Benefits of Retiring In New Jersey (Pros & Cons)
January 13, 2022General Retirement
When retirement comes close, you have to consider the right place to go through the process. What are the benefits of retiring in New Jersey?
New Jersey is a great place for families, with good weather, recreation facilities and even some tax-friendly policies for retirees who have been low-income workers. However, the overall cost of living and the tax burden can make New Jersey a difficult place for you to live after retirement.
After all those years of working hard and saving up for a comfortable life after retirement, you want to make sure the state you retire in is one where you can actually live out that comfort. If your savings are being eaten by high living costs, or by insurance and taxes, your post-retirement life may not be as relaxing as you’d wished for.
We’ve carried out a lot of in-depth research to see the pros and cons of retiring in New Jersey, and have put them all together in this article.
Table of contents
Retiring in New Jersey
New Jersey is one of the top twenty states to retire in, known for the beautiful scenery, the recreational facilities, and great food. Though New Jersey is one of the smallest states in the US, it has excellent economic health, and is a great choice as a retirement location.
That said, while the quality of life in New Jersey is great, it may not be as easy for some to achieve as others.
Let’s look at some of the pros and cons of being a retiree in New Jersey, as compared to other states.
Benefits of Retiring in New Jersey
One of the major upsides to retiring in New Jersey is the weather. The state experiences four distinct seasons throughout the year which can be great for experiencing different kinds of activities. Each season brings with it its own variety of fun events that can make your retired life enjoyable. There are seacoasts to pine barrens and the state has a subtropical climate that has high humidity. Winters are cold, while summers are hot.
There is also a moderate spring season that lasts about two months during the first half of the year, which is the perfect time for all the fun spring events – from street festivals to botanical gardens. New Jersey has the beautiful Deep Cut Gardens with its beautiful rose bushes.
New Jersey is the best state to experience the spring season in, but summer doesn’t fall short either. The summer season brings with it high but comfortable temperatures, making the weather pleasant, and boosting tourism. From fishing to talking walks along the boardwalks, summer in New Jersey is just as perfect as its spring season.
Fall brings with it clear orange colors, with the trees in the area shedding their leaves, while the December to February months are exactly what you’d want a winter season to be like.
New Jersey is the right place for you if you like the experience of different seasons all year round.
New Jersey happens to be one the best states for public safety. With its low crime rates, it is one of the safest places for retirees despite sharing borders with states with higher crime rates. Retiring in New Jersey would mean having fewer concerns about your wellbeing with respect to crime. In fact, the violent crime rates have been dropping as the years go by, so much so that it is even less than the national average.
New Jersey has a number of small and middle-sized towns, with the higher crime areas having rates around 1.3% while the lower crime rates go as far down as 0.01%! Some towns also have community programs that help reduce the instance of crime, as well as anti-crime units to respond to any such instances faster.
For retirees, who already have so much at stake by virtue of not having a steady source of income, living in areas where crime is common can be very stressful. Being so secure, New Jersey becomes a great place for retirement.
Access to Recreational Facilities
New Jersey has a variety of museums with visitors from all over the world. From the Morris and Newark Museums to Rutgers or Princeton, there is artwork like oils, photography and sculptures from a wide number of nationalities.
Another major consideration for retirees to live in New Jersey is the tax policies. Most retirement funds are tax deferred, and you don’t want to live in a state where you’d end up paying more in taxes than you would have otherwise.
High tax rates can make a significant dent in your savings, which can affect your standard of life. New Jersey does have high property taxes, but it does not tax social security, and income taxes are also low for pensions, as well as for some retirement accounts.
This is why moving to New Jersey for retirement can result in fewer taxes being paid on your retirement benefits. Though it is true that New Jersey is expensive – which we will talk about later – new tax laws are making it a lot easier for those with relatively lower income and reducing the tax burden.
Access to Social Activities
New Jersey also has a lot of the hustle and bustle of New York City or Philadelphia, balancing it out with the residential life. With Manhattan being close by, you can have easy access to the gorgeous skyline views, and spend a night on Broadway, followed by a nice coffee from your local family-owned shop the next day. Retirees in New Jersey can alternate between social life, while still having the calm and quiet you want in retirement.
Access to Healthcare
New Jersey also ranks as one of the top ten states in the US that provides the best healthcare. By retiring in New Jersey, you can have the advantage of excellent healthcare, with top hospitals like Morristown Medical Center or Hackensack University Medical Center being present here.
Being retired means having a lot of time on your hands, and some retirees may choose to use this time by going back to studying. While taking up online courses is also an option, going back to school can keep you healthy and socially connected. Gaining new knowledge and re-entering that studying environment can spark interest in a variety of things and bring more meaning to your life.
