A 10-mile move between New Jersey and Pennsylvania costs retirees $10,000 yearly due to tax and cost-of-living differences.
A couple retiring in Ewing, New Jersey, faces $10,000 less in annual spendable income than an identical household 10 miles away in Yardley, Pennsylvania. The gap stems from New Jersey’s 4% property tax rate versus Pennsylvania’s 2%, combined with higher state taxes and a 12% cost-of-living premium.
Both couples hold a $1 million dividend portfolio and budget $60,000 annually, but federal tax parity leaves the disparity driven by state and local levies. Over 20 years, the $10,000 annual shortfall compounds to $410,000 at a 7% reinvestment rate.
The comparison assumes identical spending habits, Medicare enrollment, and portfolio income, isolating geography as the sole variable.