After working for nearly all their lives, most people look forward to a peaceful and hassle-free retirement. The lack of deadlines and work pressures does make things easy for retirees, but the flip side of a retired life is that the income reduces drastically. Also, if the state where you have retired to has unfriendly tax laws, then your savings will be further impacted. Hence, it is best to move to states that have the lowest taxes for retirees. The following are the states that have the lowest retirement tax burden.
- Alaska: Irrespective of the warm weather that most retirees comprehensively consider a strong parameter while retiring, one of the major indicators for individuals to move to this state is the lenient tax policies. An exemption from retirement income tax is an additional impetus with over 24 of the 164 municipalities levying a property tax, which makes Alaska a fairly good choice for retirees. Also, there is an additional provision of no or low sales tax along with the rule that residents older than the age of 65 amongst the 24 communities mentioned above are exempted from property-based taxes as well, based on their home’s assessed monetary value after a fixed slab. Hence, Alaska is a definite pick for retirees.
- Nevada: Away from the glamour of its other counterparts, Nevada is known for the city’s quieter suburbs and tranquility. With the state’s tax burden rated as the second lowest in the country, the best benefits that one can accrue from Nevada is its no income or inheritance tax as the cost of the living is comparatively very less as compared to the neighboring states. Also, the housing market hasn’t rebounded from the 2008 housing bubble crisis, which means that buyers can get great deals in the housing sector.
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- Washington: With its beautiful landscapes and strategic location, Washington has no income tax. With high sales tax rate and a median home value of $270,400, one of the best benefits that Washington has to offer to retirees is its additional property tax exemptions.
- Wyoming: Ranking as the top-most state in the Tax Foundation’s 2015 Business Tax Climate Index due to no tax on personal or corporate income, low property tax, and a low sales tax of 4%, Wyoming is one of the best states for retirees in terms of low taxes. With a lesser cost of living along with no excise tax, Wyoming is one of the most ideal places for retirees.
- Texas: Also known as the Lone Star state, Texas boasts of no tax on personal income. With the sales and use tax on high-end goods at an approximate percentage of 8.25, Texas has property rates that vary by county. Also, the median home prices are at $159,000 on an overall basis. One of the best elements is that people who are 65 years and older qualify for a homestead exemption of $10,000 for school taxes along with a sturdy exemption of $15,000 for homeowners.
- South Dakota: The mid-western state of South Dakota has the most favorable tax structure in the country. With no tax levied on retirement income, inheritances, and estates, South Dakota has relatively lower sales tax pegged at 4%. With the median home price at $126,000, South Dakota is one of the good options that retirees have.
- Florida: Florida has mixed advantages with no retirement income tax but extensive property tax burdens. Despite ranking 23rd out of 50 in terms of the highest property tax rates, Florida has a special policy for residents 65 years and older who qualify for a $50,000 property tax exemption on their properties. It is a decent place overall for retirees.
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