McKinney and Allen, Texas
Planning for McKinney and Allen households, where home equity leads the balance sheet.
McKinney has grown into a city of about 210,600 people, and neighboring Allen is home to about 110,300. In both, roughly a quarter of households earn more than $200,000 a year, and the median home is worth close to $470,000. For many families here the house has become the largest thing they own, and the planning questions start there.
The situation
Two growing cities that share a county and a set of questions
McKinney and Allen sit side by side in Collin County along US 75, and much of their housing was built and bought as the county filled in. Median household income is about $124,200 in McKinney and $130,900 in Allen; 25.5% and 27.9% of households, respectively, earn $200,000 or more, roughly double the share in the city of Dallas.
A McKinney or Allen balance sheet shaped by that growth brings its own decisions. Stay, downsize, or move elsewhere in Texas? Put the next decade’s extra savings toward the mortgage or the retirement accounts? And how does property tax, the one large state-level tax a Texas household pays, fit a retirement budget once the paychecks stop?
Why it’s complex
Five decisions that growth brings with it
Two cities, two school rates
In 2025 McKinney ISD levies $1.1043 per $100 and Allen ISD $1.1258. The City of McKinney charges $0.4123, the City of Allen $0.4154, and Collin County adds $0.1493 in both.
When the house is most of the net worth
A home near the local median of about $470,000 can outweigh a family’s retirement accounts. We treat it as part of the plan: what it costs to carry, what it could fund later, and whether it still fits the next twenty years.
Downsizing and the school-tax ceiling
From the year you qualify at 65, the school tax on your homestead is capped at that year’s amount. Buy another Texas home and the ceiling can move with you as a percentage, which can make a later downsize cheaper than it first appears.
Selling a home that has appreciated
Federal law lets a married couple exclude up to $500,000 of gain on a main home owned and lived in for two of the past five years ($250,000 if single). Long-time owners can pass that line, and Texas community property can help after a death.
The step-up in basisRetirement income without a state income tax
IRA withdrawals, pensions and Social Security face federal tax only. For a McKinney or Allen retiree, that leaves the Collin County property-tax bill as the state-level line to plan around, so we set it beside the withdrawal plan rather than after it.
Sequencing income across accountsSources: U.S. Census Bureau, ACS 2020–2024 5-year estimates for McKinney and Allen; Texas Comptroller 2025 city, ISD and county rate reports; Texas Comptroller, homestead exemptions; Tex. Tax Code §§11.13, 11.26; 26 U.S.C. §121.
Our approach
A plan that starts with the house and builds outward
We begin with the balance sheet as it stands, house included, and plan the next decade and the one after it. Property tax gets its own line. In McKinney, the $471,800 median home less the $140,000 exemption leaves $331,800 subject to school tax; at McKinney ISD’s 2025 rate that is about $3,664 a year ($331,800 × $1.1043 / $100). In Allen, the $464,100 median less the exemption leaves $324,100, or about $3,649 a year at Allen ISD’s rate ($324,100 × $1.1258 / $100).
Put the house in the plan
Weigh the equity in your McKinney or Allen home against retirement savings, confirm the homestead exemption is on file, and decide whether extra mortgage payments or retirement contributions come first.
Build the other side of the ledger
Raise tax-advantaged saving, use Roth accounts while income allows, and keep an emergency reserve that does not depend on borrowing against the home.
Decide where to live
Model staying in Collin County, downsizing to another Texas home with a transferred school-tax ceiling, or moving nearer to family, and set Social Security and withdrawal order around that choice.
The work
What you’ll work through with us
- A net-worth review that treats the home as an asset with a carrying cost
- Mortgage payoff versus retirement-saving trade-offs
- Homestead and over-65 exemption filings for your McKinney or Allen home
- A downsizing analysis, including the school-tax ceiling transfer
- Capital-gain planning ahead of a home sale
- Retirement income, Social Security timing, and withdrawal order
- Community-property titling for a home bought in McKinney or Allen, with your estate attorney
- Investment management coordinated with your CPA
Planning is led by Theo Halbardier, CFP®, CIMA®, CAIA®, the firm’s founder. We are fee-only: no commissions, no product sales. About Theo
Questions
Common questions from McKinney and Allen households
Do you have an office in McKinney?
We work with McKinney and Allen households by video and, by arrangement, in person. We do not maintain a public office location.
What does the homestead exemption save in McKinney and Allen?
The $140,000 school exemption is worth about $1,546 a year at McKinney ISD’s 2025 rate and about $1,576 at Allen ISD’s. At 65 or if disabled it rises to $200,000. A McKinney or Allen street address does not settle which school district taxes the home; the appraisal notice does.
We're thinking about downsizing. Does our school-tax ceiling come with us?
It can. Texas lets a homeowner who qualified for the over-65 ceiling carry it to a new Texas homestead as a percentage of the old limit, using the Comptroller’s transfer certificate. Moving from a McKinney ISD or Allen ISD home to a smaller one, the result depends on both homes and both districts, so we run the numbers before you list.
Should we pay off the mortgage before we retire?
Sometimes. A paid-off house lowers the cash you need each month, but with McKinney and Allen medians near $470,000 it can also leave most of your net worth in an asset you cannot spend without selling or borrowing. We compare the two paths using your rate, your bracket and your retirement date.
How is a home sale taxed if one of us has died?
In Texas, a home bought during the marriage is usually community property. At the first spouse’s death both halves can take a new cost basis at that day’s value, so much of the gain built up in a McKinney or Allen home may no longer be taxable if the survivor sells. Title and records matter; confirm with your estate attorney.
Does Texas tax our retirement income?
No. Texas has no personal income tax, and the state constitution prohibits one, so IRA withdrawals, pensions and Social Security are taxed only at the federal level. What remains is property tax, roughly $1.67 per $100 in McKinney and $1.69 in Allen across city, school district and county, which is why it belongs in the retirement budget from the start.
Reviewed by Theo Halbardier, CFP® · Updated September 2026 · Figures current for 2026
Tell us where you are.
The first conversation is 30 minutes. Bring your questions; no preparation needed.
We work with individuals and families across McKinney and Allen, and throughout Texas, meeting by video or in person by arrangement.
Meet with usWe do not maintain a public office at this location; McKinney is part of the area we serve. Figures reflect law and published rates as of September 2026 and may change.