M.O.V.E. — Use this 4-Letter Word to Fight Back against the High Cost of Living
In October of 2013, I was knocked unconscious and robbed. The perpetrator was my anesthesiologist. But the real culprit was balance billing, the practice of allowing healthcare providers to collect for unsolicited or nonreimbursable services even when they’re delivered without patient knowledge or consent.
My heart surgery had been scheduled weeks before it was performed. I already knew that my hospital and my surgeon were in-network providers. I knew I’d be expected to meet my deductible and then split all costs 60/40 with my insurer until I met the out-of-pocket limit — $14,000.
Those were the terms of the insurance plan I had chosen. That was the contract I had signed. So even though paying off my balance was tough, at least I knew what to expect. I was prepared.
But since my anesthesiologist wasn’t in my insurance company’s network of preferred providers, he wasn’t held to the terms of my policy. He could charge me whatever he wanted. And because of where I lived, I was responsible for the bill.
Isn’t that a good reason to move?
Reason #1 — balance billing
Even though balance billing is a criminal way to treat patients, it’s entirely legal in most states. As I age (and with a patched-up ticker, to boot), I’m increasingly aware of the potential for unexpected medical costs to wipe out my savings. Even a single illness or accident could leave me indebted at best, bankrupt or going without needed treatment at worst.
Moving is one of the best ways I have of protecting myself from soaring medical costs. I could relocate to one of the medical tourism havens, for example. Or I could go to a country that offers its citizens and alien residents free or inexpensive healthcare. All of the places I’d want to live, with the notable exception of my own home country, provide medical treatment as a basic right.
I wouldn’t have to expatriate in order to find some protection from balance billers, though. I could just move to a state that has outlawed the practice. There are several that have, Florida among them. And The Sunshine State offers a host of other financial protections as well, making it a top retirement spot for seniors.
And you thought it was all about golf and beaches, didn’t you?
Reason #2 — taxes
Citizens are expected to reduce their tax bill by any legal means at their disposal. Moving is one of the most reliable ways to do that since tax burdens (the combination of state, property, sales and excise taxes) vary widely from state to state.
According to Wallet Hub, the tax burden for New York residents is almost 13% of income while Floridians pay only a little over 6 and a half percent and Alaskans, barely over 5. In real dollars, that means that households earning the median income of $63,179 would pay $8194 for state and local taxes in New York but only $3222 in Alaska.
Alaska’s a tad on the chilly side but parts of northern Florida, with its warm summers and mild winters, are in the baby bear sweet spot for me. I’d pay $4145 on a median income there; that’s a $972 savings over the $5117 I could expect to pay in my current home state of Georgia.
That’s a nice piece of change.
Reason #3 — homestead exemption
Imagine yourself at 80. You’ve been drawing down your savings at the recommended rate but you’ve spent a sizeable chunk of it and there’s not a lot left. That’s okay; you still have your Social Security income of $1355 a month (the average benefit amount as of August 2019). And you’ve got your home.
It’s mortgage-free, thanks to your hard work and diligent loan-repayment discipline. So even though there isn’t a lot of fat in your budget, you’ll be all right.
Until you’re not. Because something is coming for you. Something is coming for us all. Very few of us will drop dead of a heart attack mid-sentence. Fewer still will win the “passed away in their sleep” lottery all of us are betting on.
Most of us will have serious chronic or acute illnesses before the end of our lives. We may need nursing-home care or access to assisted living. We may need medical treatment for years or even decades. And in the U.S., as I’ve mentioned before (because I can’t quit talking about it), that’s expensive.
We’re all one hospital stay away from losing our savings (see balance billing, above). And if you owe more than you can pay, the hospitals and doctors who treated you can pursue you for the bill.
This can affect working people as well as retirees. In some ways, employees are even more at risk because once the courts grant a judgment to your creditors, your wages can be garnished.
A creditor can even force the sale of your home in some states (not in Florida). And while you may have a certain level of homestead protection, the lion’s share of the proceeds from the sale will go to the lion while you (the lamb, in this metaphor) will be fleeced.
You can lose your home in other situations, too. If you file for bankruptcy, the courts have some say over whether you’ll get to keep your assets or have to sell them to settle up.
