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Taxes, health care costs added up for this list of best states for retirement

DEAR MR. MYERS: You recently listed the 13 states that tax the Social Security payments that retirees receive. But are you aware of any recent reports that rank the best states for retirement based on other factors, such as the quality of their health care facilities and their overall living expenses?

ANSWER: Sure. As I said in that earlier column, there’s a lot more to deciding whether to move when you retire than simply determining whether your Social Security benefits would be subject to state income taxes.

Researchers at one of my favorite financial websites, Kiplinger.com, recently ranked all 50 states based on a combination of factors. They ranged from the quality of health care options, housing costs and general living expenses to each state’s ability to pay their current and future financial obligations.

South Dakota topped the list, based largely on its low overall living expenses and its tax-friendly treatment of retirees. The median-priced home in the Mount Rushmore state stands at a relatively modest $174,620, according to realty website Zillow.com, but is steadily rising thanks to the state’s expanding economy.

Surprisingly, Hawaii ranked second despite having the highest overall living costs in the nation. But its health care costs are 11.4 percent below the national average, and people ages 65 or older have an average household income of $71,997, which easily is the highest in the U.S. Its idyllic weather and multitude of recreational options boosted its ranking, too.

Rounding out the Kiplinger’s Top 10 list were Georgia, North Dakota, Tennessee, Alabama, Virginia, Florida, New Hampshire and Utah.

An online company, eRetirements, offers a free service that can help you pick the best places to retire based on a variety of factors. Its website definitely is worth a visit.

REAL ESTATE TRIVIA: A survey by Merrill Lynch and Age Wave, a research firm, found that 64 percent of retirees have either already moved from their longtime home or plan to in the future.

DEAR MR. MYERS: What does it mean when an advertisement for a home says that the property is “BOM”?

ANSWER: It’s realty jargon for “back on the market.” The seller may have sold the home only to have the deal fall apart, or perhaps he or she relisted it after voluntarily taking it off the market for any number of reasons.

DEAR MR. MYERS: I have signed a contract to purchase my first home and followed your advice by making my offer contingent on first receiving a satisfactory report from a professional home inspector. But what if the home fails the inspection?

ANSWER: A home cannot “pass” or “fail” an inspection. The nonprofit American Society of Home Inspectors (847-759-2820; homeinspector.org) notes that it’s merely a general examination of a property’s physical condition, much like a routine visit to a medical general practitioner.

In short, the primary purpose is to gauge the home’s general physical shape and to indicate what repairs may be needed.

Nonetheless, you were wise to include the inspection contingency in your purchase offer. If you’re unhappy with the inspector’s findings, you’ll have the power to insist that the seller either makes the needed repairs, cut the asking price so you’ll have the money to do them yourself, or simply cancel the sale and get your good-faith deposit back.

DEAR MR. MYERS: We want to refinance our home. Unfortunately, we recently bounced a couple of checks by mistake. Will they appear on our credit report and ruin our chance to refinance?

ANSWER: Probably not. Bounced checks and overdraft fees aren’t reported to the nation’s big three credit bureaus, so they don’t have a direct impact on a consumer’s credit score.

However, if you fail to promptly “make good” on the bounced checks and the recipient or bank turns the matter over to a collection agency, the agency will report its collection activities to the bureaus and your credit score would drop.

Collection accounts stay on a report for seven years, usually from the date of the first delinquency on the underlying debt.

David W. Myers’ column is distributed by Cowles Syndicate Inc.

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