Tenth in land area among the fifty states, Oregon is located in the Pacific Northwest between Washington and California on the coast of the Pacific Ocean. With recent growth as people have migrated to Oregon from other states, the population is approaching the four million mark and ranks the state 28th by population. People from other states choose Oregon as a retirement destination because of the natural beauty, the vast expanses of open space, and the favorable climate that is free from most natural disasters. For those who already live in Oregon, a move from a large metropolitan area to a quieter and less expensive town located in the central region is common at the outset of the retirement years. Growth in the less populated areas has given rise to excellent restaurants and attractions and some of the best healthcare in the country. A young population openly welcomes retirees to all communities because of the enjoyment the older generation brings as they get involved. Oregon offers many retirement locations with affordable costs for those who plan to enjoy a moderate retirement lifestyle for many years to come.
Strategies and Tips for Saving
Smaller communities are less expensive places to live so the savings goals may be reached earlier and allow for greater flexibility in the early retirement years. City life demands higher taxes and utility costs as well as a consistent cost of transportation that will subside when a small town would allow errands to be completed by walking. Quieter lifestyles free up time that can be used to develop hobby interests, entertain friends and family, and travel to places never seen. Most people in Oregon will be well-versed with regard to savings and investments, but these factors must be included in the retirement plan:
Trusted Financial Advisor
One of the most important professional associations is a financial advisor with your best interest at heart. Finding such a professional is best achieved through a referral from someone who is currently saving for their own retirement. A qualified professional will speak openly of the options available to people at various stages of life and provide choices that fit each individual’s long term savings goals. If personal concerns and questions are not addressed, find another advisor. Direct management of the portfolio must include shifting the accounts to more stable instruments as retirement arrives.
All Monetary Income
During the working years, income sources are limited to salary and benefits. Home equity will be a long term source if the home is sold at retirement, but all income sources will shift upon the completion of the working years. Anticipated Social Security checks, pension payments, and the proceeds from investments and savings will provide the monthly income necessary for retirement living. Inheritance income can be included in the retirement plan, but usually the recipient simply includes that lump sum in the savings and investments that will grow until retirement begins.
Budget for Retirement Living
When the retiree relocates, travels consistently, and adopts multiple hobbies, the expenses will shift from major categories that included rent, food, and transportation to a large sum of discretionary funds that may become difficult to control and track. Care must be taken to allow for all retiree interests without loss of awareness of the shift in expenses. The retirement budget must be detailed enough to reveal the true level of monthly income required. Housing will change based on the health of the individual and must be noted for each spouse.
Avoid Money Scams
With each new scam there is a certain amount of fear that moves through the elderly community. When trusted advisors are willing to provide information to the retiree, mistakes are avoided and precious savings is safe from thieves. Determine from the outset to speak to both the financial professional and one trusted relative prior to making any financial decision. Avoid any high pressure advance by a stranger promising the world if you will just send them money or bank account information.
Calculating Expected Savings Needed
Most financial advisors will use one of the many retirement calculators to obtain a ballpark savings goal that is achievable during the working years and adjustable over time. Without asking for any personal information, the calculator will require your current age and income, and the projected monthly income at retirement, as well as the projected return on investment percentage.
Considerations
Aggregate savings amounts and goals can be projected by these calculators, but there are some limitations within the most basic calculator. Life events will require some major adjustments to the savings activities and documentation must reflect what decisions were made. One of the most glaring deficiencies is that no one can predict annual changes in Social security benefit checks. Another deficiency is the inability to input changing ROI percentages as the market ebbs and flows. Growth of the existing investments must be accurately anticipated to avoid surprises in the later working years. All retirement plans must include separate life expectancy calculations for each spouse. The death of one spouse will change the entire picture and must be though out prior to retirement. All housing options should be documented to avoid shortage of funds in the event of a long term nursing home stay. The cost of utilities, transportation, and food will change over time and must be written into the plan to avoid shortages. Retirement calculators omit devaluation of the dollar as a factor in the projections.
