeowners Gain and Give Up
• Ways to Lower Your Property Taxes in 2026
• Homeowners Face Potential Capital Gains Tax Shift: What to Know Now
• North Carolina’s $15,000 Forgivable Mortgage: How to Qualify in 2026

The red-hot real estate market of the past few years has cooled somewhat, and buyers now have more options. That shift puts more pressure on sellers to make a strong first impression, especially if you want your home to sell quickly.

Today’s buyers are more prepared. Many are touring homes with a clear checklist in hand. In fact, Redfin notes that buyers often rely on house hunting checklists to compare features, condition and overall value. That means your home needs to check the right boxes from the start.

The good news: You don’t need a full remodel to stand out. A handful of targeted upgrades can improve your home’s appeal and help attract serious buyers.

The exterior upgrades that can help your home sell faster

Boosting your home’s curb appeal often delivers the fastest payoff because it shapes a buyer’s first impression before they even step inside. And that first look matters. According to a RE/MAX poll, 46.2% of respondents said a shabby exterior is the biggest turnoff when touring a home.

Your home’s exterior sets expectations for what buyers will find inside. If it looks clean, well-kept and inviting, buyers are more likely to feel confident about the rest of the property and move forward with a showing.

Start with simple, high-impact updates. Painting the front door is one of the easiest ways to refresh your home’s appearance. Research from Zillow shows that door color can influence both curb appeal and sale price, with black front doors selling for about $6,449 more than comparable homes, and slate blue doors attracting premiums of around $1,537.

From there, focus on overall cleanliness and maintenance. Pressure washing siding, driveways and walkways can quickly make your home look newer and better cared for. A basic landscaping refresh, such as mowing the lawn, trimming bushes and adding fresh mulch, can further elevate the look without requiring a major investment.

Most of these upgrades can be completed in a weekend, but they can have an outsized impact by attracting more buyers early in the process and helping your home stand out in a more competitive market.

Refresh walls and lighting for a quick reset

Refreshing your interior walls can quickly transform how your home feels to buyers. Clean walls in a neutral, lighter shade help rooms look brighter, larger and more move-in ready, all of which can increase appeal during showings.

A fresh coat of neutral paint is one of the most cost-effective upgrades you can make, but it delivers a strong visual impact. While you are updating walls, take the opportunity to improve your lighting as well. Swapping outdated fixtures and using brighter, warm-toned bulbs can make spaces feel more inviting and highlight your home’s best features.

Look for simple ways to maximize light throughout the home. Replacing a large piece of wall art with a mirror can reflect natural light and create the illusion of more space. Lighter, neutral curtains can also help brighten a room, especially when they are fully open during showings to let in as much natural light as possible.

These small updates work together to create a clean, airy feel that helps buyers better picture themselves living in the space.

Make small kitchen updates instead of a full remodel

You can improve your kitchen’s appeal without committing to a full remodel. In many cases, smaller updates deliver a better return. According to WM Construction, minor kitchen remodels can yield returns of about 112.9%, compared with roughly 50% for full gut renovations.

Focus on simple, visible upgrades that modernize the space. Swapping out cabinet hardware and faucets is an easy way to give your kitchen a more updated look. Painting cabinets in a neutral color can achieve a similar effect to a full replacement at a fraction of the cost.

Other affordable updates, like installing a new backsplash, can quickly refresh the overall feel of the room. Replacing outdated fixtures and choosing stainless steel, energy-efficient appliances can also make a strong impression, signaling to buyers that the kitchen is both functional and up to date.

These targeted improvements can make your kitchen feel current and well-maintained, without the time or expense of a major renovation.

Clean, declutter and fix the little things

A thorough deep clean can significantly improve your home’s appeal to potential buyers. Start by decluttering and cleaning each room from top to bottom, or consider hiring a professional if you do not have the time to handle it yourself.

Pay close attention to odors, especially those related to pets or cooking. If possible, open windows to bring in fresh air and create a cleaner, more inviting environment during showings.

While you are preparing your home, take care of small repairs that buyers are likely to notice. Fix leaky faucets, chipped paint and loose handles, and regrout bathroom tile if needed. These minor updates are inexpensive, but they signal that the home has been well maintained.

Together, a clean, clutter-free space and a handful of simple fixes can make your home feel move-in ready and help buyers focus on its best features.

Create simple outdoor living appeal

Make the most of your outdoor space to help buyers picture themselves enjoying the home. Even a simple setup can create a strong impression. Consider adding a small seating area, a fire pit or outdoor lighting to a yard or patio to define the space.

Layer in a few finishing touches to make the area feel inviting. Potted plants, outdoor pillows, candles, a rug or a light throw can add warmth and comfort without requiring a major investment.

These small updates can make outdoor areas feel like an extension of the home, which is especially appealing to buyers. A functional, welcoming outdoor space can help your home stand out and may even contribute to a faster sale.

What not to do before selling

As you make a list of your home upgrades, be sure to avoid some common mistakes:

• Over-personalized upgrades: Avoid bold design choices that may not appeal to a wide range of buyers, such as bright paint colors, unusual flooring or themed rooms. The goal is to create a space that feels neutral and inviting, not one that reflects a specific taste.
• Luxury renovations: High-end upgrades like in-ground pools, marble countertops or adding a walk-in closet can be expensive and often do not deliver a strong return. In many cases, buyers will not pay enough of a premium to offset the cost. Focus on smaller, cost-effective improvements instead.
• Letting personal taste lead: It is easy to design for your own preferences, but what appeals to you may not resonate with buyers. Features like a pink front door or a bold-colored appliance can feel like projects buyers will need to undo. Stick with simple, neutral updates that appeal to the broadest audience.

Small updates can speed up your sale — without overspending

You do not need a full overhaul or a contractor to get your home market-ready. A series of simple, low-cost improvements can make a difference, especially when they are visible to buyers during a showing.

These updates help create a space that feels clean, well-maintained and easy to move into, making it easier for buyers to picture themselves living there. That emotional connection can be what turns interest into an offer.

Related Content

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Who doesn't love strolling cobblestone streets after a hearty meal of shrimp and grits? Well, maybe some don't — but the millions of people flocking to Charleston every year suggest otherwise.

Between the sun-drenched beaches and the rich cultural history, it's no wonder many vacationers start wondering what it would actually take to call the Palmetto State "home."

Long regarded as a retiree's paradise, South Carolina's biggest draw remains its incredibly low property taxes, which are some of the lowest in the nation. Plus, no "death tax" in the state means your heirs have more wealth to hold onto.

So if you're looking to make the move without breaking the bank, here are the ten cheapest places to live in South Carolina right now.

Cheapest places to live in South Carolina

After ranking property tax bills from highest to lowest per county in South Carolina, you can bet on one thing: Rural areas win out. You'll typically find a lower cost of living in the countryside than in the hustle and bustle of a big city.

But if you want to cash in on historic sites, state parks, and motor speedways (and maybe want to commute for other enjoyments), check out these cheap places to live in South Carolina.

Note: Kiplinger used the latest data presented by the Tax Foundation (sourced from the U.S. Census Bureau) to find the cheapest counties in South Carolina to live in.

Williamsburg County

Median property tax bill: $687

Median home price: $104,500

Williamsburg homes are pretty affordable, with a median home price of around $104,500. Property tax bills can be cheap too, sitting right under $690 per 2026 data released by the Tax Foundation.

If you have dreams of living in Charleston but want the feel of a small town, Williamsburg may be perfect for you, according to the county's Economic Development Board. The area features historic homes dating back to the 1700s, backdropped against southern magnolias and pine forests.

Residents enjoy fishing, hiking, and paddling at the new Black River State Park, shopping at the local farmer's market, or exploring historic ties at the Williamsburgh Society Museum. Plus, you're about a 90-minute drive from Myrtle Beach and Charleston.

Come to Williamsburg for down-home southern comfort and charm, and stay for the relatively low property tax bills.

Allendale County

Median property tax bill: $669

Median home price: $76,200

Allendale has the lowest median home price on our list, at only $76,200. The median property tax bill is also relatively cheap at just $669, according to the latest data from the U.S. Census Bureau.

Allendale County remains one of the most budget-friendly entry points in South Carolina, though it’s a choice that requires a love for true rural isolation.

In the summer, residents head to Barnwell State Park for lakefront swimming and fishing. As the humidity drops in the fall, the area becomes an explorer’s playground — from the walking trails at Burton’s Ferry Bridge to the world-renowned archaeological discoveries at the Topper Site.

If you have the flexibility of a remote job and a desire to trade the hustle for a significantly slower pace, you might consider relocating to Allendale County, South Carolina.

Darlington County

Median property tax bill: $652

Median home price: $158,200

Home prices are relatively low in Darlington; the median price tag is hardly above $158,000. The median property tax bill is also cheap — less than $655 — according to the Tax Foundation.

Most people know Darlington County for one thing: "The Track Too Tough to Tame." As home to NASCAR’s oldest superspeedway, the county pulses with energy twice per year, drawing over 47,000 fans to the area. But once the engines quiet down, you’re left with one of the most affordable and hospitable regions in the Pee Dee.

