Unless they are considering the full-time-rv lifestyle. Then it becomes not only a common term, but an issue around which much research and decision-making occurs.
All our lives we identify with our "residence". Simply - where we "reside". Meaning we live there. We are physically in that location. It's where we plant a garden, hang our clothes, arrange our furniture. It's where our family and friends, and the pizza delivery guy, find us.
It's the same place we get our mail, and our voting information, and our car registration/insurance. It's where we pay our taxes. It's where we're counted in the Census. But, what I've learned while planning our launch is that these things are not about our residence. They are about our domicile.
Fortunately several veteran full-timers have done the research on the differences between domicile and residence, and what that means for the rest of us. Thank you Howard/Linda and Nina/Paul and Cherie/Chris, and countless other vanguards out there. We can learn every fact that defines the differences between residence and domicile. But we don't have to (yay) because we can read a few well-documented summaries, and know what's important for choosing our own domicile.
Because while we aren't required to have a residence - we must have a domicile. Well, only if we want to have a driver's license, a bank account, credit, voting rights, a passport, health insurance, vehicle insurance - little stuff like that. Uncle Sam and our 50 cousins (known by their State names) are also very vested in us having a domicile - for tax payments. Since I'll be driving on and across those taxes, I'm more than okay with paying them, but domicile impacts the amount we contribute, and that's always a factor in retirement.
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| Not the same place when you're full-timing |
Three things generally impact the domicile-decision: money, mail, healthcare providers. It is no different for us. Although we are pretty healthy and rarely visit a doctor, the third one was the final deciding factor. By "final" I mean "what-we'll-do-for-the-first-year". We expect to learn a lot about what's right for us after we get out there!
It is an important decision and we feel comfortable knowing that while our residence will be where-ever we are, for now our domicile will continue to be in California.
Being debt-free by February means we can live comfortably with our net-income pensions. Simply put, we can afford to continue paying California income tax. At least we think we can. We'll know for sure in a year.
This week we made arrangements for our new address with good friends in Orange County. This resolves the issue of mail, plus establishes location for insurances, etc. It means changing doctors and medical facilities, but keeps us in the Kaiser Permanente network.
Which was the main reason we maintained domicile in California. One factor that allows us to live on our pensions is that fully-paid medical, dental and vision are included. As long as we "live" in California. We have been extremely happy with Kaiser's quality of care and the on-line access will be invaluable for us on the road.
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| Prescriptions, physicians and records go with us |
There is a healthcare stipend option for living elsewhere, but until we've experienced the life we see no need to consider that change yet.
All but one of our "kids" live in California so that makes this one destination for family visits as well as medical appointments. Bonus!
There are drawbacks to every domicile choice. There are former-Californians who couldn't wait to "get out from under" the higher taxes. Certainly hospital care and jury duty commitments are a challenge when your domicile is on either coast. Hell, there are places in this country where having California license plates could get us run out of town.......
But for us this is a good, possibly temporary, decision - AND it's one more thing off the rapidly shrinking list of must-get-done-things to complete before we can launch.
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| The list is getting shorter.... |
Domicile? Check! Residence? Pending......
Have you thought about what happens if you get called for jury duty while on the road? The reason I mention this is because it has happened to us twice this year. We changed our domicile to Texas and we are members of Escapees and their mail service. Fortunately, the folks in Polk County where our address is now, are very familiar with Escapees and truly understand our lifestyle. We did not receive my husband's jury duty notice until three weeks after the date he was to serve. He called and they said no problem just volunteer when you are in the area. I am not sure if it is that easy elsewhere. I would be interested in hearing what you find out on this topic.
ReplyDeleteThe reason we received the notice three weeks late was not Escapees fault, but mine. I had not requested our mail for six weeks.
DeleteWe have been averaging a summons about every four years and are hoping that trend continues :-). Being out of state will get us one excused call, then we'll have to figure it out on the next one. By then we may have changed to Texas or Florida...... We shall see :-))))))
DeleteWe did the same thing for our first year on the road, just to let everything settle in. Not that we kept California, we kept Virginia. We too were perfectly healthy and didn't have to worry too much about health insurance. What we had was fine. But over that year, we discovered that this was indeed the life for us and there were too many benefits from a Florida domicile so we got organized to change. And then the healthiest man I know was diagnosed with an incurable cancer and everything changed. He could not then afford to change his health care. But I did redomicile in Florida and it has been a real savings all the way around. Now that you remind me though I'd better have them send my mail.
ReplyDeleteKnowing things can change in an instance is what keeps me tied to an excellent medical system. I figure we'll have time to look at options and talk to folks who have "moved". WA is an option with no income tax and they do have Kaiser (not covered by my pension though)......and I hear FL has better health care options than TX and SD.
DeleteLOL on remembering to get your mail! Maybe three pieces a week make it past our trash can and into the house so I'm sure it will have the same low priority for us :-).
Yes Jodee all these things are important and while it wont effect you, anyone that starts full timing while self employed needs to check into allowable tax deductions while working on the road. Where your business home is makes a big difference on travel cost allowable deductions!. It gets very tricky.
ReplyDeleteMaura
Good to know! I shy away from anything that resembles "real work", but Bill has thought about it. I'll make sure we are clear on the business tax piece before making any changes. Thanks!!
DeleteWe switched from CA to OR because my daughter lives in OR and could vouch for us and be our mail service. We have since discovered that OR income tax is high and treats capital gains differently than we had expected (not in a good way!). If we continue to fulltime indefinitely we'll probably look at other states (the usual suspects, TX, SD, FL). If we buy a house in the next two years we'll go with whatever state we land in (possibly WA, no state income tax). It is definitely not an easy decision to make! Probably no state is perfect!
ReplyDeleteI've thought about both OR (Portland has Kaiser, we love OR) and WA (son lives in Seattle, no income tax, Kaiser has a few facilities) and they aren't off the list - good to know about OR taxes :-(. I haven't found a perfect one yet, but it will be interesting to see the impact our growing numbers of full-times has on several fronts.
DeleteWe went through this also. We were originally going to be TX residents but discovered that PA doesn't tax retirement income so we stayed there. We use our daughter's address since she lives in the same area we are from which works perfectly. Glad you are now one step closer to your new life:)
ReplyDeleteI'll have to look at retirement vs income as well - although I do know that CA taxes them the same :-(. Every step makes it more real :-))
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