New Hampshire Retirement Planning

While many of the discussions surrounding the best places for retirement focus on areas with warm temperatures, the State of New Hampshire has been quietly adding a large number of retirees to its population for many years. Even with a colder New England climate, people looking for a place to retire have chosen New Hampshire due to the savings it offers in taxes, the small town feel to its towns and villages and the friendliness of its people. The state is well-known for its distinct of change of seasons that are highlighted by the exploding colors of fall across its mountainous landscape. For many people, the quaint small towns throughout New Hampshire offer a welcoming change from states with a more urban, faced-paced lifestyle. Overall, there are many good reasons for choosing New Hampshire as a place to retire.

Creating a comfortable retirement in New Hampshire requires the same planning that should be included in any good retirement program. While the cost-of-living there is lower than many other states, having a retirement plan that is as solid and prosperous as possible can make retiring in New Hampshire even more enjoyable. Through understanding the basic steps required in building a solid retirement plan, anyone can be assured of a quality life in the golden years. All it takes is a little homework, building a savings program dedicated to only retirement and calculating what income will be needed for meeting the expenses of a desired lifestyle.

Retirement Plan Basics

On both personal and financial levels, retirement is one of the biggest transitions people will face in life. Being able to live life to the fullest even after leaving work behind requires long-term planning to assure an adequate income during the retirement years. While it is best to establish a retirement plan as early as possible, the important point is that everyone should be working on building a plan no matter how close they are to retirement. All good retirement plans should include not only looking at ways to reduce expenses, but also include implementing the following components.

Savings

Building a savings nest egg can assure a comfortable retirement in New Hampshire. The only way to create long-term wealth is through a disciplined savings regime. This is especially true for assuring adequate income once someone has left the world of a daily job. The last thing anyone needs during the latter years of life is the inability to meet unexpected expenses. While there are many types of savings plans, there are many ways to save for retirement that offer tax savings and other benefits. The following retirement savings options can provide a greater return on investment when compared to standard savings accounts.

One of the most popular retirement savings options is creating a 401(k) plan. These plans, which are offered by companies to their employees, provide a way to save for retirement while saving on immediate tax liabilities. A 401(k) plan allows for individuals to voluntarily contribute up to certain percentage of their pre-tax employment incomes to the account each year. Whatever amount is contributed to the account does not have to be declared as income on tax returns for the year the wages are earned. In addition, all investment gains earned on a 401(k) plan are not taxable until they are withdrawn from the account. The overall tax-deferment benefits realized by a 401(k) plan can go a long way in building a solid retirement nest egg.

Another savings option to build funds for retiring in New Hampshire is an Individual Retirement Account (IRA). An IRA is a private account that allows individuals to make annual contributions from their employment incomes. The amount that can be contributed each year is determined by income levels. Like a 401(k) plan, the amount contributed is not taxable for the year of contribution and all gains realized on the account are not taxed until funds are withdrawn. There are many types of IRA accounts available and they all provide tremendous savings in the long-run.

Other Savings Options

Company Pension Plans: Many companies offer retirement pension plans as part of their employment package. These are normally either money-purchase plans or profit-sharing plans. Based upon an employees level of contribution into a pension fund, a formula will be used to determine how much a person will receive per month in retirement. The advantage of a pension plan is that knowing exactly how much someone will be receive each month makes it much easier to develop a livable budget for the retirement years.

Annuities: An options many people pursue for retirement income are annuities, which can be purchased through insurance companies. Based upon the type of annuity, a person will receive a defined payment each month either for a lifetime or for a fixed period of time. Payments are based on the amount contributed to the annuity, the type of annuity, and the age at which someone wishes to begin receiving payments.

Regardless of how retirement savings accounts are built, the key to long-term success is fiscal discipline. The only way to guarantee a comfortable life after the working years is to make regular contributions to savings accounts and use the accounts for no other purpose than meeting retirement expenses.

Estimating Retirement Needs

Another important component in designing a solid retirement financial plan is estimating future incomes and expenses. Through completing some basic calculations, anyone can easily determine what will be needed for a comfortable retirement in New Hampshire. The important thing is to create a clear understanding of what will be needed to meet expenses. While some expenses may go down in retirement, other expenses like health care may go up. Part of a good plan is also determining what immediate expenses can be eliminated for providing a secure future.