You can trade the asphalt for the cypress-lined boardwalks of Williamson Park or take a walking tour through one of the county’s five nationally recognized historic districts, where massive oaks and antebellum architecture define the landscape.

Whether you’re here for the adrenaline of the Southern 500 or the quiet beauty of the South Carolina botanical trails, Darlington County proves you don't have to sacrifice culture for cost.

Cherokee County

Median property tax bill: $614

Median home price: $142,000

Named after the Cherokee people who inhabited the land, the county tends to have a lower median price, at around $142,000. Property taxes can be relatively affordable as well, with a median bill of $614, according to the latest 2026 data from the U.S. Census Bureau.

History buffs — especially those with an interest in military strategy — will find a lot to love in Cherokee County. This is the home of the Kings Mountain National Military Park, the site of the battle Thomas Jefferson famously called "the turn of the tide of success" during the Revolutionary War. Today, the county keeps that spirit alive through lantern tours along campaign trails, war demonstrations, and visitations to colonial-era sites.

But it’s not all about the past; the area boasts a vibrant modern culture, from the seasonal productions at a local theater to the South Carolina Peach Festival, which transforms the city of Gaffney into a hub of live music and carnival fun every July.

If you’re looking for deep-rooted heritage and a community that celebrates its "peachy" local flavor, Cherokee is a top-tier budget pick.

Lee County

Median property tax bill: $599

Median home price: $104,600

Located in the Pee Dee region, Lee has relatively low home prices, with a median of around $104,600. Property tax bills are barely shy of $600, per the latest information from the Tax Foundation.

Lee County is a place that proves art can grow anywhere. The region is home to the world-renowned Pearl Fryar Topiary Garden, a three-acre "living" masterpiece of hope and inspiration.

Following the legendary artist's passing in early April 2026, his work has become a rallying point for the community; now preserved by a local nonprofit, the garden remains a sanctuary for those who find peace in horticulture and grassroots creativity.

The beauty extends beyond the garden to the banks of the Lynches River and the sprawling trails of Lee State Park. It’s a quiet, rural lifestyle, but the area is currently seeing a modern spark; the county seat of Bishopville is undergoing a major $5 million downtown revitalization, including a new technical education center that is breathing fresh life into historic structures.

In Lee County, you aren't just buying an affordable home — you’re joining a community dedicated to growth, preservation, and the legendary hospitality of the Pee Dee.

Union County

Median property tax bill: $579

Median home price: $103,600

Union home prices are relatively low, under $104,000, according to the Tax Foundation. Median property tax bills are relatively low at approximately $579 per year. The property tax bill in Union is also cheaper than all surrounding South Carolina counties.

For those who want their backyard to be nearly 62,000 acres of wilderness, Union County is a dream. Home to a significant portion of the Sumter National Forest, the area offers endless territory for hunting, camping, and hiking. Water lovers can spend their weekends on the Tyger River Canoe Trail or fishing at one of the county’s five major lakes.

After a day in the forest, you might want to stop at Midway BBQ in Buffalo. As the last remaining "hash house" in the county, this 85-year-old Southern institution serves up local flavors that travel guides consistently rank as a "must-visit."

Whether it's an afternoon or an eventual stay, Union County offers plenty to do with a relatively low property tax bill to boot.

Marlboro County

Median property tax bill: $496

Median home price: $82,000

Marlboro County has the second-lowest median home price on our list at $82,000. And the median property tax bill hovers at $496, according to the U.S. Census Bureau.

If you’re looking for a place with "kick," Marlboro County has it — literally. The region is the birthplace of Blenheim Ginger Ale, a cult-favorite spicy soda that’s been bottled there since 1903.

Beyond the soda pop, the Marlboro lifestyle is surprisingly active. Until two years ago, residents flocked to Lake Paul Wallace, a 300-acre oasis in Bennettsville that features a rare "split" design: one side is a peaceful waterfowl refuge and fishing spot, while the other boasts a white sandy beach for swimming and water skiing.

However, recent damage to the dam has caused closures, though the state of South Carolina has allocated $25 million for repairs to begin in 2027.

Between the historic heritage sites in the county seat and the sprawling fields of strawberries and corn, Marlboro offers a quintessential rural South Carolina experience with cheap property tax bills.

Chesterfield County

Median property tax bill: $487

Median home price: $116,200

Chesterfield can be relatively affordable, with the median home price around $116,200. Meanwhile, the median property tax bill in the area is just $487, according to the Tax Foundation.

Often described as the "Gateway to the Carolinas," Chesterfield is the ideal spot for those who value peace over proximity. The county is rural, scenic, and considered by some a top-tier choice for retirees or families looking to trade city noise for starlit nights. The trade-off? You’ll likely face a 45-minute drive for major retail hubs — but for many, the cost savings make the commute more than worth it.

The region is a playground for outdoor enthusiasts. You can spend your mornings horseback riding through the Sand Hills State Forest or golfing at one of the area’s championship 18-hole courses.

For those ready to settle into the great outdoors, Chesterfield County may be one of South Carolina’s best-kept secrets.

Dillon County

Median property tax bill: $452

Median home price: $85,400

About 40 minutes out from Florence is Dillon County, South Carolina. But home prices are more affordable in Dillon than in metropolitan areas. The median house price is $85,400, and property tax bills can also be quite cheap. Residents pay a median bill of $452, according to 2026 data.

For those searching for a "small-town" soul with a slow, intentional pace, Dillon County is a top contender.

Outdoor life is the heartbeat of the region, with locals spending their weekends camping and fishing at Little Pee Dee State Park. While travelers might recognize the county for the neon lights of the famous "South of the Border" attraction along I-95, residents know the area for its quiet streets and community staples like the Dillon County Theatre and the local history museum.

If you enjoy high-octane weekends, the Dillon Motor Speedway also provides a local alternative to the larger tracks, keeping the racing tradition alive without the "big city" traffic.

Dillon County is the perfect escape for those looking to disconnect from the metro life without disconnecting from their savings account.

Marion County

Median property tax bill: $436

Median home price: $93,200

Marion County is the cheapest place to live in South Carolina. The median property tax bill is only $436, and home prices are around $93,200, per the most recent Tax Foundation information.

Known as "Swamp Fox" country for its deep ties to the winding Little Pee Dee River and revolutionary war leader Francis Marion, this county is steeped in rustic history.

Today, Marion is defined by its stunning antebellum architecture and serves as the ultimate affordable alternative to the coast — offering a peaceful retreat approximately 45 minutes away from the bustle of Myrtle Beach.

Charming, moss-draped streets lead residents to the historic train depot and the scenic Catfish Creek Canal, where hiking and biking trails offer a front-row seat to the area's natural beauty. For a deeper dive into the local soul, the Holliday House offers immersive tours that capture the elegance of a bygone era.

Adventure and tranquility await in Marion County, the cheapest place to live in South Carolina.

More Cheap Places

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• 10 Cheapest Places to Live in Virginia

Each week in our Ask the Editor series, Joy Taylor, The Kiplinger Tax Letter editor, answers questions on topics submitted by readers. This week, she's looking at five questions on the home-sale tax exclusion, calculating tax basis in your home and related topics. (Get a free issue of The Kiplinger Tax Letter or subscribe.)

1. Home-sale exclusion

Question: I am planning to sell my home in the next few months. I have lived in the home for many years. Will my gain be taxed?

Joy Taylor: It depends. Generally, if you have owned and lived in your main home for at least two out of the five years before the sale date, up to $250,000 ($500,000 for joint filers) of your gain when you sell the home is tax-free. Any gain above the $250,000/$500,000 exclusion amounts is taxed at long-term capital gains rates of 0%, 15% or 20%, depending on the amount of your taxable income. Losses from sales of primary homes are not deductible.

2. Calculating tax basis in a home

Question: What expenditures can be added to the cost basis of a home to reduce capital gains when the home is sold?

Joy Taylor: To figure the tax basis in your home, you would start with the original cost (including the mortgage if you financed the purchase), add certain settlement fees and closing costs, and add the cost of any additions and improvements that add to the value of your home, prolong its useful life or adapt it to new uses.

IRS Publication 523 has some examples of improvements that increase your tax basis in the home and those that don’t. Examples of big-ticket items that increase basis include adding a room, installing new air-conditioning, renovating a kitchen, finishing a basement, or putting in new landscaping or a pool. Smaller-ticket capital improvements can also increase basis. These include new doors and windows, duct and furnace work, built-in appliances and water heaters. Repairs, maintenance and improvements that are necessary to keep your residence in good condition but don’t add value or prolong its life generally don’t hike the basis.

Note that if you used a room or other space in your home exclusively or regularly for business, or if you rented out your home in the past, you must reduce the tax basis in your home by any depreciation deductions you were eligible for.

Homeowners who keep good records will find it easier to calculate the tax basis. It’s best to keep all your home improvement receipts and invoices in one folder. If you didn’t keep these records, you can try to estimate the costs by looking at old bank or credit card statements, or call the company that originally did the remodeling or put in the upgrade.

3. Selling a duplex

Question: My wife and I own a duplex. We live in the upstairs unit, and a tenant lives in the downstairs unit. The upstairs and downstairs units each have separate addresses. We are now considering selling the full duplex. Can we take the full $500,000 home-sale exclusion when we sell?

