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home | Taxes | Which are the best states to retire . . .
 

Which are the best states to retire to in the US?
Ivan Gillis
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Which are the best states to retire to in the US?

 

"Best" in terms of taxes? Climate? Location? Economy? Lifestyle?

 

Right. I assume your utmost concern would be how heavy (or light) the taxes are if you plan to move to another state when you retire, because taxes affect your net disposable income amount.

 

Anyway, you need to know the taxes you'll have to pay, when you relocate to a new state

 

If you go by the presence or absence of a state income tax as a litmus test to choose the best states to retire to......

 

You could have missed something there - in the sense that other taxes like sales tax and property tax (both could be in higher amounts) could eat up your income more than what you expect ......

 

If there's no state income tax, it doesn't necessarily mean a low total tax bill or if there's state income tax, a higher total tax bill.

 

Think you've struck a pot of gold, if there's no state income tax?

 

Not really.....

 

You could be slapped with other chunky taxes like sales taxes, excise taxes, license taxes, intangible taxes, property taxes, estate taxes and inheritance taxes?

 

Depending on where you relocate to, mind you, you could end up paying all of them or if you're "lucky", just a few.

 

Then, it's better for you to stayput at your current place.....

 

OK, using tax as the criteria to choose which best states to retire to, We've 5 states here which are touted as "tax-friendly" havens, which you may want to consider:

 

1. Delaware

 

The state doesn't tax your Social Security benefits.

 

Other retirement income of up to $12,500 per person is also tax-free.

 

There's no sales tax but you need to pay property tax if you own a house there.

 

2. Alaska

 

It has no state income tax or sales tax and the capital city of Juneau waives its 5% local sales tax for residents 65 and older.

 

But house prices are high, so are property taxes.

 

But unlikely you want to move there - the climate, cost of living, leisure activities, medical facilities, and proximity to family and friends are all factors to consider in this case.

 

3. South Carolina & Kentucky

 

Both states impose income taxes but they give generous retirement-income exemptions.

 

Frankfort in Kentucky excludes food from its 6% state sales tax and levies a low property tax.

 

Columbia in South Carolina has a lower statewide sales tax of 5% but it charges higher tax on property and levies tax on food.

 

4. Albany, N.Y.

 

The state excludes a retiree from paying state income tax for up to $20,000 per person of retirement income (including private pensions, annuities, IRA distributions and Keogh-plan withdrawals).

 

Also, pensions from N.Y. State and local governments, the military and the federal government are exempted.

 

However, there's a combined state and local sales tax of 8% and a moderately high property tax. There's no tax on food.

 

5. Lansing, Michigan

 

You can enjoy state income tax exemption of up to $72,000 of private pension income per couple.

 

So, if you're looking for some best states to retire to (in terms of tax), you need to know how all the taxes stack up and decide whether you would be comfortable with the total tax bill.

 

 

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