Using a Retirement Worksheet
Trying to stick to a retirement plan through decades of working life can be impossible when major events cause decreases in income. Retirement plan changes must be anticipated and documented to include fluctuations without being cumbersome and discouraging. A detailed retirement worksheet is an excellent tool for tracking the plan over time. Details that reflect current facts and future dreams can be refined as life happens. A separate worksheet for each spouse should be maintained so that details can be tracked and both sets of needs are included in the plan. A joint plan makes the inaccurate assumption that both people will live the same length of time with identical needs. One section in each plan should include information concerning life after the loss of the spouse. Life events that affect one person like health changes or job losses can be documented in the one plan while the other plan is executed as written. Whenever the plan is reviewed, retain a copy of the previous version and make changes.
Cost of Living Index (COLI)
The COLI is a standard index that provides a standard calculation for anticipating the cost of a lifestyle in a different location. Learn to calculate the difference in cost between the location during working years and the retirement location. Use more than one factor in calculating the cost of retirement in a more expensive and less expensive place for a more inclusive picture. If a location is chosen prior to gaining popularity, the COLI can be used to determine the increasing cost of living in the selected location as the working years pass.
Why People Retire in Oregon
Oregon is ranked tenth in size among the fifty United States. With three distinct climate zones, people from everywhere can find an acceptable location conducive to comfortable retirement living. West of the Cascade Mountain Range, the major cities are nestled between the mountains and the Pacific Ocean. Some of the most temperate weather in the nation is found in this region where practically any plant will grow. For the mountain lovers, the Cascades run the full length of Oregon and contain such famous mountains as Mount Hood and the Three Sisters as well as Crater Lake. The eastern size of the state is a high plateau peppered with standing peaks that stand as sentries over the landscape. Oregon has beautiful weather most of the year with four distinct seasons and moderate rainfall totals. For retirees, there are some specific reasons to move to this beautiful state, including:
Home – Many of the people who choose to retire in the midsection of the state come from the cities. After years of fast-paced city life, many Oregon natives dream of living in a small town away from the bustle of urban living. Even though certain areas are favored as retirement meccas, the average age in most cities remains in the thirties and most communities are considered family friendly.
Climate – Four distinct seasons with an expected 10-15 inches of rain each year is a magnet for people from very rainy and very arid climes in other states. Moderate temperature swings and low risk of natural disasters are among the many reasons people will move to Oregon for retirement.
Tourism – Many years have been invested in developing and publicizing the natural beauty of Oregon. The result has been a well-developed tourism industry that has given rise to excellent restaurants and recreational venues in the center of Oregon.
Healthcare – Central Oregon has a disproportionate number of specialists and highly rated physicians in a network of four hospitals that serve the entire area. Cardiac patients are cared for in a separate wing in one hospital in Bend, Oregon. This network supports the smaller hospitals in more rural communities when specialists are required to provide healthcare in more remote locations.
Surprising Cost of Living – Oregon ranks #38 as a relatively expensive place to live in comparison to the other fifty states. The average COLI for the nation is 100, and Oregon has a COLI score of 111.49.
Housing – The most expensive category for living in Oregon is housing which comes in well above the national average with a score of 133.16.
Household Goods and Services – 105.26 score is closer to the national average and is best explained by the ease of access to foreign goods and supplies from California.
Transportation – Another expensive category for life in Oregon is transportation with an higher than average COLI score of 109.49.
Affordable Taxes
The state of Oregon does not assess a state income tax. Counties and cities are allowed to assess and collect sales tax as needed.
Each gallon of gasoline is assessed 25 cents.
Every gallon of diesel fuel carries a 24.3 cent per gallon tax.
Oregon assesses income taxes from 5.0% to 11% based on the annual income reported on the federal return. The highest tax bracket begins at $125,000.