Joy Taylor: No. The up-to-$500,000 gain exclusion applies only to the portion of your duplex that you used for residential purposes (not rental or business purposes). Below is relevant language from IRS Publication 523, 'Selling Your Home':

"You generally can’t exclude gain on the separate portion of your property used for business or to produce rental income... Examples are: (1) a working farm on which your house was located, (2) a duplex in which you lived in one unit and rented the other, or (3) a store building with an upstairs apartment in which you lived."

"[A]n allocation of the gain is required. For this purpose, you must allocate the basis of the property and the amount realized between the residential and nonresidential portions of the property using the same method of allocation that you used to determine depreciation adjustments. Report the sale of the business or rental part on [IRS] Form 4797."

4. Inheriting a home

Question: My mom passed away a couple of years ago, and I inherited her home, which I have been using as a vacation home. I am now ready to sell that house. Will I be taxed on the sale?

Joy Taylor: When you inherited the home from your mom, your tax basis in the property was stepped up to the fair market value at her death. So when you sell, your gain will be equal to the difference between the sales price and your tax basis in the home. Your tax basis would start with the fair market value of the home upon your mom's death. You would add to this figure certain closing costs plus the cost of any improvements you made to the home after your mom's death that add value, prolong its life or adapt it to a different use.

If you have gained from the sale, then your gain would be treated as long-term capital gain, subject to the favorable 0%, 15% or 20% tax rates on long-term gains. If you have a loss from the sale, you cannot deduct it.

5. Tax basis in a home when one spouse dies

Question: My husband and I bought our Minnesota home in 1990 for $240,000. We moved out of state in 2010 and became Florida residents. My husband died in November 2025. I am now selling my Minnesota home for $610,000. What will be my taxable gain?

Joy Taylor: Since your Minnesota home isn't your primary residence and hasn't been for many years, you cannot claim the home-sale exclusion. But when your husband died, provided you and your husband owned the home jointly, you got a step up in tax basis in the home. Your basis after his death would equal to (1) half your original basis ($120,000) plus (2) half of any improvements made to the home that can be added to basis plus (3) half the fair market value of the home upon his death. Your taxable gain would be equal to the sales price of $610,000 less the amount from the preceding sentence. I am assuming for this answer that you kept the Minnesota home as a second residence and didn't rent it out or otherwise use it for business.

About Ask the Editor, Tax Edition

Subscribers of The Kiplinger Tax Letter, The Kiplinger Letter and The Kiplinger Retirement Report can ask Joy questions about tax topics. You'll find full details of how to submit questions in each publication. Subscribe to The Kiplinger Tax Letter, The Kiplinger Letter or The Kiplinger Retirement Report.

We have already received many questions from readers on topics related to tax changes in the One Big Beautiful Bill, retirement accounts and more. We will continue to answer these in future Ask the Editor roundups. So keep those questions coming!

Not all questions submitted will be published, and some may be condensed and/or combined with other similar questions and answers, as required editorially. The answers provided by our editors and experts, in this Q&A series, are for general informational purposes only. While we take reasonable precautions to ensure we provide accurate answers to your questions, this information does not and is not intended to, constitute independent financial, legal, or tax advice. You should not act, or refrain from acting, based on any information provided in this feature. You should consult with a financial or tax advisor regarding any questions you may have in relation to the matters discussed in this article.

More Reader Questions Answered

• All Ask the Editor Q&As
• Ask the Editor: Modified Adjusted Gross Income
• Ask the Editor: Tax Filing Season
• Ask the Editor: Senior Deduction and Tax Filing
• Ask the Editor: Tax Questions on Roth IRA Conversions
• Ask the Editor: What Medical Expenses are Deductible?
• Ask the Editor: Questions on Inherited IRAs

If you need cash for a major expense, you might be considering tapping your home equity. With a home equity line of credit (HELOC), a home equity loan or a cash-out refinance, you can access the equity in your home and use that money for renovations and other expenses.

But it’s more important than ever to understand the potential risks that come with tapping your home equity. According to the Intercontinental Exchange Mortgage Monitor report, Americans hold approximately $17 trillion in total equity, with about $11 trillion tappable.

High home values and limited inventory have resulted in equity-rich but cash-constrained households. Using your home’s equity can be a risky move, so be sure you understand all of the factors involved before deciding if this is the right decision for you.

Borrowing costs remain elevated, with new pressures in 2026

Home equity borrowing is still relatively expensive, and recent economic conditions are adding more uncertainty to where rates go next.

As of April 2026, average home equity loan rates are hovering around the 8% range, according to Bankrate:

• 5-year home equity loan: 7.89%
• 10-year home equity loan: 8.02%
• 15-year home equity loan: 8.00%

Rates vary based on credit score, loan-to-value ratio and lender.

These rates are noticeably higher than what many homeowners are used to, especially those who locked in mortgage rates below 4% in recent years.

At the same time, the Federal Reserve has held rates steady through its January and March meetings, signaling a more cautious approach to rate cuts. That means borrowing costs tied to the prime rate, including HELOCs, have remained relatively high so far this year.

Geopolitical tensions, including the ongoing war in Iran, are also contributing to inflation pressure, particularly through energy prices. That added uncertainty can make it harder for rates to move lower in the near term.

In this environment, the type of loan you choose matters more. Home equity loans offer fixed rates, which can provide predictable payments. HELOCs typically come with variable rates, meaning your costs could change over time. Meanwhile, mortgage rates, which affect cash-out refinancing, tend to follow the 10-year Treasury yield and remain sensitive to inflation and broader market conditions.

When tapping your home equity can make sense

Tapping your home equity may make sense when you’re using the funds for a clear, high-value purpose. For example, you might finance home improvements that increase your property’s value, helping offset the cost of borrowing over time.

Some homeowners also use home equity to consolidate high-interest debt. Replacing a credit card balance with a rate around 20% with a lower-rate home equity loan or HELOC can reduce interest costs and simplify payments.

Home equity can also help cover large, planned expenses, such as education costs or major medical bills. In these cases, the value of the expense may justify the interest you’ll pay. Used intentionally, home equity can be a strategic financial tool — not just a way to cover everyday spending.

Use the tool below, powered by Bankrate, to explore and compare today's home equity loan and HELOC options from multiple lenders:

When tapping your home equity could be a risky move

Tapping your home equity can be risky. When you use your equity, your home is collateral. If you default on your loan, you could face foreclosure.

HELOCs have variable interest rates. While your interest rate could drop, it could also rise, meaning your payments could be larger than you anticipated, and you might ultimately pay much more in interest than you’d planned.

It’s also possible to overborrow home equity. When paired with market uncertainty resulting in fluctuating interest rates and home values, overborrowing could increase your chance of defaulting on your loan and facing foreclosure. It's always best to borrow no more money than you absolutely need, which will also help minimize what you pay in interest.

Home equity loan vs. HELOC vs. cash-out refinance

Let’s take a look at how three methods of accessing home equity compare:

• Home equity loans are fixed-rate loans, so you’ll have predictable, set payments throughout the loan’s term.
• HELOCs are revolving credit lines that you can draw from, repay and reuse. They offer flexibility, but variable rates mean your payments can change over time.
• A cash-out refinance replaces your existing mortgage with a new, larger loan, resetting your interest rate and loan terms.

Since many homeowners are locked into ultra-low mortgage rates, refinancing tends to be a less attractive option right now.

Timing matters more than most borrowers realize

Timing matters when tapping your home equity. Rates could fall later in 2026, but that’s far from certain. Waiting might help you secure a lower rate, but it could also work against you if home values decline or lending standards tighten.

The key is balancing timing with necessity. If you’re facing a time-sensitive expense, such as an urgent home repair or education costs, waiting for a better rate may not be practical.

How to decide if borrowing is right for you

This simple checklist can help you decide if borrowing against your home equity is right for you:

• Do you have a clear purpose? Tapping home equity is risky, so make sure that your purpose justifies that risk.
• Can you comfortably afford payments? With your home as collateral, you risk foreclosure if you can’t make the payments.
• Are you choosing the right product? Be sure you understand the pros and cons of each home equity product to choose the one that’s best for your situation.
• Have you compared lenders? Rates, terms and loan costs can vary from lender to lender. Compare quotes from multiple mortgage lenders to find the best option.

Think beyond access to equity

Home equity can be a powerful financial tool, but it comes with real risk. Because your home is on the line, it’s important to borrow with a clear purpose and a plan to manage the payments.

The decision isn’t just about whether you can access the funds. It’s about whether using your equity supports your broader financial goals and makes sense given today’s rates and market conditions.

Related Content

• HELOC Rules Are Changing in 2026
• 4 Ways To Use Your Home Equity To Boost Your Retirement
• What Home Equity Is and Why It's a Valuable Long-Term Investment
• How a Home Equity Line of Credit (HELOC) Works

Editor's note: This is the third article in a five-part series about all-asset retirement planning that is covering such topics as using annuities and housing wealth, making the most of tax benefits and managing investment portfolio risk. Articles one and two are It's Time to Redefine Retirement for Retirees With $500,000 to $5 Million: Here's How and Unlock Housing Wealth and Tax Benefits by Adding Lifetime Annuities to Your Retirement Plan.

