When it is retirement planning time, there are many factors you will need to consider. In addition to weather, proximity to family, and health care access, the amount of income or savings that you will have for retirement is first and foremost.
This is most likely the highest priority on retirees’ minds when thinking about how, when, and where to retire. Besides a low to moderate cost of living, one of the best ways to maximize retirement dollars is to live in a state that has beneficial tax policies towards those dollars.
So, here is a list of three states that are some of the most tax-friendly.
Wyoming
If you would like to live in a state with wide-open spaces and have a love for outdoor adventure living, Wyoming has many benefits along with being retirement tax-friendly.
For starters, there isn’t an income tax on seniors and there are no inheritance and estate taxes. The sales tax averages 5.34% for state and local taxes.
Additionally, the median property tax rate is $575 per $100,000 per year. Eligible seniors can also get a payment delay of up to 50% for hardship cases.
Combined with a relatively moderate cost of living makes Wyoming an excellent place to retire.
Nevada
In Nevada, you won’t have to risk your retirement savings because it is one of the best for tax savings.
It’s one of the few states that don’t have an income tax. Because there isn’t an income tax, it doesn’t tax Social Security, pensions, 401(k)s, or IRAs.
There aren’t any inheritance or estate taxes, either. There is a sales tax with a state base rate of 6.85%. And, similar to Wyoming, the property tax rate is low at $533 per $100,000 home value, which is the fourth-lowest median property tax rate in the nation.
Florida
Because of the weather and tourist attractions, Florida is one of the best states to live in as a retiree. If you aren’t convinced just ask any one of the 6.4 million seniors 65 years and older that live in the state.
And, each year the state is consistently the second-most moved to state in the country. It’s no wonder because there isn’t an income tax, which means there are no inheritance or estate taxes.
Also, it means that Social Security benefits, 401(k)s, and IRAs distributions are tax-free. There is a sales tax.
The property tax rate is higher than the other states mentioned at $833 per $100,000. Real estate prices are much higher in southern Florida increasing the overall housing cost.
But if you stay to the Gulf Coast and north of Palm Beach County on the Atlantic side, you can definitely benefit from everything that Florida has to offer seniors.
