Iowa retirement planning

Retiring in Iowa? Read This First!

People approaching retirement look at five different components when scouting for locations: proximity to family and friends, affordability, health-care accessibility, weather, and crime. While sunny Florida might come first to mind as a retirement spot that meets those criteria, Iowa is becoming an increasingly popular place for retirees. 

America’s Heartland has not been getting enough love lately. Most report leaving the area due to a job change, but many credit retirement for their relocation, too. In fact, only 2% of pre-retirees plan on moving to the Midwest, according to a survey by Merrill Lynch and Age Wave, a research firm focused on the aging population. But as of late, things are slowly looking up.

In 2021, nearly half (47%) of Americans who moved after retiring this year went to a different state. Retirees are looking outside of their locales for a place to settle down, and reports show that Iowa is becoming more attractive to those who are searching for a place to relax in their golden years.

Are you curious about Iowa retirement? There’s no getting around it, retirement is a big part of your life and there are many important decisions that need to be made. Iowa is known to be the Hawkeye State. It’s an agricultural center, home of the Iowa Play Festival, the Annual Butter Cow sculpture, and more. It’s one of the bright spots for retirement in America because it’s affordable (in comparison to other states). 

Iowa has a number of advantages when it comes to retirement. Luckily, Johnson Wealth and Income Management can help with your lifestyle management and financial planning in our great state. 

The Benefits of Retiring in Iowa

There are many reasons why seniors are choosing to make Iowa their home in retirement. Whether it’s the low cost of living, or the small town with a big city feel, Iowa has a lot to offer its retirees. Here’s a look at what makes Iowa desirable for retirement:

  • Surround Yourself with Nature

Iowa is known for having a four season climate. The average temperature in the spring and summer times is in the 70’s and in the winter, a brisk 14 degrees. This is a great state for anyone who enjoys having four seasons and most importantly having a cold winter. Iowa has many parks and lakes which are perfect for someone who enjoys being one with nature. People can access parks and lakes in the state to spend their retirement day at.

  • Wide Variety of Activities

RAGBRAI is perhaps the state’s biggest adventure. If you have not made your way to at least a day of RAGBRAI before retirement, the time to check it out is now. This cycling event takes place every July, stopping in several parts of the state to continue on their cycling journey. Whether you hop on RAGBRAI for just a handful of miles, maybe only an evening of entertainment or the entire ride, this is one activity everyone from Iowa needs to experience once in their life, retired or not.  

If you’re not into cycling, maybe the Des Moines Marathon is for you. Marathon training can take months, if not years, in order to prepare for 26.2 miles. Running and staying active is one retirement activity that pays back out with high dividends.  

Lastly, if neither of the options above sound appealing then maybe golf will spark some interest! There are plenty of golf courses to spend your retirement time at in Iowa. However, if you want to consistently practice your short game at the state’s best-ranked golf course, Harvester Golf Club may be the right fit for you. Harvester is a nationally-recognized golf course situated squarely in the small town of Rhodes, and this championship level 72-par course delivers when it comes to lush landscapes, well-manicured playing spaces and the epitome of a great golf game. 

  • Social Security & Retirement Income

The Hawkeye State offers tax deductions and credits to help reduce your tax liability, including a tuition credit, a farm-to-food-donation tax credit, and gambling and theft losses deductions.

Social Security benefits are not taxed in Iowa. You heard that right. Social Security benefits are excluded from income when you’re figuring out tax.  The federal government taxes up to 85% of Social Security benefits depending on your income. This is good news for you, Iowa is one of 38 other states who don’t tax Social Security income. 

If you are 55 or older and you receive pension or IRA income, there’s more good news. You may be eligible for a deduction on your Iowa tax return for the cost of living adjustment (COLA) amount. Pension and IRA income, including Social Security income, up to $6,000 is eligible for this deduction.

And wait… there’s MORE? Beginning in tax year 2023, Iowans age 55 and older are exempt from state tax on retirement income earned from individual retirement account (IRA) distributions, taxable pensions and annuities. An estimated 294,624 Iowa taxpayers will see their retirement tax liability eliminated in 2023.

  • Property Taxes

There are a number of factors that go into the property taxes of any given state. Home values and rates are, of course, a big part. In Iowa, you can expect your effective tax rate to be 1.53%, which is slightly above average by our calculations. That said, while property taxes paid are moderate in Iowa, the values at which they’re applied aren’t particularly high. This will give you more bang for your buck when you decide to buy a home to retire in or decide to downsize.

Let Us Plan Your Iowa Retirement

If Iowa retirement seems like a good fit for you, Johnson Wealth and Income Management can help make your dreams become a reality. We offer a wealth of services custom-designed to help you get the most from your retirement. Here are just a few of the areas we specialize in to help you make the most of your retirement:

  • Retirement Planning
  • Estate Planning
  • Investment Planning
  • Money Management
  • Insurance Options
  • Tax Options
  • Lifestyle Balance

Visit Our Two Locations

You’ve been working hard for a long time. You want to be able to kick back and enjoy life—but you also want to help ensure that if something happens, your family will be taken care of. If you’re looking for an experienced firm that can provide income planning with the utmost level of care and professionalism, look no further. Johnson Wealth and Income Management is here to help you every step of the way.

Whether you’re living in or near Clear Lake, Iowa or Humboldt, Iowa, our two locations are ready to help you take charge of your financial future. We’re proud to say that Clear Lake has been voted the #1 place to live in Iowa and Humboldt has been voted the #4 places to live in Iowa.

Do you live further afield? We offer virtual retirement income planning so you can reap the benefits of a personal Fiduciary from the comfort of your own home.

If you’re looking for a friendly atmosphere and personalized service, we’re confident that you’ll feel right at home when you step through our doors. For more information contact us today.

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