Unfortunately, there is no one simple formula for determining exactly the retirement needs for every single person. What income will be needed and what expenses will be incurred vary widely depending upon a person’s desired standard of living, their retirement age and overall expenses. However, there are some basic key decisions and calculations that everyone can make for determining what will be needed for retiring in New Hampshire. These include:

• Determining the age at which one wishes to retire.
• Deciding the income needed to maintain a desired standard of living. This area can be calculated by researching the overall cost-of-living, land and home prices, taxes and other financial factors in New Hampshire. It is usually best to estimate on the high end for these figures.
• Add up the current value of all savings, assets and investments.
• Determine a realistic rate of return on all savings and investments. To be on the safe side, it is best to estimate on the low end for these figures. After adjusting for inflation, a realistic rate of return is usually between 6 to 10 percent. Determine if the rate of return on current savings and investments will provide the income needed by a desired retirement age.
• Add up all expected income in retirement like social security, pension plans, savings, annuities and other sources.

The above figures will provide a realistic picture as to what will be needed in the retirement years and how much will someone will need to invest to meet their expected obligations by a desired retirement age. The are numerous, free retirement calculators available on the internet that can make these calculations much easier.

Why Retire in New Hampshire

Low Taxes

One of the good aspects for retirees is that New Hampshire is a relatively tax free state. There are no income or sales taxes. The only exception is that interest and dividends are taxed at 5%. However, a $1,200 exemption from this tax may apply for residents who are 65 years of age or older. In addition, the state offers tax breaks for people receiving military retirement benefits and for relieve with property taxes for senior citizens.

Low Crime Rate

In 2009, New Hampshire received the lowest crime ranking of any state in the country. This is not surprising as the state has consistently been ranked as one of the safest in the nation for many consecutive years. With a population of only 1.3 million people, many people have chosen New Hampshire for retirement based upon fact that “neighbors look after one another”.

Health Care

The health care system both within New Hampshire and in its immediate neighboring states provide some of the finest health care facilities in the world. These facilities not only include leading hospitals associated with the state’s universities, but also the top-notch institutions located within a one day’s drive to Boston, MA. The state also provides senior citizens support through a sponsored drug program.

Geography

For many retirees, the landscape throughout New Hampshire was one of their deciding factors in retiring there. With it’s gently rolling mountains, clear running streams, quaint small towns and clean air the state offers something for everyone in all seasons. It is common to read articles from retirees in the state that include the words “beautiful”, “inspiring”, tranquil” and “laid-back” in describing how it feels to live there. The other aspect that people enjoy is the relatively close proximity from anywhere in the state to the larger metropolitan areas of Boston, MA and Portland, OR.

Friendly People

One of the biggest draws to retiring in New Hampshire is its people. For many, they chose to live there because they were welcomed openly by friendly locals who immediately made them part of the community. With most of the state being rural, many communities still retain a small town atmosphere and cordiality.

Most Popular Retirement Locations in New Hampshire

Concord

Located along the Merrimack River with a population of less than 45,000, the City of Concord provides retirees with a rich cultural life in an historical setting. It provides one of the highest concentrations of health care facilities in the state as well as diverse shopping and dining opportunities. It is also popular for active retirees due to its abundance of parks and outdoor activities.

Peterborough

Located in the south-central portion of the state, the town of Peterborough offers retirees a small town setting with a diverse artistic population. It was used as the setting for the play “Our Town” by Thornton Wilder and still retains its pastoral atmosphere. The town offers a public library and numerous outdoor activities in the surrounding areas.

Nashua

Located close to the border of Massachusetts, the City of Nashua has been ranked as one of the best places to retire by U.S. News & World Report. It is best known for its historical culture, access to health care and ample outdoor activities. There are over 49 ski trails and over 80 golf courses within an hour of the city.

Hanover

Located on the western side of New Hampshire in the scenic Upper Connecticut River valley, the Hanover area offers retirees a rich intellectual life in a small village setting. It is home to Dartmouth College as well as a renowned senior education program. Adding to its benefits is the superb health care offered at the Dartmouth-Hitchcock medical center.

Retirement Planners in New Hampshire

Achieving sound retirement goals often requires the assistance of a qualified retirement financial planner. For additional information on retirement in New Hampshire, the following planner can be of assistance.

Dan P. Hagler, Chief Executive Officer
Granite State Retirement Planning, Inc.
360 Route 101, Suite 1301
Bedford, NH 03110
www.granitestateretirement.com

James E. Knee, Chief Executive Officer
Sterling Financial Services, LLC
6 Loudon Road, Suite 505
Concord, NH 03301
www.sterlingfinancialservices.net

Harvey M. J. Ames, President
Ames Planning Associates, Inc.
45 Main Street, Suite 103
Peterborough, NH 03458
www.amesplanning.com

Glenn M. Lepene
GML Financial Advisory Services, LLC
59 South Main Street
Rochester, NH 03866
www.gmlfinancial.com