In Oregon the median income is approximately $51,000 and each family will carry a tax burden of about $1700 for state and local taxes.
Property Taxes – Homeowners are not granted a homestead exemption in Oregon. Counties set the tax rates within their jurisdictions and any time a special consideration is given the county official determines its application. Some homeowners over the age of 62 are allowed to delay payment of property taxes based on income criteria under the Senior Citizen Property Tax Deferral Program. The taxes are payable upon the senior’s death, the sale of the property, or a change of permanent residence. Any change of property ownership will cause the unpaid taxes to be due.
Inheritance tax is assessed by the state of Oregon when the federal Form 706 is filed by the estate of the decedent. Real property and tangible personal property of an Oregon decedent that is located within the state of Oregon is taxed along with intangible property regardless of location. Nonresident decedent estates will pay taxes on property of any type that is located within the state of Oregon.
Most Popular Oregon Retirement Locations
Bend – Nestled between forested highlands and high desert plateaus, Bend has grown to be a city of more than 80,000 residents nearly doubling since the 2000 Census was completed. As the largest community in central Oregon, every amenity has been included in this city for those who love the outdoor life and still want the cultural aspects of city living.
Portland – Known as the “City of Roses,” Portland is a beautiful city with 37,000 acres of parkland that is beautifully manicured for the citizens to enjoy. Located west of the Cascade Mountains the climate is moderate all year, and retirees can enjoy every facet of city life.
Eugene – Home of the University of Oregon, Eugene continually tops the list of most livable cities in the U.S. Located midway between the north and south borders of the state directly south of Portland, Eugene offers easy access to some of the most famous attractions in Oregon. Transportation options in Eugene include a state of the art airport, Amtrak station, and all the major bus lines.
Ashland – Located just north of the California/Oregon border, Ashland is a tiny community that offers unlimited outdoor activities including hiking and skiing. For the Shakespeare scholar, the Oregon Shakespeare Festival is held here.
Corvallis – Another wonderful college town that is more centrally located in the scenic Willamette Valley between the Cascade and Coastal mountain ranges. Just one hour away is the Oregon coast.
Beaverton – For the active retiree, Beaverton boasts a park within one-half mile of every home, thirty miles of walking trails, and a network for bicycles that spans 25 miles. The neighborhoods in this suburb of Portland are geared for family life.
Oregon Retirement Planners
Financial planners specializing in retirement are available in each major region of Oregon. When selecting a financial advisor, expect this person to listen to your questions and offer choices that will aid in reaching your goals. Whether you live in the large cities on the west side of the Cascade Mountains or in another region, there is an experienced and reputable advisor to help you plan for a comfortable retirement.
Portland Financial Advisors, Inc. — Portland, Oregon
12655 SW Center Street, Suite 520 • Beaverton, OR 97005
Phone (503) 684-6116
E-mail: info@pdxadvisors.com
Website: www.pdxadvisors.com
Griffin Financial Planning, Inc. — Ashland, Oregon
35 N. 3rd Street
PO Box 3112
Ashland, OR 97520
Phone: (541)488.3800
Website: www.griffonfinancial.com
Bonebreak Financial Planning & Investments — Eugene, Oregon
00 W 13th Ave Ste 200
Eugene, OR 97401
Phone: Eugene: 541-868-3800
Roseburg: 541-673-0251
Email: david@bonebrakefinancial.com
Website: www.bonebrakefinancial.com
Conclusion
Anyone wishing to retire in Oregon will find that the only thing more acceptable than the climate is the people. Travel the state during the working years to choose a favorite area where the retirement lifestyle can be lived in comfort. Invest in new hobbies and travel so the learning will never end. Invite friends and family to come and visit after the final location is selected. Great weather will allow for all the outdoor activities imaginable with easy access to anything else that is needed including world class health care. Make a great plan and then execute the plan to ensure a long and happy retirement.