And you’ve heard, of course, of the possibility that you’ll be sued, in spite of your good intentions, “for everything you’ve got.” That includes your home if you own it (even if you own it jointly with the bank) unless you live in a state that offers a homestead exemption against this kind of financial disaster.
When it comes to providing legal protection from people who want to take your home, states are all over the map. You can see how well your own state is taking care of you by clicking on an actual map at this link.
If your home would be easy to lose in a personal financial meltdown of any kind, you might want to consider selling and building equity elsewhere, in a state that’s looking out for your best interests.
Reason #4 — protection of retirement income
Your 401K is federally protected. You can’t lose the money in it as a result of medical debt, bankruptcy, or a lawsuit, no matter your home state.
When it comes to IRAs though, the rules are a bit trickier. They depend (as I’m sure you won’t be surprised to learn) on where you live.
New Mexico and New Hampshire, for example, have no laws protecting their citizens’ IRAs from lawsuits. How can people live like that?
You can use this link to find out how well your IRA is protected in your own state. And it should probably be noted that if your creditor is the IRS, it doesn’t matter where you live; they will find you and they will collect.
Reason #5 — free college
We’ve been hearing a lot of grumbling about the student loan crisis. But one thing people aren’t talking about much is how to avoid this debt. You can do that by moving to one of the states that offer their residents free or mostly free post-secondary education.
My home state of Georgia offers free tuition to undergraduates who maintain a B average. And it’s not alone.
Twenty-four states have tuition-assistance programs in place, at least for the first 2 years of college. That could cut your costs for a degree in half.
Some states require a diploma from one of their high schools to qualify for subsidized tuition. If your sights are set on a school in one of these states, you need to get your parents to move before you graduate and to take you with them.
Arkansas requires that you continue to reside in the state for at least 3 years after graduation. Other states require residency in the year preceding enrollment.
But so what? You don’t have to go to Europe on your gap year. Move to one of the free-tuition states instead, meet the residency requirement, matriculate, and graduate debt-free.
Then, oh, the places you’ll go!
Reason #6 — lower cost of living
Even if you don’t need to protect yourself from late-life asset loss or young-life student debt, you can still benefit from moving. Small towns may not offer as much in the way of employment opportunities as larger cities do, but that makes no difference to people who work remotely.
Shaunta Grimes sharply reduced her monthly expenses by relocating to a small town. Her rent went from $2600 a month for a 1700 square-foot house in Nevada to $1000 a month for one in Pennsylvania that’s 4,000 square feet. You can read her story here.
Aside from steep savings in housing costs, people who move to small towns stand to gain cuts to transportation spending, too. My aunt lived her whole life in a small college town and never owned a car. She used a city bus infrequently and walked to the store, to church, and to her friends’ houses.
Her regular activity surely contributed to her good health and long life. And living in a small town instead of a bustling metropolis helped her to save a considerable nest egg, too.
The cost of medical care, which you may have heard me complain about before, also varies from state to state. Seven out of 10 of us will require long-term care (LTC) at some point in our lives but whether we’ll pay an annual $40,523 for it (Louisiana)or $117,800 (Alaska) depends on where we live.
You can get an idea of your home state’s average costs here. And if you anticipate the need for LTC for yourself or a family member, tens of thousands of dollars in savings might be worth a move.
Reason #7 — a higher quality of life
Ten years ago, I subscribed to International Living (IL) magazine in a moment of panic. I was in my 50s and I hadn’t achieved my retirement savings “number” yet. It didn’t look as though I ever would.
At the time, I thought leaving the country was the only way I’d be able to retire and enjoy my golden years. International Living, I thought, would help me find my perfect home.
But what I found between its pages instead was the message that there are plenty of affordable places to live. There are plenty of places with friendly people and breathtaking natural beauty.
If you’ve read even a single issue of IL, you already know its message — any little village in the world is better than Big City, USA. That’s what they’d have you believe, anyway.
As it turns out, the publishers at IL aren’t just selling information about overseas destinations. They’re also selling property developments.
Mostly, they’re selling dreams. And it isn’t a hard sell because the dream they tell you is possible is a dream you may already have.
It’s the dream of a good life, a simple life, a life that doesn’t require you to be hard at it, hunched over your computer for 60 or 80 hours a week. It’s a life that’s affordable enough to provide you with whatever you need to get by and to leave you with a little left over for a rainy day.
And it’s a dream that’s within reach.