Friday, June 8, 2012

The Ten Best States for Retirement

It's mostly about warm weather and avoiding the taxman, according to John Brady of Retirement.com:

#1 Tennessee--based on Brady’s analysis of such factors as taxes on all types of income (Tennessee taxes only interest and dividends), property taxes, climate, cost of living and senior health-care costs.

#2 Texas--There’s no income tax, the cost of living is low, and the climate is warm. Yes, property taxes are higher than others on TopRetirements.com’s top 10 list, but there are some protections for seniors, according to Brady.

#3 Louisiana--retirees don’t have to pay any state taxes on their pension income, the cost of living is low, and the climate is, as it is in most southern states, warm.

#4 Mississippi--Seniors don’t have to pay any taxes on their pension income, property taxes are the fourth lowest in the nation, the overall cost of living is low, and the climate is Sunbelt warm.

#5 Alabama--Alabama, which is one of the most tax-friendly states in the U.S. according to the Tax Foundation, tied with Texas, Louisiana, and Mississippi as the second best tax place to retire. As with Louisiana and Mississippi, retirees don’t have to pay any taxes on their pension income, the per capita property tax is the second lowest in the U.S., and the cost of living is low.

#6 Arkansas--Brady said Arkansas is mostly tax friendly: Federal, state and private pensions are not exempt, though there is a $6,000 exemption. Plus, Social Security benefits are exempt. And, the cost of living is the fourth lowest in the U.S.

#7 Florida--There’s no income tax. Plus, there’s good property tax protection for full-time residents against increases, Brady said.

#8 Oklahoma--According to Brady, the state does tax pension income. However, the overall property tax rate is low and the cost of living is third lowest in country. “People looking for a low-cost retirement by a lake might enjoy living in Lake Eufaula,” Brady reported.

#9 Georgia--Property taxes in Georgia are higher than other states on the top 10 list, but the state is phasing out state income tax on retirement income by 2016 and that (along with a low cost of living and warm weather)

#10 Nevada--It's a low-tax paradise, according to Brady. It has a no income tax. State sales tax is 6.5%. Total tax burden in Nevada is 49th in the U.S. The state ranks 29th highest for property tax collections. What’s more, Nevada does not have an estate or an inheritance tax.

(ViaMarketWatch)

3 comments:

  1. Texas - property taxes are reduced for seniors. You file an exemption and taxes are reduced by reducing the "value" of your homestead property by a locally set amount - typically around $15,000.

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    1. Home prices, once below national averages in major urban areas like Houston, Dallas, Austin, San Antonio are trending up negating many senior reductions. In Austin, many new fees are being imposed on everyone(maybe even plastic bag fees in 2013), and the profligate spending City Council is reaching into the pockets of all due to massive spending on schools, light rail, 'green projects', you name it! Further, auto traffic in the major Texas cities is a nightmare(Austin ranked no 8 in nation for traffic congestion). So retirees considering Texas may wish to look outside main urban areas, they should also determine if where they are moving could see growth leading to all too typical over reaching city council complex.

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  2. Just wanted to pass along the following information. After about a 10-day investigation while on vacation, my wife and I (with a special needs child)decided to retire to the northern coast of the Dominican Republic. The weather is great, the government is stable, the currency has been stable, and the people are wonderful.

    Additionally, because we are retired, we pay no income tax, just a 16% sales tax; we own our own home within walking distance of the ocean and because of a tax ruling several years ago, we pay no real estate tax. Of course, I continue to pay U.S. income taxes on my retirement income.

    Medical services are widely available and affordable, and I can walk onto the golf course at any time, any day and play - not necessary to make a tee time, no wait to tee off.

    Other things I love include the facts that I never have to worry about being ticketed when driving, there is no need to make reservations for dinner, and I can park on either side of the street. Because of the low cost of real estate, the absence of regulatory burdons, and low labor expenses, the costs of most necessary services are very low.

    We are both 72 years of age, and I can truthfully say these past near 10 years have been the happiest of my life. With each return visit to the U.S., I find myself very happy to return to the Dominican Republic.

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