Retirement planning isn’t just about saving—it’s also about stretching those savings. Where can you maximize your retirement funds by minimizing your tax burden? Which states offer the best tax advantages for retirees?
1. Wyoming
Wyoming tops many lists for retiree tax friendliness. There’s no state income tax, and retirees benefit from low property taxes and no taxes on Social Security benefits or other retirement income.
2. Alaska
Alaska offers no state income or sales tax, plus residents receive annual dividends from the Permanent Fund. While the cost of living can be higher, the tax savings are substantial.
3. South Dakota
South Dakota is attractive to retirees for its lack of income tax and competitive sales and property tax rates. Plus, Social Security income and pensions are not taxed.
4. Florida
Florida remains a popular retirement destination, not just for its climate but also for its tax benefits. There’s no state income tax, and Social Security benefits, pensions, and other retirement income are not taxed.
5. Nevada
Nevada offers no state income tax and no taxes on Social Security or retirement income. While sales taxes can be high, the overall tax burden for retirees is low.
6. New Hampshire
New Hampshire does not tax earned income or retirement income. It does, however, tax dividends and interest, which could affect those with significant investment income.
7. Pennsylvania
Pennsylvania is unique among states because it does not tax Social Security benefits or public pensions. However, retirees should consider local taxes, which can vary significantly.
8. Tennessee
Tennessee has no state income tax and offers exemption for all Social Security income and most other sources of retirement income, which will be entirely tax-free starting in 2021.
9. Texas
Like Florida and Nevada, Texas does not have a state income tax. It does not tax Social Security or retirement income either, though property taxes can be relatively high.
10. Washington
Washington state has no income tax, which includes no taxes on Social Security or retirement income. However, the sales tax rate is one of the highest in the country.
11. South Carolina
South Carolina offers generous retirement income exclusions from state income tax and provides a significant deduction for anyone over 65, plus no taxes on Social Security.
12. Mississippi
Mississippi exempts all Social Security income, pensions, and other retirement income from state income taxes, making it an attractive option for retirees.
13. Alabama
Alabama does not tax Social Security benefits and offers a full exemption on pensions from state income tax for retirees, along with relatively low property taxes.
14. Kentucky
Kentucky does not tax Social Security income and allows a significant deduction on other retirement income. Its property taxes are also among the lowest in the nation.
15. Louisiana
Louisiana offers a retirement-friendly tax structure with no taxes on Social Security benefits and generous exemptions on other retirement income.
16. Arizona
Arizona has relatively low property taxes and does not tax Social Security income. It offers deductions on other retirement incomes, making it favorable for retirees.
17. Georgia
Georgia provides a full exemption on Social Security income and offers a generous deduction on other types of retirement income for people over 65.
18. Delaware
Delaware does not tax Social Security benefits and offers low property taxes and a high exemption on retirement income from pensions.
Plan Your Retirement Wisely
Selecting a retirement location is a pivotal decision that impacts your financial health. These states offer favorable tax conditions that can help your retirement savings last longer. Careful planning can ensure you enjoy your retirement years with financial peace of mind.
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The post 18 States Offering the Lowest Taxes for Retirees first appeared on Not Your Boss Babe.
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
For transparency, this content was partly developed with AI assistance and carefully curated by an experienced editor to be informative and ensure accuracy.
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