What do you really know about South Dakota? If you’re like the vast majority of Americans, the answer is not much. You might know that Mount Rushmore is in South Dakota. You might know that hundreds of thousands of motorcycle enthusiasts invade the small city of Sturgis to attend the annual Sturgis Motorcycle Rally. You might even know that the capitol is Pierre. But, there is so much more to South Dakota. In fact, South Dakota is actually a pretty nice place to live and an even better place to retire.
About South Dakota
Located in the Great Midwest, South Dakota is bordered to the north by North Dakota and by Nebraska to its south. Also sharing a common border with South Dakota are Minnesota and Iowa to the east and Montana and Wyoming to the west. Rich in natural beauty, South Dakota has wide open spaces as well as some large urban areas.
Low Populations
A large state with a small population, South Dakota ranks 17th in area and 46th in population. With an area of more than 77,000 square miles, the 2010 Census showed a statewide population of only 814,180. Population density per square mile is amongst the lowest in the country.
The largest city in the state, Sioux Falls, has a population around 160,000 and is located in the eastern portion of the state. Citibank, one of the nation’s largest banks has its headquarters in South Dakota. Ellsworth Airforce base is located near Rapid City and South Dakota State University in Brookings is the state’s largest university.
Attractions
There are no professional sports teams in the state. Fishing and hunting occupy the free time of many South Dakotans. Mount Rushmore is one of the major tourist attractions. The western half of the state is predominantly made up of large, rolling hills and great plains. The Black Hills in the southwest part of the state are a low mountain range that is home to Harney Peak, the highest point (7,242 feet) in the country east of the Rocky Mountains.
Weather and Climate
South Dakota experiences very cold winters with lots of snow. From December through February, average daily lows are often at or below freezing. The weather starts to warm up around April when the average temperatures reach in to the high 50s. Summers are very comfortable, almost never getting too hot. A mild summer day with temperatures in the 80 – 85 degree range is normal.
Religious Population
Religiously speaking, Lutherans and Methodists make up the majority of the population that identifies with the Protestant religion. Catholicism is a distant 2nd to the 61% of the population that identify with some form of the Protestant faith.
Now that you know a bit more about the State of South Dakota, you can get an idea of what it would be like to retire in the Mount Rushmore State.
Why Retirees Choose South Dakota
If you are not afraid of a cold harsh winter and want to live a less stressful lifestyle, South Dakota may be just right for you. You’ll have plenty of opportunity to enjoy the great outdoors by participating in biking, hiking , fishing, hunting and other enjoyable outdoor activities.
If you live in or are nearby one of the state’s larger cities, you will be able to enjoy all the amenities offered in most American cities of comparable size. Shopping, restaurants, good hospitals, schools and all of the services you might expect to find are available in cities like Sioux Falls and Rapid City. Smaller cituies like Mitchell, Watertown and Brookings also have plenty to offer their residents.
Tax Advantages
One of the big advantages of living in South Dakota is that there is no state personal or corporate taxes. The state has no inheritance tax and no intangible personal property tax. The favorable tax treatment continues with a well below average sales tax of just 4 percent.
Transportation
There is a good network of highways and roads in South Dakota. You can hop on Interstate 90 and transverse the 380 miles from east to west in less than 6 hours. Interstate 29 runs north to south in the eastern part of the state, serving the higher concentration of population, including the city of Sioux Falls.
In addition to the well planned roadways, freight moves efficiently through the state by rail. There is no train service for passengers. Sioux Falls Regional Airport and Rapid City Regional Airport are the two largest commercial airports in the state and they are served by such national carriers like Delta and Frontier Airlines.
Activities
There are quite a few things to do in South Dakota to occupy your free time. In the eastern region of the state that includes the cities of Sioux Falls, Mitchell, Watertown and Brookings, you can visit the Washington Pavillion of Arts and Sciences or see some wonderful art at the Terry Redlin Art Center.
The central part of the state includes the state capitol of Pierre. You can tour the Capitol building and walk through the tree lined downtown area and browse the small shops or stop at one of the local restaurants for a sandwich. On a cold day, try some warm soup or hot cocoa.
The wide open western part of South Dakota is home to the Black Hills, the Badlands, the Crazy Horse Memorial and the world famous Mount Rushmore. Rapid City is the major metropolitan area in the western part of the state.
Tips and Strategies Before You Retire
Everyone would like to retire and be able to live the rest of their remaining years in comfort or at least at the same standard of living as when they were working. The key to being able to retire like you want to retire is to plan ahead and make sure you build up adequate savings to last you throughout your retirement.
Starting Early
Retirement planning should start early in life. The longer period of time one has before retiring, the better chance one will have to save and accumulate a big nest egg for their retirement years. The power of compound interest works best over long periods of time. Investing 10,000 at age 20 and assuming an average rate of return of 9%, your initial investment will double approximately every 8 years (the rule of 72). If you retire at 60, the $10,000 you invested at age twenty will be worth more than $320,000.
Contribute every year to the maximum amount allowed in any company sponsored 401K plan or other retirement savings plan. If you can not afford to make a full contribution, at least contribute up to any amount that the company provides some type of matching.
Saving is Key
As you get closer to retirement age, it is important to pay closer attention to your assets and potential retirement income. Most people will get Social Security at 65 or so and many may also have a pension to go along with that regular monthly payment. Retirement savings will largely determine how well you will live when you retire.
If you only have Social Security as a source of income and little or no savings to supplement it, you will struggle to pay your bills and probably have to cut back your accustomed lifestyle. If you also have a good pension, life can be much easier. You’ll be able to take a vacation once in a while, go out to dinner on occasion and not worry about spending your last penny.
