5 States That are Friendly to Retirees

Retirement

5 States That are Friendly to Retirees

Posted by Infinite Wealth Advisors, LLC
2 weeks ago | January 16, 2023

Once you retire, you will no longer be tied to a particular location due to your job. Many of us choose a new location for retirement, based upon proximity to family, climate, lifestyle, and other factors that are important to us.

Have you considered taxes? Once you’ve transitioned to your retirement income, taxes can have a significant impact on your budget. And so, before choosing a location for your retirement years, evaluation of that state’s tax structure would be a wise idea. The following five states are known to be very friendly to retirees for that exact reason.

Alaska. With no state income tax, estate tax, or inheritance tax, Alaska provides a lot of incentives to retirees. The sales tax rate is 1.76 percent, helping your money to stretch farther. Plus, the gas tax is the lowest in the country (at 1.9 cents per gallon) and all state residents receive oil dividend checks each year.

Since Alaska does have slightly higher-than-average property tax rates, you should definitely choose your location and housing carefully.

Delaware. Delaware has become a popular location for retirees because they can exclude $12,500 of retirement income from state income taxes. Social Security income isn’t taxed at all, and you won’t pay sales taxes or vehicle tax. With property taxes at the sixth lowest levels in the nation, you have considerable leeway in choosing housing.

The gas tax is slightly higher than other states on this list, at 22 cents per gallon. But how much that impacts you individually is dependent upon how much you plan to drive.

Wyoming. In Wyoming, residents don’t pay any state income tax, estate tax, or inheritance tax. Property and sales taxes are some of the lowest in the nation, and groceries and prescription medications aren’t taxed at all. Still, you might not want to live too far from the grocery store, because gas tax is 24 cents per gallon in Wyoming.

Florida. Many people already think “retirement” when they hear the word “Florida”. But aside from the plentiful sunshine and mild climate, Florida offers a tax haven to retirees. You won’t pay estate tax, inheritance tax, or income tax. The state sales tax rate is higher, at 7 percent, but groceries and prescriptions aren’t subject to it.

New Hampshire. If you don’t mind some winter weather, New Hampshire is the North’s answer to Florida’s retirement haven status. Residents don’t pay income tax, estate tax, inheritance tax, or sales tax. But the property taxes are somewhat higher in New Hampshire, at 1.86 percent, so you might wish to research which towns tend to offer lower real estate values.

As with any retirement decision, numerous factors should be considered before you make a move. Let’s discuss your ideal retirement location at our next appointment, and we can help you estimate the potential impact upon your budget.

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