Retire to these States with more Money

When you retire, there may be a significant decrease in income and the income may be fixed.This makes it  important to be in a state that is tax friendly to retirees. Federal taxes will be the same no matter what state you live in. The things that need to be considered, are the rate of state income tax accessed, local taxes, if there are any exemptions for retiree pensions and Social Security and the rate of sales tax in the state. All of these combine to make a state either friendly or unfriendly for retirees.

According to Kiplinger, the 10 most friendly states for retirees are Pennsylvania, South Carolina, Kentucky, Delaware, Wyoming, Mississippi, Alabama, Georgia, Louisiana and Oklahoma.

Alabama is one of the friendliest states for retirees. Its state sales taxes of 4%  is among the lowest in the country. One thing that isn’t friendly in Alabama is the fact that food is also taxed but the good news is, prescriptions aren’t and that is an important consideration for retirees. Homeowners are exempt from state property tax and most pensions and social security are not taxed. The state income tax ranges from 2-5%. Local municipalities may have their own property taxes so it is important to research before moving there but the fact that Alabama has no inheritance taxes is another feature that makes it a popular retirement choice.

The north is not known as a retiree friendly area for the most part. Pennsylvania is an exception. It has a 6% sales tax which is higher than Alabama but it also does not tax food, clothing, prescription and non-prescription drugs and fuel for heating. Social Security and pensions are also exempt from state income tax which is a flat rate of 3.07%. Property tax is determined on the local level and can be quite steep depending on the area. All in all, when living on a pension, Pennsylvania is quite a friendly place for retirees to choose.

Delaware has no sales tax which is a major bonus. State income tax is on the higher side however ranging between 2.2 and 6.95%. There are exemptions however and Social Security is one of them, there is also a $12,500 exemption for residents over 60 for pensions and investment income. There are additional tax credits that the retiree may qualify for. Real estate qualifies for a variety of taxes from municipal to school board. In Delaware, renting may be the best option for a retiree.

If you are looking for a quiet place where your money will go a long way in retirement, look no farther than Wyoming. Wyoming has no state income tax and the sales tax is a low 4%. Right off the bat you will have more money in your pocket. Retirement income is not taxed at all on the state or municipal level. What there will be is personal property tax and of course this can be avoided by renting but there are exemptions if you choose to own making this arguably the best state for retirees in the United States.

There are many things that make a place good for retirement, taxes is certainly one of them. These four states and the other six on the Kiplinger List are places that every senior should consider when it is time to retire.