For most Baby Boomers, their home represents 50% of their net worth, yet retirement planning software and advisers virtually ignore this asset in designing retirement income plans.

A Federal Reserve study shows that the share of net worth in primary residences among households headed by people ages 60 to 69 rose from roughly 40% in 1989 to just over 50% by 2022.

For those age 70 to 79, the share climbed from about 38% to 50% over the same period. In the 15 million mass affluent households led by Boomers from age 60 to 75, the principal residence has an average home equity of $750,000, out of an average net worth of $1.75 million.

In this article, we explore the reasons housing wealth is ignored and why consideration of it can increase retirement income and liquid savings to cover large health-related and uncovered expenses.

Reasons housing wealth is not included in planning

Most retirement planning leaves out housing wealth and ignores the potential of that wealth to generate income or produce liquid savings. This is despite the fact that reverse mortgages, mostly home equity conversion mortgages (HECMs), are heavily marketed.

Our research indicates that planning tools often treat HECMs simply as a "liability for loans made" rather than as a "dynamic liquidity asset" that grows over time. In fact, most planning systems treat a HECM and its growing line of credit essentially as a swap for selling the house to access that cash.

Some reasons for this planning limitation:

Possible objections to HECM. Common arguments include high closing costs and service fees, along with the fear of having the home taken because the loan eats up its value. Also, the "common wisdom" has often been "no mortgages in retirement."

Planning only for income. Income is essential, but full and robust retirement planning should also meet the objectives for liquidity and legacy. The Three L's — Lifetime Income, Legacy and Liquidity — address retiree objectives and should drive planning strategies and tactics.

Just like a business plan, if you prepare and decide first on the objectives of the Three L's, you will significantly improve your chances for a successful retirement.

Adviser licensing. Those advisers doing retirement planning for prospects or clients might be licensed to execute only a portion of a plan, from investments to lifetime annuities and finally to HECM.

They or their firms must form partnerships to implement a plan with all the product solutions that should be considered. That may require one or more large financial firms to create these partnerships or internal organizations that are multi-licensed.

Adviser training and available software. Advisers are often taught to think that housing wealth is a significant but relatively illiquid asset for retirees, which is true if selling the house or borrowing through a traditional home loan are the only approaches considered for accessing equity. Very few planning systems consider the HECM line of credit to provide liquidity.

I've read about these reverse mortgage objections from pundits and heard the same from friends, but as we are focused on providing the best retirement planning results, we had to do our own analysis.

Why housing wealth should be included in planning

Here are some reasons to include housing wealth in your retirement planning:

Addressing unmet needs. As I wrote in the previous article in this series, Unlock Housing Wealth and Tax Benefits by Adding Lifetime Annuities to Your Retirement Plan (link above), a HECM used with lifetime annuities can help mass affluent retirees secure additional lifetime income, tax advantages and liquid savings to cover late-in-life expenses beyond what their 401(k) or IRA savings alone could provide.

Events like long-term care or additional support for children and home renovation when aging in place are unpredictable, which is why an additional source of liquid savings, like a HECM, may be essential.

Cost of accessing liquid savings. There is significant savings in being able to access the value of the home without selling it. The average cost of selling a home is 10% to 15% of its sales price, not to mention the stress involved with moving.

In addition, if the house is sold at a gain, the tax cost can be another 10% to 20% — meaning that selling a house now worth $2 million to generate liquid savings might have a total cost of $250,000 or more.

Special HECM protection. HUD backs every HECM loan, ensuring that the borrower's family will not owe money at the passing of the borrower or eligible surviving spouse, even if the outstanding loan balance is more than the value of the house. HUD insurance covers any difference for the lender.

Consideration of historical results. Assumptions about HECM interest rates and projected housing values are often conservative and misunderstood, particularly if not considered as part of a full range of products.

We did our own study of the past 30 years of house prices and interest rates, available in my article Treat Home Equity Like Other Investments in Your Retirement Plan: Look at Its Track Record. You will see that the results were more positive than generally available projections.

One helpful development is that the National Association of Insurance and Financial Advisors (NAIFA) is building a curriculum that will look at this "most underutilized asset" to better understand how housing wealth fits into retirement planning conversations.

(Breaking news: We just received an invitation to a course on "Learn How to Incorporate Housing Wealth into Retirement Planning" from another organization. Do I spot a trend here?)

Retirement planning that builds in housing wealth

To design the all-asset planning method means thinking about housing wealth differently and aggregating all sources of savings — personal savings, rollover IRA savings and housing wealth — so they all work together during retirement.

Critical to that process is to design a plan with the Three L's guiding your options and using investment portfolios and lifetime annuities to manage taxes and risks. We'll cover those topics in the next two articles.

To start the process of making an informed decision about housing wealth, review one plan "with" and a second "without" that resource. Easier said than done since most planning systems are not enabled to do so.

One can also think of the "with" housing scenario as one suited for retirees who want to age in place (favored by at least 80% of retirees) and the "without" as selling your house to generate income or liquid savings and investment dollars.

The first step in the "with" plan is to access housing wealth through HomeEquity2Income, as described in my earlier mentioned article about unlocking housing wealth, by combining HECM with a qualifying longevity annuity contract (QLAC) to provide not only lifetime income, but also a source of liquidity to pay for unplanned expenses.

For the "without" scenario, we assume the house is held until sold at age 85 with the net proceeds invested as liquid savings along with other savings. A multitude of other scenarios are possible, which should be tested with the retirement planning tool.

Comparing 'with' and 'without' H2I plans

Below is a comparison of two retirement plans for our average retiree, a 67-year-old man with $1 million in each of the three savings sources. The analysis focuses on income, liquid savings and legacy savings.

What we learn from the comparison

The plan "with" H2I is able to support higher starting income ($117,000 vs $131,000) and a higher legacy at age 95 ($7.2 million vs $5.7 million) than the plan "without" H2I.

The primary sources of the "with" H2I advantage:

• HECM drawdowns from age 67 to age 84
• Avoidance of closing costs and taxes on the sale of the home

To be fair, this is a little-explored area and probably needs even more analysis.

Both plans do benefit from the inclusion of lifetime annuities and the reduction of longevity risk, as covered in the unlocking housing wealth article.

The "economic returns on investment" are consistent between the two plans, meaning that the method of aggregating and disaggregating housing wealth is more or less economically neutral.

To me, the advantages of at least considering your home's equity in retirement planning are clear. An asset that amounts to 50% of the savings built over a lifetime can benefit retirees and their families in the near future and in the long term.

Be on the lookout for the next two articles, which will cover tax efficiency and risk management of planning models.

Building a comprehensive retirement plan requires an understanding of what different products and approaches provide — as well as an understanding of how separate advisers on investments, lifetime annuities and HECM might guide you. We believe it's well worth it. To find out for yourselves, order a complimentary plan and let us introduce you to a qualified adviser.

Related Content

• An Expert Guide to How All-Assets Planning Offers a Better Retirement
• This HECM-QLAC Power Move Can Unlock Guaranteed Retirement Income
• For a Richer Retirement, Follow These Five Golden Rules
• Transform Your Retirement Plan With This Powerful Combo
• How Combining Your Home Equity and IRA Can Supercharge Your Retirement

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Drew Carrington and his wife thought they had purchased their forever home nearly six years ago during the height of the pandemic. Carrington, a managing director at iCapital, and his wife had lived all over the country before deciding their final destination would be the mountains of Georgia.

They purchased a home in a massive, 8,000-acre golf course community that boasts 35 miles of hiking trails, a fitness center and a cadre of amenities retirees dream about. With the kitchen and primary suite on the first floor, the Carringtons thought they had found the perfect setup.

But now, at age 61 — with retirement drawing closer — Carrington and his wife are rethinking that. While they still want to age in place, they aren't so sure their "forever home" will suffice.

"It is beautiful here. We don't have anything bad to say about the community or the mountains of North Georgia, but we observed two or three things that we didn't anticipate when we bought the place," Carrington said. "While the master bedroom and kitchen are on the main floor, there is a bunch of stuff that is downstairs, like the laundry room and both home offices." With Carrington's wife potentially needing a knee replacement in the future, navigating those stairs could become a major hindrance to her mobility.

Then there is the remoteness. The house sits at 2,200 feet in elevation, and the last half-mile of their driveway climbs another 800 feet. There are no sidewalks in the community; to go for a walk or bike ride, they have to drive to the trails. They are also 40 minutes away from doctors and the nearest hospital. If they need a specialist, it’s an hour-long drive to Atlanta. While the couple hasn’t listed the house yet, they have reached a difficult conclusion: this likely isn’t their forever home anymore.

"Whatever your plan, don't write it in ink. Life has a funny way of throwing curveballs," Carrington said. "Whatever your top priority is today might be different five years down the road. You have to think really hard about what is truly important versus what is just nice to have.'"

Aging in place isn't so cut and dry

When it comes to retiring, many homeowners want to age in place. After all, "home is where the heart is" couldn't be truer for Americans across the country.

A recent Pew Research survey highlighted this sentiment: 60% of respondents who own a home want to stay put. The reasons vary. For some, it’s about maintaining community ties or proximity to family and friends. For others, staying in a long-time residence provides a sense of emotional security and financial stability that a new environment simply may not offer.

