I’m in California and had been considering that we may move to a cheaper state for retirement. Things changed during the pandemic, I lost my job earlier than I expected but I gathered 23 years of government savings plans. My new employer has offered to move me out to another state that was not on my list of retirement plans but is good for retired folk. Its a no income tax state.
What I’m wondering, is I understand that even though I’m not retirement age yet, I can start making withdraws from my 457 account penalty free. I’m considering using it to try and keep my home in CA and buy something else in this other state. So my 457 was tax deferred when I put in. If I move to this new state that has no income tax. Will I be able to escape paying any taxes on it?
Why do you want to keep your house in CA? Are you planning to retire in CA?
A state with no income tax does not mean you won’t owe federal taxes on the money.
Being a landlord on a house in Cal, while living in another state is filled with potential problems, including Cal income tax
Main reason for wanting to keep my home in CA is as a safety net if things don’t work out. We could come home pretty easily. I think if I were to sell and try to come back I couldn’t afford it. We’ve got super low property taxes and a very low loan rate. Either one of those things going up on me and I couldn’t come back probably. Secondly I wouldn’t mind having another type of investment if I could figure out how to make it all happen. I know it wouldn’t be easy to maintain a rental but I do have resources. I have family and friends in the management business as well as connections to folks who could do maintenance when needed.
Ultimately, if things work out in our new state and the place becomes too hard to deal manage, then I’d probably sell. I’ve never done anything like this either. Am I crazy?
[quote=“NorCalSkinny, post:5, topic:4591”]
Am I crazy? [/quote]
It’s never crazy to keep your options open.