Are You Moving in Retirement to Cut Tax Costs? Consider These 4 Factors First.

When an affluent suburban Chicago couple came to John Campbell, senior wealth strategist at U.S. Bank Private Wealth Management, planning to retire in New Mexico because of its weather and lower income and property tax rates, Campbell started digging into the tax-burden differences between the two states.

He found Illinois would be cheaper for this particular couple. That is because Illinois doesn’t tax Social Security or distributions from retirement assets, while New Mexico taxes them both. The couple decided to live part-time in New Mexico, while maintaining Illinois residency for tax purposes.