However, while aging in place is a common dream, it isn't always achievable. Certain roadblocks can spell trouble for a retirement nest egg and overall quality of life. Healthcare and housing costs are among the largest outlays in retirement; with spending spikes common in the early years, your budget can easily be thrown off course.

"We observe that 60% of households (based on anonymized Chase data) are volatile spenders — meaning their spending jumps up or down greater than 20% per year during the first three years of retirement," said Michael Conrath, Chief Retirement Strategist, J.P. Morgan Asset Management. "Health care and housing costs can cause large spending spikes, so you need to prepare and have enough savings on hand to prepare for what-if situations."

Even if you have the cash to cover any surprises in retirement, there is more to aging in place you need to consider, including these three critical questions.

Here are three questions to ask before you decide to age in place.

1. Will your home still serve you as you age, or is it a 'Peter Pan' house?

One of the most fundamental questions you need to ask when deciding if you should age in place is whether your house is functional for old age, both cognitive and physical, or is it what is known as a "Peter Pan" place.

Coined by Jon Pynoos, a professor emeritus of gerontology at the University of Southern California, a Peter Pan home is one built for people who will never get old. These houses typically have multi-levels or stairs, narrow hallways, inaccessible bathrooms and inadequate lighting. Homes with floating stairs, no banisters and no bedroom on the first floor may also be a problem. They aren’t designed to prevent falls or provide independence as you age.

"Many homes require modifications to ensure safety and accessibility, and at times, it can result in significant construction and installation costs," said Conrath. If you have a Peter Pan home, you have to prepare for these costs and potential pitfalls in advance, he said.

2. Will I have access to quality health care?

You may be healthy when you retire and rarely visit the doctor, but that can change as you age. As we get older, we are more prone to falls and illnesses that could require more medical care. If your home is far from a hospital, like the Carringtons', that may be a red flag that aging in place isn't the ideal situation.

"We don’t always know the particular ailments that will affect us at old age, and while I don’t think it’s possible to really game plan for all of them, proximity to a hospital would be a really good initial indicator," said David Blanchett, head of retirement research at Prudential.

Even if you are OK with being farther from doctors and hospitals, can you afford the costs of driving and/or transportation?

3. Is it the right environment to grow old in?

Are you staying in your home because it's where you raised your children and is filled with memories, even though everyone has flown the coop? Or does your decision to stay put come from wanting to be close to family, friends and your community? If the answer is the latter, then aging in place could be for you.

When you retire, you'll have much more free time on your hands, and if you are isolated or lack the support of your family, friends or community, then loneliness may derail your retirement.

But it's not only that. Is the location convenient to get to stores, restaurants, entertainment and places of worship? Will you be able to handle the weather if your region gets a lot of snow in the winter or faces extreme heat or wildfires in the summer?

"Is the home by the things and/or people you want in close proximity as you get older?" said Blanchett. "This includes friends, family and all the things that really make life fulfilling and ensure you can stay connected."

Nothing is perfect

Ideally, you can answer "yes" to all three questions, but if you can't, it doesn't mean you shouldn't age in place. It simply means you should approach the decision with your eyes wide open, considering variables that could shift over time.

The Carringtons are currently in the sorting phase of deciding where they will set down their retirement roots. They know they can't check off every single box, but they want to make a decision that meets both of their long-term requirements.

"Its pretty tough to get something that fulfills all three boxes, especially for the entire duration of retirement," said Blanchett. "Life can be a bit of a hot mess, and I think it’s important to take the right perspective. Honestly addressing these questions can help from a planning perspective."

Related content

• Should You Skip the Wait and Prepay Your Retirement Dreams?
• How to Plan for Aging in Place: Five Key Factors
• Why Picking a Retirement Age Feels Impossible (and How to Finally Decide)
• Retirement Savings On Track? How Much You Should Have By 60 and 65

Before the 2008 housing crisis, some lenders offered homeowners 80/20 “piggyback” loans to help cover a down payment while avoiding private mortgage insurance (PMI). Borrowers took out a second mortgage or HELOC for 20% of the home’s value, leaving the primary mortgage at 80% and eliminating the need for PMI.

When home prices crashed, many of those second mortgages lost value and quietly went dormant. But now, loans long assumed to be settled are resurfacing.

Known as zombie mortgages, they’re catching homeowners off guard — leaving some suddenly on the hook for far more than expected and, in some cases, facing foreclosure.

Why zombie mortgages are resurfacing now

When the Great Recession hit in 2008, home values fell and many homeowners struggled to keep up with second mortgage payments. Some borrowers defaulted, and as prices dropped, those second mortgages became largely worthless to lenders.

In many cases, lenders could have seized and resold the homes, but the math did not work. Sale proceeds often would not have covered even the primary mortgage, so second liens were written off as losses. Collection efforts slowed or stopped altogether, and many borrowers stopped receiving statements. Over time, these loans simply went dormant.

But home values have surged, changing the math behind those once-worthless loans. The median U.S. home price has nearly doubled from about $214,300 in 2009 to more than $405,000 in 2025, according to Federal Reserve Bank of St. Louis data.

That renewed equity has made these old debts valuable again. Debt buyers are purchasing them for pennies and attempting to collect. If homeowners cannot repay, those buyers may move to foreclose and sell the property for a profit.

How big is the problem?

The zombie mortgage problem is widespread. An estimated hundreds of thousands of these second mortgages still exist nationwide, and some homeowners are receiving collection notices decades after they believed the debt had been resolved.

The sudden reappearance can be jarring, and for those unable to pay, the consequences are serious — including the risk of foreclosure, even if they are current on their primary mortgage.

Why homeowners didn't know they still owed the debt

Several factors have led homeowners to believe their second mortgage debt was discharged or resolved. In some cases, borrowers assumed the second loan was included in a modification of their primary mortgage. But if the second loan was held by a different servicer, it often was not included and simply went dormant.

Communication issues have also played a role. Some homeowners received little to no contact from servicers for years, sometimes more than a decade, even as interest continued to accrue in the background.

In other cases, tax documents suggested the debt had been cancelled, and the second mortgage disappeared from credit reports. Together, these signals reinforced the belief that the loan had been resolved, when in reality it remained outstanding.

What happens when a zombie mortgage comes back

A zombie mortgage can quickly turn a homeowner’s finances upside down. Debt collectors often arrive with sudden payment demands, leaving borrowers scrambling to understand a debt they may not have known still existed.

The situation is often compounded by time. Years of missed payments mean interest and fees have continued to build, leaving borrowers owing far more than the original balance.

Even homeowners who are current on their primary mortgage can face foreclosure if they cannot pay the second lien. As a result, many are forced to quickly negotiate repayment plans or risk losing their homes.

Are zombie mortgages legal?

Zombie mortgages are typically legal if the debt was never formally discharged, but there are some grey areas around how the debt is handled.

In 2023, the Consumer Financial Protection Bureau (CFPB) provided guidance to debt collectors, indicating that foreclosing on homes with mortgages that are past the statute of limitations may violate the Fair Debt Collection Practices Act.

According to the National Consumer Law Center Digital Library, the statute of limitations for foreclosures varies from state to state, but in many jurisdictions, the statute of limitations for foreclosures is six years.

Debt collection practices have also raised concerns. Some debt buyers use aggressive tactics, including threatening foreclosure on loans that have been dormant for years. In some cases, documentation has been called into question. Bloomberg has reported on families contacted by collectors whose records appeared inconsistent, including instances where documents were dated years before the debt was actually acquired.

Regulatory oversight remains uncertain. The CFPB was working to address the gray areas of zombie mortgages, but its work is still in limbo after the Trump Administration ordered the Bureau to stop all work in 2025, according to CNBC. Consumer Reports states that CFBP employees filed a lawsuit to stop mass layoffs, but most of the Bureau’s enforcement actions have been dropped, leaving consumers with fewer protections as these cases resurface.

How these old loans can resurface

Zombie mortgages are often tied to second mortgages or HELOCs issued during the early 2000s housing boom. After a foreclosure, refinance or bankruptcy involving the primary mortgage, the second lien may have gone quiet, leading homeowners to assume it was dismissed or satisfied.

In many cases, however, the loan was never formally released, even if statements stopped arriving. Over time, those dormant loans were sold to debt buyers, who can attempt to collect years later. With home prices rising, these old second mortgages have become more valuable, making them an attractive target for collection.

Many homeowners only discover the debt when they try to refinance or sell their home. Others are alerted by a notice from a new loan servicer demanding payment. In some cases, the loan surfaces during a review of property or title records.

How today's borrowing trends echo the past

Today’s borrowing trends are increasing the likelihood of another wave of zombie mortgages. According to HousingWire, rising property taxes, higher home insurance costs and elevated home prices have made refinancing or moving less practical for many households.

Instead, more homeowners are turning to second liens and HELOCs to tap their home equity for large expenses, increasing the use of these types of loans.

While these tools can serve a purpose, the growing risk of zombie mortgages highlights the pitfalls tied to second liens and HELOCs. These loans can become problematic when borrowers lose track of terms, balances or servicing changes over time.

The lesson is practical: homeowners should closely review loan documentation, monitor balances and not assume a debt has been resolved simply because statements stop arriving.

