Top 10 Tax-Friendly States For Seniors & Retirees
Over 10,000 Baby Boomers turn 65 every day in the United States alone. Of course, as many Boomers celebrate this milestone birthday, they’re probably thinking about retirement. Specifically, where are they going to live once they clock out of their job for the last time ever? If you’re a Boomer who’s been asking yourself that very question, you’re in the right place! Here are the top 10 tax-friendly states for seniors and retirees.
1. Alaska
Known as The Last Frontier, this sprawling state might be the best place for seniors and retirees to settle once they reach their golden years. Not only is there no state sales tax, but Social Security income isn’t taxed, either. And that’s not all! Public and private pension income also isn’t taxed. How’s that for a sweet deal?
2. Delaware
Delaware is a perennially popular retirement destination, and it’s not difficult to see why! This small state is full of New England charm: sandy beaches, snowy winters, idyllic small towns. Of course, it’s idyllic for another reason, too. Delaware boasts no state sales tax and even allows for up to a $12,500 deduction for income from pensions. Oh, and did we mention there are no taxes on Social Security income?
3. Wyoming
If you’re looking for a state that’s both beautiful and tax-friendly, then look no further than Wyoming. For one thing, Wyoming’s cost of living is relatively low compared to some other states on this list. For another, there are no state income taxes, and pensions are tax-free, as well (according to SmartAsset).
4. Florida
It’s almost become a cliché at this point: older adults settling in Florida after they retire. However, there actually might be something to this! First, there’s the weather to take into consideration. If you’re somebody who loves the heat and hates snow, you’ll be right at home in the Sunshine State. Also, it’s tax-friendly! No state income tax, no estate tax, and no inheritance tax. Now, that’s a good deal.
Read Next: 11 Best Cities In Florida For Retirement
5. Nevada
Sure, Nevada is a great place to catch a show or walk the Vegas Strip, but did you know it’s also a wonderful state for retirees? Like many others on this list, it does not have state income tax, nor is Social Security taxed (according to SmartAsset). And, in addition to Las Vegas, this state also boasts a number of state parks and historic sites that’ll make living here a treat!
6. South Carolina
If you like sandy beaches and warm weather, then we’ve got good news for you. South Carolina happens to be one of the most tax-friendly states for retirees! Not only does South Carolina have one of the lowest property tax rates in the United States, but Social Security income isn’t taxed, either!
7. Arizona
Are you a fan of dry heat? Want to live in a state rich in history and culture? Oh, and a state that’s also incredibly tax-friendly? Then you might want to start looking at real estate in Arizona! First, Social Security income is not taxed, and public and private income is only partially taxed. However, it’s important to note that, unlike some other entries on this list, withdrawals from retirement accounts are fully taxed.
8. Idaho
Guess what? Social Security income is not taxed in the state of Idaho! However, it’s important to note that public and private income are partially taxed (according to SmartAsset). And, much like Arizona, withdrawals from retirement accounts are fully taxed.
9. Tennessee
Known as the Volunteer State, Tennessee is home to picturesque mountains, enchanting forestland, and tourist attractions like no other! Of course, it also happens to be tax-friendly! Your Social Security income is not taxed. Additionally, withdrawals from retirement accounts aren’t taxed, either! Plus, the cost of living in this great state is 10 percent lower than the national average.
10. Hawaii
When people think dream retirement, Hawaii might be the venue that comes to mind. The good news is that if your fantasy retirement includes sunbathing on the gorgeous beaches of Hawaii, you might be happy to learn that this state is tax-friendly! In fact, Social Security income isn’t taxed at all. Also, public pension income isn’t taxed, either.
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Originally published December 04, 2023
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