Trying to determine where you should head for your golden years can be tricky. The state you choose has a significant impact on your life, particularly when it comes to how long your savings will last you. That’s why it is crucial to select the right destination. While Nebraska might not be on everyone’s radar, that doesn’t mean you shouldn’t keep it on the table. The Cornhusker State has a ton to offer, especially when it comes to overall affordability. If you are wondering what it would take to retire well in Nebraska, here’s everything you need to know.
Cost of Living
One of the first steps you should take when trying to decide where to retire is to examine the state’s cost of living. Cost of living scores give you ideas about a region’s affordability, allowing you to estimate how far your savings may go.
With cost of living scores, the national average is always (and will likely forever be) set at 100. When any state receives a score above 100, it showcases that living in that area costs more than the national average. When a state receives a score that falls below under 100, it’s an indication that state is cheaper than average.
Nebraska is one of the more affordable states in the country. Its overall cost of living score comes in at 92.6, showcasing that it usually costs less to live in the Cornhusker State than most of the rest of the nation.
The state of Nebraska also doesn’t have a single cost of living category score above 100. For groceries, utilities, and transportation, the scores are 97.8, 89.5, and 96.1, respectively. The healthcare score sits at 99.4, which is just slightly below the national average.
One area where Nebraska really shines is housing. The Cornhusker State’s housing score is a modest 83.7.
That score is augmented by the average home value in Nebraska, which comes in at just $189,139. That’s $74,212 below the national average, which sits at $263,351. So, if there were two carbon-copy properties, one in Nebraska and one in a state that mirrors the national average, that house wouldn’t be of lower quality in the Cornhusker State; it would simply cost less.
Before you decide that any area is a perfect place to retire, you need to look at state taxes. That amount of money you have to fork over in taxes alters how long your savings will last and how comfortably you can live.
Nebraska does have a state income tax. The Cornhusker State uses a bracketed system. It starts at 2.46 percent, and the top rate comes in at 6.84 percent. While many states offer breaks to seniors, such as by completely exempting Social Security from taxation, Nebraska doesn’t. Instead, whether you get any break is based on your income level, just as it is with your federal taxes.
The Cornhusker State also doesn’t exempt pensions, 401(k)s, IRAs, or other sources of retirement income. As a result, many seniors pay more in income taxes in Nebraska than in many other states.
There is also a sales tax in Nebraska. The state rate is 5.5 percent, though cities and municipalities can levy more taxes on top of that amount. For example, Omaha’s total sales tax is 7.0 percent, while Lincoln’s is 7.25 percent.
When it comes to property taxes, low-income seniors do qualify for a bit of a break. Through the Nebraska Homestead Exemption, single retirees who earn no more than $43,200 and couples who make no more than $51,300 get some relief. Precisely how much depends on the exact income level. However, for incomes below $29,401 and $34,501, respectively, the percentage of relief is set at 100 percent.
Part-Time Job Opportunities
Many soon-to-be retirees don’t plan on completely exiting the workforce. Instead, they transition to part-time jobs, giving them an extra source of income and allowing their retirement savings to last longer.
When it comes to part-time job opportunities, Nebraska usually has quite a bit to offer. Even in April 2020, during the early days of the pandemic and a quick spike in job losses, Nebraska’s unemployment rate was just 8.7 percent. That was six percentage points lower than the national average at that time, which was 14.7 percent.
The trend of staying under the national average continued as initial recovery efforts were underway. By October 2020, Nebraska has an unemployment rate of 3.0 percent, just 0.1 percentage point higher than pre-pandemic numbers. The national average wasn’t so lucky. While it declined to 6.9 percent by October 2020, that’s still 2.5 percentage points higher than the average in March 2020.
Since unemployment is low in Nebraska, part-time jobs should be reasonably available. However, the city you choose will impact availability, as well as the kind of position you want to pursue. Additionally, COVID-19 is still a concern today, and the situation remains fluid. As a result, opportunities could become less available at any moment should the pandemic lead to a sudden bad turn.
Best Cities for Retirees in Nebraska
When you want to retire well, the city you decide to call home matters. It impacts your access to critical amenities, including healthcare, entertainment options, and more. Plus, it influences how you live life on a daily basis.
If you’re looking for a bigger city feel, Lincoln might be your perfect retirement city. It’s experienced dramatic growth in recent years, so amenities are plentiful. Plus, entertainment options are expanding, and the nearby colleges keep the vibe youthful. There are also several retirement communities that are incredibly popular with active seniors, which could be a bonus for some soon-to-be retirees.
Papillion could be another great option for retirees. It’s a suburb of Omaha, so you are close to big-city amenities. However, this city has a small-town feel, making it excellent for seniors who want to slow things down and savor retirement. Along with a quaint downtown, you’ll also find golf courses, parks, and more.
La Vista is another Omaha suburb that has a ton to offer. It’s affordable, friendly, and close to big city amenities. Plus, it’s popular with families, which may make it perfect for some retirees who aren’t necessarily looking for a retirement community.
Kearney can also be an exceptional choice. It’s larger than the two Omaha suburbs above, so more amenities are available in-town. However, it’s much smaller than Lincoln, so there’s less hustle-and-bustle and more local charm.
How Much Money You Need to Retire Well in Nebraska
With Nebraska’s lower cost of living, you may not need as much in savings to retire well in the Cornhusker State. While the city you opt to move to will play a role, Nebraska is affordable overall, and that can work in your favor.
Typically, having access to around $58,826 a year in income should allow you to retire well in Nebraska. Addressing your needs shouldn’t be an issue, and you’ll be able to cover quite a few wants as well. That allows you to have a comfortable, enjoyable retirement, ensuring your golden years are some of the best times of your life.
Do you have any other tips that can help someone retire well in Nebraska? Share your thoughts in the comments below.
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