Periodically checking property and title records can help confirm whether a second lien is still attached to the home and reduce the risk of costly surprises later.

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Question: I’m 55 and married with a $1.5 million 401(k) balance. I earn about $150,000 a year and expect to remain in my job until I retire. I’m planning a major home improvement project, but I lack the immediate cash to cover it.

Since the interest rate on most credit cards is astronomically high, I’m considering a 401(k) loan instead. Is this a sound strategy for someone of my age, or will it harm my future retirement?

Answer: When it comes to borrowing against your traditional 401(k) or Roth 401(k), the conventional wisdom is to avoid it at all costs. After all, it's less money in your account that can grow and compound.

But in some circumstances, borrowing against your 401(k) may not be a bad move, especially if you have a sizable retirement savings, are planning to remain in your job for a while and can afford to pay it back.

"Generally speaking, we advise clients to allow it to grow tax-free, at least while you are employed, but from time to time, it makes sense to take out a 401(k) loan," says Stephanie Williams, senior wealth advisor at AlphaCore Wealth Advisors.

"If you have an urgent home repair that needs to be done right away, a medical expense or funeral costs, it can make sense to take a loan provided you have strong job stability and plan to repay it quickly."

Start by asking three key questions.

1. Are your savings on track?

Take your retirement savings balance for starters. With $1.5 million already saved, you are ahead of many Americans.

According to JPMorgan Chase, a 65-year-old making $150,000 should have $1.34 million saved to live comfortably, and you already exceeded that amount, 10 years early. That means you have ample time to save even more for your golden years.

2. Is your job secure?

Then there is your job stability. When you borrow against your 401(k), you can spread out repayments over five years if you want to, but if you leave your job, you typically have until the tax filing deadline, including any extensions, to pay it back.

If you don't, that loan will be treated as ordinary income and taxed at your marginal rate, which, for your income level, would be 22% in 2026. That's why financial advisers say it makes sense only if you have high job security.

3. What is the 401(k) loan's interest rate?

Finally, there is the interest rate to consider. With a 401(k) loan, the interest rate tends to be much lower than if you used a typical credit card. At last check, the average APR on a credit card is 19.58%, according to Bankrate, while the average interest charged on a 401(k) loan is currently around 7.75%.

Most 401(k) loans set their interest rate at the Prime Rate plus 1%, which tends to fluctuate. As of March 2026, the Prime Rate, the base interest rate that commercial banks charge their most creditworthy corporate customers, is 6.75%, resulting in a loan rate of around 7.75%.

Plus, with a 401(k) loan, that interest isn't going to a bank or credit card issuer; it's paid back to your own 401(k). You are paying yourself interest, but using it with after-tax dollars.

Keep in mind that every retirement plan will differ. Check with your plan administrator to determine the terms and interest rate before you take out a loan.

It's worth noting that 401(k) loans are usually capped at $50,000. If your home improvement needs are greater, you will have to find the balance elsewhere.

Advantages of a 401(k) loan

There are other benefits to borrowing against your 401(k) instead of charging the cost of the home improvement.

For starters, it won't impact your credit score because it doesn't show up in your credit report. If you plan to finance a big-ticket item in the future, you won't have to worry about paying more in interest.

It can also be quick and easy to take out a loan. You can often have the money in your bank account within three to five days without filling out paperwork or explaining the purpose of the loan.

Since you are using the loan for home improvement, the outcome will be to increase your home's value and build equity. (Some home improvement projects have a higher return on investment than others, so do your research first.) Certain renovations can be added to your home's cost basis or the total amount invested in your home, which could reduce your capital gains taxes if and when you sell the home, provided the gain exceeds the $500,000 exclusion for married couples.

It's also better than a 401(k) withdrawal because of your age. You won't have to pay the 10% penalty that is associated with withdrawals when you are under 59½. (However, since you are 55, you might not have to pay the 10% penalty for a 401(k) withdrawal under the "rule of 55," but only if you decide to leave your job.)

One caveat: Make sure your plan doesn't suspend the ability to receive the company match while the loan is outstanding. If it does, you are walking away from free money. In that case, you'll have to do the calculations to see if the lower interest rate from a 401(k) loan is worth it.

Options other than a 401(k) loan

Judging from your question, your options may be limited when it comes to borrowing money for your home improvement project, but if you have a home, a good credit score and equity built up, there could be cheaper ways to access capital.

For instance, a Home Equity Line of Credit (HELOC) allows you to borrow against a portion of your home’s equity. You pay interest only on the amount you withdraw.

Keep in mind that HELOCs typically have a variable interest rate during the draw period, which means the interest can fluctuate. Since your home is used as collateral, you could face foreclosure if you can't pay it back.

If you have a good credit score, you could take out a credit card with a 0% introductory rate to finance part of your loan, but only if you are certain you can repay the loan within the time frame allotted. (And there's no guarantee you can get a credit limit high enough to cover the cost of your project.) Otherwise, the rate will reset and could be much higher than the 401(k) loan interest rate.

When a 401(k) loan doesn't make sense

A 401(k) loan may work for you, but there are instances when it isn't worth it.

If you borrow from your tax-advantaged retirement plan and stop making contributions to pay back the loan, it will be a double hit. There is no new money coming in, and the amount you borrowed is no longer growing. If you're doing this to consolidate debt, which you aren't, and rack up more, you could end up with a 401(k) loan plus new credit card balances.

"Borrowing from your 401(K) is an option that we educate all clients on," says Williams. "It depends on the rate and your personal situation. Consult with a financial adviser who can guide you through the process."

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America is in the middle of its biggest-ever retirement wave. And for real estate investors who spent decades building wealth, one property at a time, the exit strategy may be the hardest deal they've ever had to make.

I had lunch recently with a couple I'll call Brenda and Eddie, who are in their mid-60s, and both exhausted. They spent 30 years assembling a tidy portfolio of rental properties in the "Tony Houston" suburbs, consisting of: five houses, a small strip center and a 12-unit apartment building.

On paper, they were millionaires several times over. In practice, Eddie told me, he felt like an unpaid superintendent who couldn't quit.

"We were supposed to be in Italy this spring," Brenda said. "Instead, we're replacing a roof on one of the rental properties."

Eddie and Brenda aren't unusual — in fact, they're a demographic tidal wave. What's unusual is how few investors in their position understand all their options for getting out and how costly that blind spot can be.

The Peak 65 zone

Demographers call the period from 2024 through 2027 the "Peak 65 zone." During this stretch, more than 4.1 million Americans are turning 65 each year — roughly 11,400 every single day.

That's a sharp jump from the 10,000-per-day pace of the previous decade, driven by the heart of the Baby Boomer generation finally reaching the traditional retirement age.

Many of these soon-to-be retirees are real estate investors. They bought duplexes in the '80s, apartment buildings in the '90s and warehouses during the 2008 fire sale.

They built real wealth. But that wealth comes with strings attached, and the biggest string of all is the one no one likes to talk about: Many real estate investors feel trapped.

The three-sided trap

The trap has three walls, and most landlords don't see all three until they're already hemmed in.

Wall one: The tax bill. Sell a portfolio of long-held, fully depreciated properties, and the IRS is going to take a serious chunk. Federal long-term capital gains rates top out at 20%. Add the 3.8% net investment income tax (NIIT) that applies to higher earners. Then add depreciation recapture, taxed at 25%. Layer on state income taxes — which vary, but in many states run north of 5% — and the total take can exceed 40% of your gains.

For people like Eddie and Brenda, that's a check to the government that could easily top a million dollars.

Wall two: The reinvestment problem. Even after paying the tax, you're left with the question of where to put the money. A financial adviser may suggest a managed stock-and-bond portfolio. Under the traditional 4% withdrawal rule, $1 million in after-tax proceeds might generate $40,000 a year — a far cry from the $80,000 or $90,000 that same equity was producing in rental income.

And unlike a building, a stock portfolio can lose 30% of its value in a single quarter.

Wall three: The emotional aspect. After decades of being landlords, investors often feel trapped by their own success. They're too tired to keep going but too smart to accept the alternatives they've been shown. So, they stay. They replace the roof on the next rental property. They skip Italy.

A door most investors don't know exists

"So often times it happens that we live our lives in chains/ And we never even know we have the key."

The Eagles weren't singing about the U.S. tax code, but they might as well have been.

The 1031 exchange has been part of the code for more than a century. Most experienced real estate investors know the basics: Sell one property, buy another of equal or greater value within strict time limits and defer your capital gains indefinitely. It's one of the most powerful wealth-building tools in real estate.

But for years, the 1031 exchange had a significant limitation for people like Eddie and Brenda: It required them to buy more property. And buying more property was exactly what they were trying to stop doing.

That changed in 2004, when IRS Revenue Ruling 2004-86 allowed interests in Delaware statutory trusts (DSTs) to qualify as replacement property in a 1031 exchange. This single ruling opened a door and transformed the retirement landscape for real estate investors.

A DST is a legal entity that holds title to real estate — typically large, institutional-quality properties such as Class A apartment complexes, medical office buildings, industrial distribution centers, self-storage portfolios, senior living communities and national-brand hotels.

