When planning for retirement, deciding upon an ideal place to retire requires research of many factors, including which states have the lowest taxes. Since you have paid your fair share to Uncle Sam all during your financially productive years; you may feel understandably justified in not wanting your retirement income, which could potentially be somewhat limited, to be eaten away by taxes.
Federal taxes are going to be the same wherever you live, but state and local taxes might vary considerably. Another consideration is the source of your retirement income. Many states exempt government and military pensions, social security benefits and sometimes even income from private pension plans.
A much greater tax concern for retirees to consider might be property tax and state and local sales taxes, which can fluctuate from city to city and county to county within a given state.
Taking all of the above factors into consideration, Kiplinger.com has published a list to be perused for retirement planning purposes.
10 most tax-friendly states for retirees:
The five states with no sales taxes:
The five states with most amenable real estate taxes:
States with no income taxes:
Of course, taxes are not the only factor to consider when choosing a place for comfortable retirement. Moneyrates.com, an organization whose primary purpose is to advise people (retirees) where to find the best bank rates, compiled a list of their own of the best and worst places to retire in the U.S.
Their list incorporated the following factors:
– Cost of living
– Level of tax burden
– Level of violence and crime
– Life expectancy
When planning for retirement, it would seem prudent to combine financial factors, health, safety and climate considerations before zeroing in on a particular place to live. Take note that the five states with no taxes are also some of the coldest climates, which might not be amenable for some retirees.
If you are planning for retirement, have no pressing reason to remain where you are presently located, such as proximity to family, and are seeking a more ideal location, the Kiplinger list of states with lowest taxes might be helpful for choosing an ideal location, enabling you to make the most of your retirement years.