Retiring in Georgia –A Guide for Georgia Self-Directed IRAs
People who own Georgia Self-Directed IRAs know that when it comes to a combination of cost of living, tax-friendliness, access to big-city life in the centrally-located metropolis of Atlanta, the rugged mountainous beauty of Appalachia and the Smoky Mountains, and beautiful beaches, Georgia is tough to beat. It can get pretty muggy in the summer, but not impossibly so – and for the rest of the year the climate is quite mild.
Many are attracted to Georgia’s rich American heritage, with many Civil War battlefields to explore, as well as the beautiful and historic port city of Savannah. Georgia is also home to some of the most beautiful golf courses in the world, including the course belonging to the world-famous Augusta National Golf Club – which just admitted its first two female members in 2012: Condoleeza Rice and Darla Moore.
The first $65,000 in income is normally tax-free to Georgians over age 65. That includes income from Georgia Self-Directed IRAs and Georgia 401(k)s. A lot of people miss that little detail, assuming the standard income tax rate applies to everyone at any age.
Georgia also exempts up to $35,000 in income for those ages 62 through 64.
What’s more, Social Security income is also exempt from Georgia’s state income taxes.
Additionally, the State of Georgia allows senior citizens some substantial property tax exemptions, though electing to take the county exemption rather than the state exemption usually
There is a state sales tax of 4 percent exempting food and prescription drugs. Individual cities and counties may add another 4 percent on top of that, for a total of 8 percent. Atlanta is the priciest spot in the state, though, when it comes to sales taxes.
Going by median house sales sales prices, the most expensive counties in Georgia are Greene ($309,000), Forsyth ($285,000), Fulton ($260,500), Oconee ($254,450) and Fayette ($239,900). The least expensive counties were data was reported were Treutlen ($29,500), Montgomery ($39,250) and Taylor ($39,500). Data from Trulia.com.
Asset Protection and Creditor Protection Laws
Some states let you choose between the federal bankruptcy exemptions and the state exemptions. Georgia is not one of them. If you file for bankruptcy in Georgia, you must operate under the exemptions established by Georgia law. All exemption amounts are doubled for married couples.
Georgia is not nearly as friendly to debtors as its neighboring Florida, which shields an unlimited amount of home equity, life insurance cash value and annuity surrender value from the claims of creditors. In contrast, Georgia law protects only $21,500 in home equity – double that if you’re married. Up to $5,000 of unused homestead exemption can be used to protect other property as a sort of catch-all “wildcard.”
Additionally, Georgia bankruptcy courts exempt the following from creditor attachments:
- $500 in jewelry
- $5,000 of value in furnishings, books, clothing, animals, crops, general household items and musical instruments – though capped at $300 per item.
- Up to $5,000 in automobile value
- A burial plot (but not if you use the homestead exemption.)
- Alimony and child support necessary for support.
- Public benefits are generally exempt.
- The greater of 40x the state or federal minimum wage, or 75 percent of earned but unpaid weekly disposable earnings.
- Life insurance proceeds for dependents, but only to the extent necessary for support (Consider a trust if your dependent has credit issues that may result in bankruptcy in the future, or is for whatever reason at risk of being sued.
- $600 wildcard for anything you like.
Georgia generally provides unlimited protection to pensions, including Georgia 401(k)s and for Georgia Self-Directed IRAs and Georgia Roth IRAs, as long as the funds remain within the retirement plans. Once you liquidate, however, they may become collectible and the bankruptcy courts may force you to cough up the asset.
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