Many DST offerings are capitalized at $100 million or more. Through fractional ownership, smaller investors can access these properties with minimums as low as $100,000.

The mechanics are straightforward. An investor sells their actively managed property, executes a 1031 exchange and moves the proceeds into one or more DST investments. All capital gains are deferred.

The investor transitions from being a hands-on landlord to a passive owner receiving monthly income from institutional-grade real estate. No midnight phone calls. No evictions. No tenants, toilets or trash.

Because DSTs are pass-through entities, fractional owners also participate in depreciation and amortization. That often means a significant portion of the monthly income is tax-sheltered, preserving the same tax advantage investors enjoyed when they managed properties themselves.

So, what happened to Brenda and Eddie?

They did their homework. They worked with a registered investment adviser who specialized in 1031 exchanges and DSTs. They sold the strip center and three of the five houses, executed the exchange and diversified the proceeds across four DST investments:

• A multifamily complex in the Southeast
• A medical building in Texas
• A self-storage portfolio in the Sun Belt
• An industrial warehouse leased to a national logistics company

They paid zero capital gains tax at closing. Their net worth carried forward intact, generating monthly income that exceeded what the sold properties were producing, without a single tenant to manage.

They kept the apartment building and two houses for now: planning to exchange those in a future phase when they're ready.

They went to Italy. And — did I mention? — they didn't write the government a check for $1 million.

Important caveats for prospective investors

DSTs are compelling, but they aren't for everyone, and it would be irresponsible to pretend otherwise.

First, DSTs are available only to accredited investors. Under current SEC rules, that means a net worth exceeding $1 million (excluding your primary residence) or annual income exceeding $200,000 individually (or $300,000 for married couples) for each of the previous two years, with a reasonable expectation of the same going forward.

Second, DSTs are illiquid. Hold periods typically range from five to seven years. During that time, you receive income distributions but cannot access the principal.

When the real estate sponsor decides market conditions are right, the property is sold and proceeds are returned, at which point the investor can execute another 1031 exchange or recognize the gains.

Third, DST investments carry the same fundamental risks as any real estate investment: Market downturns, vacancy, property damage and interest rate shifts. The passive nature of the investment means the investor has no control over management decisions.

Finally, DSTs are SEC-regulated securities offered through broker-dealers or registered investment advisers who have been vetted by the sponsoring firms. Working with a fiduciary adviser — someone legally obligated to act in your best interest, without commissions creating conflicts — is strongly recommended.

The door is open

The 1031 exchange has survived repeated legislative attempts to cap or eliminate it. Recent legislation preserved it intact, with no limits on deferral amounts.

Combined with the DST structure, it offers a pathway that would have been unthinkable a generation ago: The ability to retire from the landlord business, defer the full tax hit and continue earning passive income from real estate you never have to manage.

For any landlords among the 11,400 Americans turning 65 today — and the 11,400 who will do the same tomorrow and the day after that — it's a conversation worth having before the next roof needs replacing.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

To help you understand what is going on in the commercial real estate sector and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here's the latest…

The Iran war hangs heavily over the housing market, tempering expectations for what many had hoped would be a strong spring selling season. While home buying is likely to improve modestly over the course of the year, sales will still run at a sluggish pace on account of challenging affordability and elevated economic uncertainty that continue to discourage prospective buyers.

Many buyers remain on the sidelines due to elevated mortgage rates, which have surged as Treasury yields climb. The average mortgage rate for a 30-year fixed loan finally dipped below 6% in late February, for the first time since 2022. However, rates quickly rebounded in mid-March to their highest level since September, just a few weeks after the Trump administration's announcement of the U.S.-Israeli attack on Iran.

While mortgage rates currently remain in the low 6% range, the conflict is injecting significant volatility into the market. If the fighting drags on, rates could be pushed even higher. This environment, combined with weakening consumer confidence, is undermining buyer sentiment during the critical spring selling season. While this season is shaping up to be slightly better than last year's — when rates hovered near 7% and trade policy volatility dented confidence — the recovery remains fragile.

Tepid sales and historical lows

Existing-home sales will remain tepid throughout 2026. Data show sales have averaged a 4.0 million-unit pace in the three months ending in January, which is approximately 37% below the peak pace hit in late 2022 and 20% below the 2019 average. While a jump in sales in December offered an encouraging signal, the subsequent slump in January and the minor gain in February confirm that the housing market isn't yet on solid footing.

The market's struggle to maintain momentum is hardly surprising, given how extremely stretched housing affordability has become over the past few years. Mortgage payments for first-time buyers are still near the highest levels since the 1980s (adjusted for inflation). Not surprisingly, the share of first-time home buyers in the housing market fell to a historic low of 21% last year, down from 31% in 2020. Meanwhile, the median age of first-time home buyers rose to an all-time high of 40, up from 33 in 2020.

The "lock-in" effect and pricing

Single-family inventory is increasing at a sluggish pace as many owners feel "locked in" by pandemic-era mortgage rates. These homeowners are often unwilling or unable to sell, as doing so would require taking on a new mortgage at a much higher rate. Currently, about 80% of outstanding mortgages carry rates below 6%, and nearly a third are between 3% and 4%. This issue is most prevalent in pricey coastal markets.

According to Redfin, these conditions are keeping price growth in check. The share of homes sold below asking price last year rose to the highest level since the pandemic, while the average discount was the highest since 2012. In 2025, the number of home sellers exceeded prospective buyers by the largest margin in over a decade.

Headwinds for home builders

The conflict in Iran poses significant challenges to the home building sector. Sustained high oil prices are expected to increase input costs while simultaneously weakening demand through lower consumer confidence and higher mortgage rates. Oil-based products, including asphalt, plastics and vinyl, face immediate price pressures, as well as energy-intensive manufactured products like insulation, drywall and cement.

Builders continue to grapple with excess inventory, prompting pullbacks in single-family permits. Building permits have been flat-to-down over the past three years. In fact, housing starts hit a five-year low in October 2025. Meanwhile, weak new-home sales have pushed inventories higher. Supply stands at 7.6 months at the current sales pace, well above a healthy market of six months. As a result, 37% of builders cut prices in March, up from 29% a year ago.

Policy responses

Policymakers have introduced various remedies, but their effectiveness remains an open question. One strategy involves the president's order to Fannie Mae and Freddie Mac to buy more mortgage-backed securities to increase liquidity. Another proposal focuses on limiting institutional investor purchases to less than 20% of single-family homes. However, critics point out that only about 2% of the market is actually captured by big institutional investors, suggesting such measures may have a limited impact on affordability.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

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Most of our day-to-day lives are spent in our homes, so of course we want to properly invest in them, making them as comfortable and beautiful as possible. But a trendy home upgrade might not just change your living situation; it can have a long-term impact on your financial situation as well — and not only because of the upfront costs that go into a house addition. Factors like insurance, utility bills and weatherproofing can all lead to a lifestyle creep trap that irreparably damages your current financial state.

Still, that doesn't mean you shouldn't splurge on the hot tub or that you need to halt construction on your new wing. The benefits of an upgrade can outweigh major costs. Here's how to determine if your dream housing changes are really worth it for you, as well as tips to keep your finances in check.

What are home upgrades with hidden financial downsides?

Unfortunately, most luxurious upgrades to your home require ongoing fees.

One of the most popular additions to a house is a pool or a hot tub, which makes sense: It's visually appealing, a place to relax, a workout spot and fun for the whole family in one. But water can be dangerous, so getting one will inevitably lead to a spike in your insurance costs.

Plus, pools require a lot of maintenance. They need to be cleaned often, and the water needs to be treated with chemicals regularly to keep them safe for swimming. Many people will pay to outsource these tasks rather than deal with the weekly upkeep of their pool — and even if they don't, they still have to regularly buy the necessary equipment. We haven't even gotten to the increase in your water and electricity bill, especially if you're heating a hot tub.

Another way people choose to fix up their home is by building a new part of the home altogether: An extra bathroom, a new wing to the house, even a separate guest home altogether on the property. Designing and constructing these additions obviously costs a pretty penny, but again, the cost of your utilities will absolutely go up if there is more space in your home to heat, air condition or run water through. Plus, by expanding the square footage of your home, you risk expanding the size of your property taxes, too.

But even subtle home upgrades can be problematic for your finances. Skylights might make your space airier and more natural, but you'll also have to account for weather — it might take more energy to heat your space, and storm insurance will become steeper. Fireplaces are a cozy and chic way to transform a room, but chimneys require maintenance to run safely, and again, insurance comes into play.

Adding a smart home system may make your day-to-day easier (plus, it can feel so fun and futuristic to have tasks as varied as making your daily pot of coffee or turning on your lights become automated), but again, there are fees (and often subscriptions!) involved in keeping these operations running.

Simply put, in almost all cases, enhancing your home won't just be a one-time investment. You will need to spend more consistently to maintain your new lifestyle.

How to determine if your home upgrades are worth it

Ultimately, a home upgrade can change your life for the better, even if there are more costs to consider with it. What's most important is to determine if it's really worth it for you.

For example, if you have children and grandkids clamoring for a pool, or you personally love to swim, then it does add real value to your life. Similarly, if you hate your current bathroom, a luxury remodel may drastically change your day-to-day happiness.

