Best Tax-Friendly States For Retirees
Thinking about moving to a different state to live out your golden years? Before making the move, make sure you weigh all the significant factors of moving to a different state. You must take into consideration the climate, proximity to close family and good friends, access to a good health care system, cost of living, and most importantly evaluate the taxes of the new state.
No matter where you plan to live during the retirement years, make certain that you have double checked all the local taxes. Since moving to a low-tax state in retirement can help make retirement savings last longer.
Tennessee is the 16th state, located in the upper South of the eastern United States, and borders eight states: Alabama, Arkansas, Georgia, Kentucky, Mississippi, Missouri, North Carolina and Virginia.
Tennessee expects to appeal to retirees who hinge profoundly on investment income since Tennessee does not charge any income taxes. Consequently, Social Security retirement reimbursements and income from retirement accounts are not taxed at the state level. Property taxes in Tennessee are quite low too.
Offering new arrivals lots of outdoor recreation and a countryside lifestyle, Tennessee is one of the fastest budding states in the U.S. with one of the fastest-growing cities – Nashville, the heart of the country-music scene, with the long-running Grand Ole Opry, the Country Music Hall of Fame and Museum.
Arkansas is the 25th southern U.S. state bordering the Mississippi River. The state was formed from part of the land acquired in the Louisiana Purchase.
With a population of about 3 million people, Arkansas is a state where retirees enjoy the leisure of low taxes, specifically on income taxes and property taxes. This mid-sized state also does not tax Social Security and the property taxes are ranked amongst the lowest in the USA.
Furthermore, Arkansas does not have an inheritance tax. Those retirees who want to pass on some of their capital or affluence to the next generation can do so tax-free, at least at the state level.
Arizona, a southwestern U.S. state, with a population of roughly 7.279 million offers so much more than that striking pit in the ground.
If you want to spend your golden years away from the cold weather forever, then Arizona is your state – to enjoy a warm climate year-round, but can still find areas that get their fair share of snowfall.
Retirees thinking to move to Arizona should be aware of the fact that the state normally has average to low tax rates compared to the rest of the country. Arizona is a temperately tax-friendly state. Living in Arizona as a retiree allows you to save on your Social Security benefits, inheritance, and estate taxes—allowing you to pocket more money and hence, leave more for the next generation.
4. South Carolina
South Carolina, also known as “The Palmetto State,” is a southeastern state recognized for its coastline of subtropical beaches and marsh like sea islands.
When it comes down to shortlisting the retirement hotspots, numerous destinations of South Carolina also make great places to retire. Moreover, senior citizens and retirees in South Carolina enjoy mild winters, Atlantic Ocean beaches and a low cost of living.
As for considering the tax situation, South Carolina does not tax Social Security benefits. The state offers substantial immunities on retirement income. There’s no legacy or estate tax, and property taxes are on the low side. Additionally, for homeowners aged 65 and older, the state’s homestead immunity allows the first $50,000 of a property’s fair market value to be relieved from local property taxes.
“The Centennial State” – Colorado, a western U.S. state, attracts people from all over the world with its majestic snow-covered Rocky Mountains, varied scenery of arid desert and river gorges. Having some of the best places to retire, Colorado allows retirees to connect with Mother Nature to relish the countryside and live out their golden years in peace and tranquility.
The state of Colorado has a pension/allowance deletion that includes Social Security, retired military pay, and military disability pay, as well as a homestead immunity for succeeding seniors.
Colorado normally ranks among the top tax-friendly states for retirees and senior citizens. The state income tax bracket is as near to the ground as 4.63%, and retirees can get a fair-minded presumption on retirement income.
Nevada, also known as “The Silver State,” is situated in the Western region of the United States, with a population of roughly 3.08 million.
It has an enjoyable climate nearly all year-round, the entertainment is second to none, and the topography is luxuriantly speckled with deserts and mountains. But let’s not forget to add the other apparent factor: “Las Vegas”, the “Entertainment Capital of the World,” is Nevada’s largest city.
If you don’t plan to gamble on your retirement savings, then Nevada is the hotspot to spend the remaining years of your retirement life – or in other words “the golden years”.
Retirees can easily cash in their retirement plans and collect their Social Security checks without worrying about a big state tax bill since there is no state income tax. Additionally, there are no estate or heirloom taxes in Nevada, either.
Wyoming – “The Cowboy State” is the 10th largest state by area but also the least populous. It is the state in the Mountain West subregion of the Western United States.
Wyoming is a great place to live out the golden years if retirees are looking for a quiet and peaceful retired life. With no income tax, quality healthcare system, and national parks, retirees can’t go wrong with living in Wyoming.
If you are someone who is looking for a place with an abundance of natural beauty, a slow pace of life, and most importantly affordable taxes, then Wyoming is the best place to move to.
RELATED: 5 Types of Retirement Income That Are Exempt from Taxes
8. District of Columbia
“The Capital of the World”- Washington, DC, the U.S. capital, is a dense city on the Potomac River, adjoining the states of Maryland and Virginia.
It is worth considering spending your golden years in D.C, whether the motive is to be in close proximity to family and friends or to hear the Atlantic coast calling your name.
Even though the overall cost of living in Washington, D.C., is high, the regular tax load for retirees isn’t. The District of Columbia releases all Social Security retirement reimbursements from the city income tax and offers a presumption against government pension income. But, at the same time, it taxes furthermost other income from retirement accounts.
The majority of retirees have a reverie home in mind for superannuation. It might be a picturesque beach house, a log bungalow deep in the woods, or a penthouse. But whatever and wherever the dream home is, make certain that all the local tax situations in your ultimate destination are cross-checked before you pack your life and relocate to a new state.
State and local taxes can have a predominantly substantial outcome on retirees. The taxes retirees pay during superannuation can fluctuate significantly contingent on where they decide to move. Similarly, income taxes on things like Social Security retirement reimbursements and retirement account withdrawals differ extensively in every state, as mentioned above.
Also, there are massive variances between the property and sales tax rates across the country.