I had a little fun recently and decided to turn it into one of my regular passive income metrics. During the month of September the Census Bureau published their latest household income metrics and I decided to take a look and see how my current passive income measures up.
The data set I chose was to use the average household median income by state. In my opinion, since I will be retiring with my wife, I thought the this data best represented typical income in each state and was a better measure than using average income which can be skewed from higher income earners.
The data unfortunately is only representative thru 2018. To adjust for something a little closer to today’s dollars I inflated the incomes using 2019’s average inflation rate of 1.8%.
The results came in the currently I have enough passive income to retire in only 2 states (Mississippi and New Mexico). Mississippi I just squeaked into the 90th percentile by just 0.8%. New Mexico I just squeaked into the 80% range by 0.6%.
My choices are pretty slim right now but as my passive income grows it will be fun to color off the states as my income grows.
If this is something you would like to do here are the data links to get you there:
1. Census Bureau Spreadsheet can be downloaded from this link https://www2.census.gov/programs-surveys/cps/tables/time-series/historical-income-households/h08.xlshttps://www2.census.gov/programs-surveys/cps/tables/time-series/historical-income-households/h08.xls
2. You can create your own map here https://mapchart.net/usa.html
I’m toying around with including the entire world map to see which countries I can retire to but for now I am good with just the U.S.A. states.
Simple Dividend Growth 
Not to throw a monkey wrench into the mix, what about state income taxes and if there’s an exclusion for Social Security income (assuming that’s part of your retirement cash flow)? (MS excludes, NM doesn’t and TX is one state with no state income tax).
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Thanks for the post SR,
Very true taxes can play a factor as well as the types of retirement accounts such as a ROTH versus traditional IRA versus pension and so on, Your personal expenses would also play a factor if you spend below the norm or above (especially if you have health issues). The census data is based on median household gross income so tax is already a factor to some extent but this is nothing more than another measuring stick to have some fun with my metrics.
Personally I have already targeted a state I have strongly considered relocating to if the opportunity presents itself and that would be Tennessee. Only tax downside there is the high sales tax but no income tax and low property taxes is pretty nice. We could easily do an entire series of posts on what to consider when relocating for retirement and maybe include some factors never considered. For example how well funded is a state’s pension obligation? If it’s underfunded then that may lead to future tax increases to cover the shortfall and before you know it you could be living in a high tax state all over again.
You question opens up the door to questions I am sure many retirees or near retirees have wondered and it was great to hear from you on the topic.
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