There is one crucial question when planning for retirement, “Where do I want to live?” So many variables should be taken into consideration with this kind of question. “Do I move near family? Head to a warmer climate? Stay put? What about the quality of healthcare where I’m planning to retire, or the cost of living?”
Let’s examine a few of the most and least attractive states to retire in, purely from a tax perspective.
The 7 States Without Individual Income Tax – Which Is Best?
To separate these seven states without income tax, we analyzed different tax factors: sales, property, and estate tax rates. The results start with the most attractive state. Though Wyoming’s stunning mountains are #1, you can see why warm and sunny Florida is a huge magnetic draw for retirees!
The 10 Highest Taxed States – Should I Consider Any Of These?
To find the highest taxed states, we evaluated the tax rates for state income, sales, property, and estate tax rates. Here’s something interesting we found: the majority of states listed below also have their own estate tax. In addition, the property and sales tax rates are comparable to those states listed above that have no income tax.
As such, ranked from best to worst, here are the 10 states with the highest individual income tax. California may be last on the list, but it’s hard to deny its range of climates.
State and local taxes, as well as property taxes, are becoming ever more important to take into account when planning for retirement. Both proposed tax bills that passed the House and Senate eliminated the state and local tax deduction for individuals. If the proposed bill is signed into law, there will be no better time to evaluate decisions regarding where to live now, and where to live during retirement.
Please contact us if you would like a state analysis completed to assist you in your retirement planning. We will be more than happy to run a tax projection for you, and discuss the states that will benefit you the most.
Please visit our Tax Services Page for more information.
Resources: TheTaxBook, state instruction booklets, and average property tax rates
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