Those who were able to fund a retirement account will do best. Depending upon how much money you managed to accumulate over the years, you might be able to take a long Caribbean Cruise, travel extensively, help out your children and grandchildren or just sit back and enjoy the piece of mind knowing you are financially secure.
Budget Correctly
Other things to consider as you approach retirement are making provisions for health care. As we age, it is almost inevitable that we will need to see doctors more often, have expensive diagnostic tests and probably have to take a number of prescription drugs. Many will be forced to spend time in a hospital to treat an assortment of maladies. You need to budget for these anticipated expenses.
On the other hand, you will probably not need or want to keep the big house that you used to raise your family. Consider selling your large home and down-sizing to a smaller, more manageable home. You’ll not only pay less for a smaller home, you’ll also save on heating and cooling costs and a small house is easier to clean and maintain.
Calculating/Estimating the Expected Amount of Savings Needed for Retirement
This is not an exact science. Knowing just how much you will need in savings to have the kind of retirement you want, is impossible to know. You can get a good idea of about what you might need by trying to lay out all your anticipated expenses you might incur when you retire.
Include monthly housing costs, health care costs, transportation and everyday living expenses. Budget for additional expenses like travel, entertainment and dining out. Many retirees want to do something to help out their grown children and grand children. You can plan for that as well.
Once you come up with a monthly figure of all your anticipated expenses, you can take a good look at your financial position when you will be retiring. Determine what your regular monthly income will be and also how much of a stash of cash you might have available for your use.
If you have a million dollars in retirement savings, you could probably keep it invested and easily live off interest and dividend payments, never touching the principal amount. It would not be too hard to add about $50,000 per year to your retirement income simply by putting that money to work, very safely, in high interest bearing accounts, buying CDs, treasuries and bonds and investing in some conservative, dividend paying stocks.
Investment and Retirement Calculators
There are a number of online resources that can help you determine how much you might need in retirement savings. Retirement calculators allow you to plug in known figures and dollar amounts and calculate an amount for your retirement savings. Changing the variables, you can see how different scenarios would affect the amount of your retirement savings.
If you don’t want to plan your retirement savings strategy on your own, you can always engage the services of a Certified Financial Planner (CFP) or someone well qualified to help you plan your retirement. Brokerage firms, accounting firms and banks are a few places you might look to find a good retirement planner.
Retirement Planners in South Dakota
There is help for those wishing to retire in South Dakota. Most of the financial planners are concentrated in Sioux City and several other of the larger cities in South Dakota. Following is a short list of some of the very good and well respected retirement planners in South Dakota.
The following firms have all received the Better Business Bureau’s highest rating of A+. They all provide financial planning services including investments, tax planning and other services that are specific to those nearing retirement.
Cornerstone Financial Solutions
224 N. Phillips Avenue # 102, Sioux Falls, SD
Phone: 605-357-8553
McGreevy & Associates
3500 S. Kiwanis Avenue # 101, Sioux Falls, South Dakota
605-332-4111
Retirement Resources Group LLC
1405 S. Dundeee Drive, Sioux Falls, South Dakota
605-271-3742
Most Popular (Best) Places to Retire in South Dakota
A 2006 survey by Money Magazine of the Best Places to Retire in America chose Rapid City and Sioux Falls as two of the best places in South Dakota. The criteria included such things as the quality of life, green spaces, cost of living, taxes, healthcare, recreational opportunities, dining options and cultural activities.
Rapid City has a local sales tax of 6% which includes some local fees and surcharges above and beyond the state’s 4% base sales tax rate. Median home prices were $137,600. There are 5 movie theaters within 15 miles of the city center and 218 restaurants. A total of 10 public golf courses are within 30 miles of tthe city limits. Eight hospitals serve the community.
Sioux Falls has a local sales tax rate of 5.92% which is below the national average. Median home prices were calculated at $139,700. There are 6 movie theaters within 15 miles of the city center and at last count, 443 restaurants. Golfers can take advantage of the many excellent courses in the area. Within 30 miles of Sioux Falls, there are 23 public golf courses. The Sioux Falls community is served by 14 area hospitals.
Reasons to Retire in South Dakota
A recent MoneyRates.com survey concluded that South Dakota was the 3rd Best State for Retirement, surpassed only by Hawaii and New Hampshire. An array of criteria was incorporated in to the final rankings and South Dakota scored well, particularly as a safe and affordable place to live. At the risk of repeating previously mentioned information, here are some good reasons to retire in South Dakota.
Affordability – With no state taxes and no estate taxes, South Dakota has an advantage over most other states. The sales tax ranges from 4 -6% depending upon the particular municipality. Retirees, many of whom must live on a limited fixed income, will appreciate the reasonable tax policies of the state. Median home prices are also very affordable and other basic living costs are in line with the majority of states in the country.
Retail Services – The larger cities including Rapid City and Sioux Falls provide plenty of places to dine and shop. There are all the national chains as well as many smaller, individual shops and boutiques. Restaurants range fro fast food to fine dining.
Health Services – The large cities are well served by a number of very good hospitals. Smaller cities may have clinics and if need be, patients can be transferred to hospitals in the larger cities. There are plenty of doctors and other health professionals available to meet the needs of the residents of South dakota
Outdoors – The Falls in Sioux Falls are something to behold as is the natural beauty just about everywhere you look in the entire state. Unspoiled green spaces dominate the state and there is ample opportunity to hunt, fish or participate in various outdoor activities.
Lifestyle - The pace of life is relaxed. People are friendly. The crime rate is relatively low. For a nice, quiet way of life, South Dakota is hard to beat.