Posts Tagged ‘best retirement states’
Although it is obvious that many seniors prefer the warm climate and leisure activities of retirement states such as Florida and Texas, they are not necessarily the best where income is concerned. Many retirees judge the suitability of a state based simply on whether or not it has an income tax. This is an oversimplified way to judge the tax burden of a state, and can lead to paying very high amounts each year in taxes. In fact, some of the best retirement states that have no income tax more than make up for it in other forms of tax.
Retirees want to save as much of their money each year as possible, and so many look to states like Pennsylvania that do not charge anything on retirement income. Although this is an understandable reaction, failure to do some research can cost these seniors a great deal of money. Perversely, Pennsylvania is actually one of the most expensive places in the United States to live. The average property tax in Harrisburg, PA, amounted to an unbelievable $6,551. Combine that with $840 on average in sales tax, and Pennsylvania residents are actually paying approximately $7,391 in taxes per year.
Surprisingly, in the search for the best retirement states, states like Arkansas and Delaware are actually the most cost effective for seniors. Living in Dover, DE, costs on average around $543 per year in taxes. Kentucky is another affordable state for seniors, with residents of Frankfort paying around $1,114 per year. This is much less than supposedly tax friendly states such as Pennsylvania and Florida. Residents of Florida pay around $3,424 per year.
Although income tax is a major component of overall tax burden, it is very important to take other factors into account. Be sure to research the cost of homes, as well as general cost of living. In areas with high home prices, property tax can really end up costing an arm and a leg each year. Avoid paying too much by researching retirement state tax laws before making a move. The general livability of a state is also important.
Resources such as Kiplinger and Taxsites.com can help greatly in the search for the best retirement state. Finding the best retirement states is all about striking a balance between taxes and livability. Just because a state has the lowest taxes doesn’t mean you should live there, but don’t neglect to check out a state’s tax laws before moving. Some states, such as Pennsylvania, can make your retirement dream unaffordable if you are not careful.
The majority of seniors prefer the warm climate and leisure activities of states such as Florida and Texas, they are not necessarily the best where income is concerned. Many retirees judge the suitability of a state based on an oversimplified view of the state tax laws. This is an oversimplified way to judge the tax burden of a state, and can lead to paying very high amounts each year in taxes. In fact, some of the best retirement states that have no income tax more than make up for it in other forms of tax.
Retirees naturally seek to preserve as much of their money each year as possible, and many are drawn to states like Pennsylvania that do not charge anything on retirement income. Despite the allure of no income tax, failure to look closer can cost these seniors dearly every year. Ironically, Pennsylvania is actually one of the least affordable places in the United States to live. The average property tax in Harrisburg, PA, amounted to an unbelievable $6,551. Combine that with $840 on average in sales tax, and Pennsylvania residents are typically paying approximately $7,391 in taxes per year.
Surprisingly, in the search for the best retirement states, states like Arkansas and Delaware are actually the most cost effective for seniors. Living in Dover, DE, costs on average around $543 per year in taxes. Kentucky is another affordable state for seniors, with residents of Frankfort paying around $1,114 per year. This is much less than supposedly tax friendly states such as Pennsylvania and Florida. Residents of Florida pay around $3,424 per year.
Although income tax is a major component of overall tax burden, it is very important to take other factors into account. Be sure to research the cost of homes, as well as general cost of living. In areas with high home prices, property tax can really end up costing an arm and a leg each year. Avoid paying too much by researching retirement state tax laws before making a move. The general livability of a state is also important.
Resources such as Kiplinger and Taxsites.com can help greatly in the search for the best retirement state. Finding the best retirement states is all about striking a balance between taxes and livability. Just because a state has the lowest taxes doesn’t mean you should live there, but don’t neglect to check out a state’s tax laws before moving. Some states, such as Pennsylvania, can quickly eat away at your retirement fund if you are not careful.