When it comes to choosing a place to live, cost of living is top of mind for many retirees. But as you consider the usual expenses-housing, groceries, health care-don't overlook state taxes.
Depending on your situation, state and local taxes could cost you thousands of dollars more in one state than in another. That's particularly the case with property taxes: You could pay up to three times more in some states for a home with the same value. Some states exclude all or a significant portion of income from retirement savings, while others tax nearly all of your retirement income, including Social Security.
To help seniors avoid a state tax bombshell, Kiplinger has created a state-by-state guide to taxes on retirees (we also included Washington, D.C.). Our results are based on the estimated state and local tax burden in each state for two hypothetical retired couples with a mixture of income from wages, Social Security, traditional IRAS, Roth IRAS, private pensions, 401(k) plans, interest, dividends and capital gains. (For more on our methodology, see the box on page 60.)
We've included details on the 10 most-friendly and 10 least-friendly states for retiree taxes. For details on taxes in every state, including estate and inheritance taxes, go to kiplinger.com/kpf/retireetaxmap.
All of the states among the most tax-friendly for retirees exempt Social Security benefits from state income taxes. Most also allow an exemption for at least a portion of our hypothetical couples' other retirement income, such as private pensions or IRA withdrawals. They tend to have low property tax rates and/or reasonable sales tax rates, too.
MOST TAX-FRIENDLY
1. DELAWARE
State Income Tax Range: 2.2% (on taxable income from $2,001 to $5,000) to 6.6% (on taxable income over $60,000)
Average Combined State and Local Sales Tax Rate: 0%
この記事は Kiplinger's Personal Finance の March 2023 版に掲載されています。
7 日間の Magzter GOLD 無料トライアルを開始して、何千もの厳選されたプレミアム ストーリー、9,000 以上の雑誌や新聞にアクセスしてください。
すでに購読者です ? サインイン
この記事は Kiplinger's Personal Finance の March 2023 版に掲載されています。
7 日間の Magzter GOLD 無料トライアルを開始して、何千もの厳選されたプレミアム ストーリー、9,000 以上の雑誌や新聞にアクセスしてください。
すでに購読者です? サインイン
My Top 30 Index: An Update
A year ago, I put together what I called \"my own reinvention\" of the Dow Jones industrial average, the popular 142-year-old large-cap index.
Balance Your Risk and Reward
These new ETFs let you cut stock market losses. But you'll sacrifice some gains.
IS A HYBRID CAR RIGHT FOR YOU?
Hybrids offer a fuel-saving option for drivers who have reservations about all-electric vehicles. But there are trade-offs.
HOW TO REACH YOUR INVESTING GOALS
Patience helped these four investors make their portfolios work for them.
WHERE TO INVEST NOW
Expect a lot of midyear churn, with a rally toward the end of 2024.
TIPS FOR FINANCING A HOME PROJECT
I recently had a call with a client who was looking to fund the construction of a swimming pool at his house.
MORE WOMEN THAN EVER ARE STARTING BUSINESSES
Retail and travel businesses, along with health, beauty and fitness, are popular with women entrepreneurs.
Finding Home Health Care
It’s important to hire a caregiver you trust.
UNDERSTANDING BOND FUND YIELDS
What's a 30-day SEC yield? A trailing 12-month yield? A yield to maturity? We explain what each measure says about an income fund.
ANSWERS TO YOUR QUESTIONS ON STUDENT LOANS
If you have federal student loans, you may benefit from new government policies. Here's what you need to know.