Of course, it's not just about figuring out if you really want it. You'll want to carefully comb through your finances and consider every angle. It's not just about whether you can afford the construction or the installment — look at how service fees, utility bill changes and increases in insurance alter your monthly budget. That can help you really understand if your home upgrade is worth it.

That said, even if home upgrades are costly, they can also enhance your finances. Those changes can boost your home's property value, especially if you're doing something like transforming a bathroom or kitchen, or adding extra space. (This is particularly smart to consider if you plan to move eventually.) Remember to keep records of your invoices for capital improvements so you can account for them when you sell the house.

Plus, outdated areas in your home can lead to future costs. By adding in a nice HVAC system or rewiring your plumbing, for example, you may be avoiding costly repairs — and getting a nicer living experience at the same time.

In addition, it's worth considering the ways updating your home can actually generate income for you. A guest house or new addition can become a rental property. Adding a hot tub can make your home an attractive option on Airbnb. There are ways to actually reverse the sting of lifestyle creep if you're entrepreneurial about how you're using your home.

Tips to avoid lifestyle creep with home upgrades

It's not always easy to accurately picture what your finances will look like after a big change, like adding onto your home. If you're worried about an upgrade leading to lifestyle creep, it's best to consult with a financial adviser. They can walk you through associated costs and discuss your new budget with you, helping you avoid any major monetary setbacks you weren't anticipating.

You should also set guardrails each time you plot a big project. Determine how much of your income you're comfortable devoting to these home upgrades — which includes the potential price leaps — and then ensure you don't go over that.

And before you make your move, do your research. Is there a cheaper alternative that'll bring you similar joy? Maybe you don't need to build a whole new fireplace, you just need some new lamps for your living room. Or maybe heated floors aren't necessary when you can splurge on a gorgeous new rug instead. You can also talk to people who have the home features you're lusting after to see if they actually have a tangible effect on people's happiness, or if they regretted spending the money.

Ultimately, it's undeniable that a home upgrade will impact your financial situation. Yes, it can enhance your property values or even generate income for you, and it can also lead to spikes in your taxes, utility bills and insurance costs. But if you can swing the money, adding the features that make your house your dream home can definitely be worth it – after all, if you can have margaritas at your very own backyard pool and tiki bar, spending on vacations may be less tempting anyway.

Turning a home into your dream space often comes down to how you finance it. The tool below, powered by Bankrate, can help you weigh your options before you commit.

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My husband and I took the plunge last year and bought a house. After more than a dozen years of apartment living in New York City, I was excited by the prospect of having my own four walls and getting to control a thermostat.

But I'd heard enough about energy costs to factor a home's energy systems into the equation while house hunting, and my husband and I are reasonably environmentally conscious, so while we weren't actively looking for a house with solar panels, we considered it a plus that the house we liked had them.

We closed on the house at the start of summer — and immediately came to adore the solar panels as temperatures soared. Here's what I've learned so far about buying a house with solar panels on it.

1. Step 1 is to ask if they're owned or leased

The Department of Energy has a useful guide of what questions to ask if you're buying a house with solar panels. While you're in the house-hunting phase, it's key to ask if the solar panels are leased or owned outright by the sellers.

Typically, if they're leased, that means that either you'll assume the lease — and have one more bill to look out for — or the seller might agree to pay off the balance with the sale. If you're going to assume the lease, that means more steps to transfer it, typically working with the solar finance company or lease provider.

Your mortgage lender might need to review or approve the terms, since it's a long-term financial obligation tied to the home.

In my case, the solar panels were owned outright, which meant they were likely factored into the overall listing price for the house and became mine when I bought it. To me, that was a benefit as the house was within our budget, and I didn't have to do any of the legwork involved with installing or leasing solar panels.

A home with solar, on average, across the U.S. sold for 6.9% more than those without, according to a 2025 analysis of Zillow data by SolarReviews, meaning an additional $29,000 for a median-valued home.

After we closed, the seller got us in touch with her contact at the solar company, so we had a contact ready when anything comes up.

2. You need to check the roof's history

Your solar panels are only as secure as what they're sitting on. While house hunting, you should ask when the solar panels were installed — and when the roof was last repaired or replaced.

Your state might require the seller to disclose how old the roof is and if it has a transferable warranty. That will help you know if you're accidentally signing up for a big repair in your near future or not.

You should also ask for documentation on the solar system itself, including the installation certificate, warranty details and the original installer's information. Having these on hand can make it easier to address repairs or service issues later.

That paperwork matters. Roof warranties and solar panel warranties often have specific terms, and you might need proof of installation or transfer to keep them valid. Without it, you could end up paying out of pocket for repairs you assumed were covered.

Beyond that, after you buy the house, you should keep an eye on the state of the roof and make sure your gutters are properly maintained. This is true in any house, but when you've got expensive technology resting on your roof, this is extra important.

3. Enjoy your energy bills

The AC in our house is powered by the solar panels, and when we got our first ConEd bill over the summer, we were delighted to see it was about $20, which is the official base cost to be maintained on the grid.

Like many households with solar, we're still connected to the grid. It works like this: The solar panels generate electricity that the home uses first. If we need more power than the panels produce, the house then draws from the grid. If we use less power than the panels produce, we earn credits with the utility company that can be applied in future months.

So far, our electric bill has remained about $20 each month, with the exception of February, when we kicked into the grid and were charged. But by the next month, as the snow cleared, it was back down to $20.

While I know we paid more for the house because it has solar panels, these electricity bills make me feel good about that, especially since energy costs rise over time, while I paid a set amount for the house.

4. Consider changes to make more use of your panels

The major appliances in our house, like the stove, were already electric, but if they weren't, I'd consider if it would be worth the cost to replace them. I'll admit that moving from a gas stove in my last apartment to an electric stove here took some adjusting, but you can get the hang of it.

A bigger decision for us is around our heating system. Our house's sellers had recently installed a new AC system, but left the heating to oil-powered baseboards. The baseboards work great, but I can't lie: After months of $20 electric bills, getting that first oil refill bill was a tough pill to swallow, and I cringed throughout the winter. That got much worse this month as the war in the Middle East kicked oil prices even higher.

We've been looking into the option of switching our heating to a heat pump so everything is electric, but it's a bit of a gamble with a high upfront sticker price. We don't know for sure if our solar panels would generate enough power to cover the heat pump through winter, or if we'd just end up stuck with a high electric bill instead of a high oil bill, and installing a heat pump comes with a host of specifics to figure out.

One workaround people do is to install a heat pump, but keep the baseboard heaters and oil as a backup for very cold winter days. In that case, though, we'd soon have to replace our boiler, so would it be worth the cost to replace the boiler and also install a heat pump? These are the kind of unknowns that come up, and it's a decision we're still working out.

5. Do you need more add-ons?

A decision that was easier for us was around getting an electric vehicle. As used EVs are becoming less expensive and gas prices are rising, many people are considering if it's worth making the trade. If you have solar panels that already generate decent energy, this can be a fairly straightforward decision.

To power your EV, you need a charger. There are many different options for how you go about installing a charger, including whether you choose to upgrade your breaker panel and what kind of charger to get.

You should consult with an electrician (or two or three) about this. While the EV tax credit expired last fall, there is a federal EV charger tax credit that accounts for 30% of hardware and installation costs, up to $1,000. It expires June 30, so we're acting fast to get this done.

If you're shopping now, these three top-rated home EV chargers on Amazon are worth a closer look.

But let's say you want to get an EV, but you don't think you produce enough electricity for it. In that case, you might wonder if it's worth it to add more panels, if your home has the room for them. You should discuss this with your solar company.

Keep in mind, though, that adding solar panels to an existing system is not as simple as it sounds. It often involves going through the full permit process and comes with a high cost.

One other add-on to consider is a battery. The Department of Energy suggests you find out if the system has a battery when you buy the house; like a generator, "this setup can help you keep the lights on if the power goes out," the department says. "If the system has a battery, find out how old it is, who installed it, and whether it is under warranty."

If it doesn't, you might consider whether it's worth adding on. This is a pertinent decision if you live in a place with frequent power outages, such as one prone to storms with above-ground power lines. But again, adding a battery comes with high upfront costs, so you should be honest with yourself about how much the peace of mind is worth to you.

Take your time, observe and react appropriately

Every time I've asked about switching to a heat pump or adding a battery, I get the same response: Wait a year and see what happens. You won't know everything about your solar panels and what they get you at the moment you buy a house, but over time, you'll be able to see how it goes.

Solar panels' effectiveness is determined by many factors, from how hot it gets in the summer, to how many people live in the house and how they use appliances, to how snowy a winter is. Even the sellers' experience with the same house won't necessarily mimic how your experience will be.

Many people took advantage of federal and state tax credits to install solar panels. While those federal credits are now expired, the solar panels are still there, so more people are facing the idea of buying a home that comes with solar panels. There are many factors involved, but so far, I've found it a valuable decision.

I'm still learning, so if you have any tips, feel free to reach out.

Related Content

• EV Charger Tax Credit: What You Need to Know for 2025 and 2026
• A Hidden Cost Driving Higher Electric Bills and Shorter Appliance Lifespans
• Heat Pumps vs Solar Panels: Which Saves You More on Energy Bills?