The Internet abounds with lists of the best communities and states in which to retire. Many of them, from the likes of BankRate and Forbes, take a holistic view, including local weather, crime rates, and access to health care, as well as cost of living and tax burden as factors to consider. (See article: How The Cost of Living Affects Your Income.) Certainly, quality of life matters in retirement. But if you just want the cold, hard bottom line on taxes in a state-by-state guide, consider Kiplinger's "Where to Retire" tax map. (For related reading, see: Retirement Planning: How Much Will I Need?)
We believe no one should move to a state simply for its low tax bill. But if you are already considering a move after retiring, taxes should be part of your thought process as you decide where you should spend your retirement years.
The good news is there are certainly plenty of states vying for the tax-friendliest honor: Currently, nine states have no income tax, five have no sales tax, and the majority don't have social security tax and estate tax. Alaska wins the lowest-cost designation, in Kiplinger's view of where to retire. Most of the rest of Kiplinger's top 10 great places to retire are in the Southeast—Georgia, Mississippi, Louisiana, South Carolina and Florida, or out West—Wyoming, Arizona and Nevada. Delaware rounds out the top 10. Although it has no sales tax, it is the only state on the list that levies an estate tax.
Not surprisingly, the Northeast—generally seen as the most expensive part of the country—figures prominently in the list of least-friendly places to retire. Vermont, Connecticut, New Jersey and New York all make the list.
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