The Best State to Save Your Retirement Money
What is the best state to save and stretch your precious retirement money, from a tax stand point? When most of us think of retirement, sunny Florida beaches with silly hats and umbrellas come to mind. But the best states to wile away your years may not be the ones you think!
Of course, the amount of income and the form it comes in will play a large factor in your state choice. And when it comes to property tax, sales tax, pensions, and social security each state is as different as our mom’s homemade apple pie. We’ll look at each of these briefly one at a time.
So property tax. Not the greatest concern for the majority of us unless you own a large estate in upstate New York. However, homeowners living on a fixed income will want to pay attention to this category as well. Each state, each city has a different property tax it enacts. Property taxes are effected most by populations, location, and highway systems. So, do your research on this subject. There is too many factors and locations to cover each specifically in this instance.
Alright, that takes us to sales tax. There are actually 5 states that do not burden their citizens with a sales tax: Alaska, Delaware, Montana, New Hampshire and Oregon. Maybe not the most glamorous of places to retire. But if you are a bit of a spender and anxious to save a few bucks, these are the places to be.
Next, the dreaded pension income tax. As with the sales tax, there are a few states that have no pension income tax: Illinois, Mississippi, and Pennsylvania. New York offers tax free pensions to some but unfortunately not all. Time in the military will exempt you from taxes in even more states: Delaware, Georgia, Minnesota, New Mexico, Utah, Virginia and West Virginia. The no-no states are as follows: California, Connecticut, Nebraska, Rhode Island and Vermont. These states will kill your pensions with their taxes. STAY AWAY!
Finally, we come to social security. This is an issue that has covered the news for ages. How will the social security taxes be effected with the baby boomers nearing retirement? But this is the tax that is easiest to avoid. There are currently 27 states that offer relief on taxation of social security benefits. I won’t list them all here, but for more information (a lot more…) check out Social Security on Wikipedia.
So, weigh your options carefully. It may be in your best interest to avoid those staple retirement states and find a place that will keep you in comfortable, worry-free retirement for the rest of your life.
Tags: income tax, pension, property tax, retirement, sales tax, social security, where do i retire