INDONESIAKININEWS.COM - A comfortable retirement is a lifelong goal common to people of almost any age, in any profession, and from every s...
But that isn’t to say retirement has equal value across state lines. Taxes, cost of living, and even climate give certain states an upper hand when it comes to retirement; the same income and investments can have much different values in different parts of the country. Today, we’re ranking the top states that can be ideal for retirement.
Before making any plans, we recommend speaking with a financial advisor, who can help you find the state that makes the most sense for your financial situation. Our free quiz can match you with up to three fiduciary advisors in just a few minutes, each obligated to work in your best interest.
The value of working with a financial advisor varies by person and advisors are legally prohibited from promising returns. However, research suggests people who work with a financial advisor feel more at ease about their finances and could end up with about 15% more money to spend in retirement.1
Best States for Minimizing Taxes in Retirement
If shrinking your tax liability is high on your list of priorities, a few states stand out. The winners on our list below either have no state income tax, no tax on retirement income, or a substantial discount on the taxes levied on retirement income. But that’s just the start.
While several additional states have no state income tax, the states that made our list also have favorable sales, property, inheritance, and estate taxes.
- Alaska
- Florida
- Georgia
- Mississippi
- Nevada
- South Dakota
- Wyoming
If those seven locations aren’t ideal, consider the next tier of tax-friendly states. Tax benefits aren’t quite as high as those above, but they do stand out in one specific category: no taxes on social security income.
That’s not to say they don’t make up for it in other areas, however. Washington State, for example, has no state income tax, but does have a 6.5% state sales tax. Still, it’s always beneficial to avoid income tax when possible.
- Alabama
- Arkansas
- Colorado
- Delaware
- Idaho
- Illinois
- Kentucky
- Louisiana
- Michigan
- New Hampshire
- Oklahoma
- Pennsylvania
- South Carolina
- Tennessee
- Texas
- Virginia
- Washington
- West Virginia
Top States Favored by Retirees
While Alaska may have favorable tax policies, lounging in Anchorage may not be your idea of a relaxing retirement. To uncover where retirees actually want to live, let’s dive into another set of numbers.
According to the Federal Interagency Forum on Aging Statistics, six states are the standout favorites among the over-65 crowd.2 No other states surpass their density of residents over the age of 65:
- Maine (20.6%)
- Florida (20.5%)
- West Virginia (19.9%)
- Vermont (19.4%)
- Montana (18.7%)
- Delaware (18.7%)
Best Overall State for Retiring
Now, let’s compare. By cross-referencing our list of “Best States for Minimizing Taxes in Retirement” with our list of states most densely populated with retirees, we find that only one state makes both lists.
The Sunshine State offers favorable taxes, pleasant climate, and reasonable cost of living.
The Bottom Line
Wherever your retirement dreams take you, it’s important to keep the above in mind and make the right decision for your financial situation.
A fiduciary financial advisor can help you consider not only the tax implications of a move, but also other factors specific to your situation.
Not sure where to start? We created a free quiz to help Americans find vetted, qualified financial advisors who serve their area.
This quiz asks you a few questions, then matches you with up to three fiduciary financial advisors. You even earn a free consultation with each of your matches, so you can compare them and be fully prepared to pick a financial advisor.
S: smartasset
