Ultimate Guide to Retiring in New Jersey

Retirement is something we're all looking forward to. After years in the workforce, nothing sounds better than to spend your days as you like. But where should you spend them? While some retirees settle down where they've spent most of their lives, others want to move and see what else may be in store for them.

New Jersey could be your ideal retirement destination. There are plenty of outdoor activities, stunning nature, and big cities nearby. If you're looking for somewhere to spend your golden years, New Jersey is a state to consider.

Pros and cons of retiring in New Jersey

Like any relocation, there are pros and cons of moving. New Jersey is a coastal state with different upsides and downsides than a landlocked state such as Colorado. Before moving, consider all the pros and cons to make the best choice for the retirement you've been looking forward to.

Pros of retiring in New Jersey

There are many great reasons to retire in New Jersey. If you like getting out of the house, you'll love the Garden State. New Jersey is home to many beautiful beaches, exciting boardwalks, and plenty of natural areas to enjoy. There's never a shortage of outdoor activities in New Jersey, as there are acres of forests and parks throughout the state for everyone to enjoy.

Outside of nature, New Jersey is home to popular East Coast cities, such as Princeton, Trenton, and Toms River. There are also plenty of cities in New Jersey that are close to the border, so if you have any interest in visiting New York City or Philadelphia, New Jersey has you covered.

New Jersey also has a bustling art scene. Many of the state's most popular cities have lively downtown districts filled with bright colors, interesting architecture, and tasty treats.

Cons of retiring in New Jersey

While the Garden State has a lot to offer for a potential retiree, it has its drawbacks. New Jersey isn't the most affordable state to retire in. It costs just above the national retirement average to spend your golden years in this coastal state, which is something to consider when looking at your budget. Home prices in New Jersey reflect this increase in the cost of living as well. If you buy a home in New Jersey, you'll face some of the country's highest property taxes.

New Jersey is close to New York and Pennsylvania, meaning it has a lot more traffic than other states have. It also has major cities with their own traffic problems, but commuting to New York City or Philadelphia from New Jersey may also be challenging.

For retirees especially, the New Jersey climate is something to consider. There's nothing better than a nice summer day on the beach, but in the winter, New Jersey can be quite cold. It can experience storms called nor'easters, which are common in the north and eastern parts of America and Canada. It's also a state susceptible to natural disasters. While the warm ocean air surrounding the state protects it from the worst of winter storms, it's something to consider.

Cost of living in New Jersey

One of the most important factors to consider before you move to retire is the cost of living in the state you're heading toward. While New Jersey has a lot to offer for retirees who appreciate nature, it has a relatively higher cost of living than other states.

Housing costs

Housing is usually the expense retirees spend the most of their budget on. New Jersey has one of the highest property tax rates in the country, contributing to a higher cost of living for homeowners. The state's property tax rate averages around 2.26%, well over double the national average of 0.99%.

Renting is also costlier in New Jersey than other states, especially in areas close to Philadelphia and New York City. The average rent for a one-bedroom apartment can range between $2,000 and $4,000 depending on the location, with cities such as Hoboken and Jersey City on the higher end.

Healthcare costs

Healthcare is another crucial concern for retirees. New Jersey has some of the best health care facilities in the country, and their costs can reflect that. Medicare usually covers a large portion of medical expenses for those 65 and older, but out-of-pocket costs for services not covered by Medicare can add up. While New Jersey's top-tier facilities are desirable for those who can afford them, they could deter those who can't.

Tax and retirement income

New Jersey has a mixed tax environment for retirees. While Social Security benefits are not taxed at the state level, other retirement income, such as pensions and 401(k) withdrawals, are subject to state taxes. If you choose to withdrawal from your retirement plan before the age of 59 1/2, however, you could be subject to a 10% early withdrawal penalty. There are a few exceptions to this rule, so be sure to check if you qualify before making your withdrawal.

However, there are ways for retirees to lower their overall tax burden in the Garden State. Couples who file together and claim less than $150,000 in annual income may be eligible for tax benefits on their retirement income. Estate and inheritance taxes are also two important factors to consider when looking for a new home. Estate taxes can put a major dent into the amount you want to pass on to the next generation. In 2018, New Jersey eliminated their estate tax, meaning the state can't tax your estate once you pass away.

Best places to retire in New Jersey

When looking for your next home, the environment is as important as the cost of living. New Jersey is a great state to retire in for its diversity. The Garden State has something for everyone: metropolitan cities for nightlife lovers, rural areas for peace and quiet, and laid-back beach communities focused on fun. Each choice offers something different for retirees.

Cape May

Cape May may be the best coastal town in all of New Jersey. It's located at the state's southern end, taking you away from all the commuter traffic heading toward Philadelphia and New York City. Cape May is known for its beautiful Victorian architecture, lively community, and some of the state's best beaches.

Cape May offers a slower pace of life than other New Jersey cities. But don't take that the wrong way, as the Cape has plenty of boardwalk activities, local shops, and restaurants that will always leave you with something to do.

Princeton

A town synonymous with its university, Princeton is a great choice for retirees looking for intellectual stimulation in their golden years. Princeton is one of the culturally richest cities in New Jersey, offering world-class cuisine and performances by people from across the globe. It's one of the most diverse cities in the Garden State, with plenty of wonderful parks, tree-lined streets, and carefully curated museums.

Princeton is unique because it offers both small-town luxuries and big-city amenities. The McCarter Theatre Center offers retirees a location to see award-winning shows, while the mom-and-pop boutiques bring some comforting humility to this impressive city. If you want to be close to Philadelphia and New York City, Princeton is in an ideal location.

Ocean City

Ocean City is another excellent retirement destination for those who love the beach. It's located right on the famous Jersey Shore and is known for its family-friendly atmosphere and famous boardwalk. Out of all the cities on the Shore, it's probably the most laid-back, making it the best destination for retirees.

Ocean City has plenty of classic retirement activities, including great golf courses, idyllic fishing spots, and even more ocean to sail in. Ocean City is the perfect pick for a retiree who likes the coast and a cool way of life at the same time.

Toms River

Toms River is one of the more affordable options for retirees migrating to New Jersey. It's located right on the Jersey Shore but offers many more inexpensive housing options than other locations. Toms River provides easy access to beaches, parks, and a plethora of outdoor activities.

Toms River is also home to a large and active senior community, with many local organizations and clubs offering social and recreational opportunities for retirees. Whether you enjoy spending time outdoors, visiting local attractions, or taking part in community events, Toms River has something for everyone.

Is retiring in New Jersey the right choice?

Retiring in New Jersey balances exciting city life with quiet, laid-back time in nature. The state is close to two major East Coast metropolises in Philadelphia and New York City, giving retirees two exciting cities to explore. The Garden State has a wide variety of beaches, state and national parks, and boardwalks for retirees to enjoy.

The state's higher-than-average cost of living may be its only downside. By weighing the pros and cons, you can make an informed decision and decide if New Jersey is the state you want to retire in.

MM202711-310867