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Which are the best states for retirees?
Why do some states focus on tax cuts for older adults?
So why do some states want to attract seniors and retirees?
- Seniors vote at significantly higher rates than other age groups in the U.S.
- As a group, older adults have a lot of buying power and don’t mind spending.
- Some policymakers believe seniors impose lower costs because they do not use services such as the public school system.
Which states provide the best bang for your buck tax-wise?
It’s important to do your research before deciding to move to a more tax-friendly state. Just because the government doesn’t tax your social security income, as is the case in 38 states, doesn’t mean these states are the most tax-friendly or the best states to retire. Some of these states have high property taxes and/or sales tax or high tax rates for 401(k)s or pensions. Kiplinger offers a State‐by‐State Guide to Taxes on Retirees which compares income tax, sales tax, property tax, and tax on retirement income in the different states. Using their analysis, they categorize the states and Washington D.C. as either “most tax‐friendly,” “tax‐friendly,” “mixed,” “not tax‐friendly,” and “least tax‐friendly.”
MOST TAX-FRIENDLY STATES
According to Kiplinger, the following states are the most tax-friendly in the U.S.
Moving to one of these states can help stretch your dollars in retirement. However, consider if these areas are places you would feel comfortable. Do they have the climate you desire? Or the religious community in which you would like to participate? Are you comfortable with the politics? How age-friendly are the specific areas you are considering? All of these factors are important to think about before making a decision.
LEAST TAX-FRIENDLY STATES
FIND MORE INFORMATION ABOUT WHAT MAKES THESE STATES LESS TAX-FRIENDLY HERE
The bottom line
If you are like many of us starting to think about where we want to retire, there are many factors to consider. It’s not all about the money, although taxes and affordability are important considerations that can impact your quality of life. Take advantage of the resources available to help make this important decision. And remember, if you do make a move and don’t like it, there is no reason it has to be forever.
Where are you thinking of living in retirement and why? Which do you think are the best states for retirees?