On top of that, going back to school in person can also help with improving your life by establishing a routine and helping you meet new people. While the cost of education in the US is generally very high, New Jersey has a friendlier cost for retirees. You can even study at some universities with free tuition as a New Jersey retiree beyond a certain age.
Farmers’ Markets and Healthier Lifestyle
Known as the Garden Estate for a good reason, New Jersey also has some of the best farms and wetlands in the region. There are a variety of biking trails that promote a healthy lifestyle, and a large amount of land at the riverfront. New Jersey also has a large number of farmer’s markets, with healthy, fresh produce.
As a retiree, maintaining a healthy lifestyle is also of utmost importance, especially if you want to reduce the number of healthcare bills you have to pay, and New Jersey pushes you to do just that. With more than a hundred farmers’ markets selling produce like peaches, bell peppers and cucumbers among others, retirees in the state can maintain a healthy lifestyle.
In fact, New Jersey is also one of the top ten healthy states in the US, with a very low 26.9% of the adult population struggling with obesity.
Drawbacks of Retiring in New Jersey
Even the people who love New Jersey will often complain about the high tax levels. While there are some tax friendly policies for retirees, the overall tax burden compared to other states is pretty high. In fact, sales tax is close to 6.6% which is not low at all.
As such, New Jersey does consistently lose a large proportion of its income as residents move to other states to get rid of some of the tax burden. Therefore, New Jersey ends up losing more wealth than it gains, and this affects the revenues.
In fact, the tax policy in New Jersey can get so overwhelming that it doesn’t just lose its wealth going out to other states, it also receives a smaller amount from the residents coming in. It may also end up taxing wealthy retiring residents heavily to make up for this, though it is lenient on retirees who have low incomes.
New Jersey also does not tax residents for Social Security income.
A major concern for retirees in New Jersey is property taxes. They can go as high as $8,000 for one household. In comparison to some other states like Alabama where the median property tax is about $500, this is a very large amount.
Because of the high property taxes, real estate is also an extremely expensive market.
If you’re aiming to buy your own house for retirement, you may have trouble doing so in New Jersey.
Income & Inheritance Taxes
On top of having high property taxes, retirees in the Garden Estate also have to pay a fair share of income tax on the first $15,000. Though this figure is lower than that in states like New York, it is still higher than others like Texas or Florida, where there may even be no income taxes on earnings in retirement.
In fact, on top of high income taxes, New Jersey is also one of the few states with an estate tax policy. Estate taxes are those that are paid on a dead person’s estate, whereas the beneficiary is to pay inheritance tax. In New Jersey, both of these taxes are paid, making it one of only two states in the country where both these taxes are enforced.
Cost of Living
New Jersey doesn’t just come with extremely high taxation – a problem that drives even non-retirees out of the state – it also comes with a high standard of living. In fact, New Jersey is so expensive to live in that it has the third highest cost of living in the entire country. You may be paying up to 14% more on just the basics, if you choose New Jersey as your retirement location instead of others.
Until a few years ago, New Jersey had lower fuel prices but since the new tax raise for the purpose of infrastructural development, residents have to pay up to 50% more for their fuel than before.
It doesn’t stop at just fuel either. If retiring in New Jersey is on your retirement checklist, be prepared to pay more for goods and services across all categories.
With the cost of living being so high, the overall standard of living falls. There are high rates of unemployment, and credit ratings are low.
Not The Best Place for Grandkids
New Jersey has a great urban area with a number of recreational facilities, beaches, lovely weather, and is close enough to New York for you to head out on a day trip, so you’d expect to have a good time with your grandkids when they come visit, right?
Unfortunately, because of the high cost of living, these visits are next to impossible. In fact, raising children in New Jersey can be extremely expensive, just as it is to own property. That’s why children raised in New Jersey will often move to other states where they can get better job opportunities and have lower mandated expenses.
While retirees can stay behind in the state, it is natural that most would want to visit their grandkids and spend time with them, and at the end of the day, this may result in them moving out of the state to live closer to the rest of their families where they will be able to spend more time with them.
While New Jersey is not the most affordable state to live in, with a much higher cost of living than others, it does come with safety, tax-friendly policies for lower-income retirees, and good healthcare.
Depending on your priorities in retirement, New Jersey may be a good place for you to retire, while for others it may be lower down on the list. If your retirement is around the corner, you’d want to measure these factors against each other to make your decision on whether or not retiring in New Jersey works for you.
About THE AUTHOR
With multiple family members currently in senior living facilities, David is in the trenches every week, learning the ins and outs of nursing homes, assisted living, memory care, and general senior living.Read more about David Bolton
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We love planning for retirement. It's somewhat of a hobby, and we want to share what we've learned with you. Over the years we've found the best ways to live, how to travel, take on new hobbies and give back. Happiness in retirement is the main goal, and having the right information allows us (and you) to achieve that.