One cannot escape taxes even after one retires. But there are certain states that are more tax-friendly than others. And for the individuals who are going to retire and live on a fixed income, these tax-friendly states can be a better choice. So that they can comfortably spend their money as well as enjoy their golden retirement years in peace. This list examines the best states for retirement in terms of taxes and takes into account the three types of taxes, i.e. income tax, sales tax and property tax.
With no individual or corporate income tax, Wyoming has low excise and sales taxes of 4.65% and property taxes of 0.61% (one of the lowest in the country). Which is why Wyoming is so popular amongst retiring individuals. But low taxes doesn’t mean, mediocre state services, Wyoming is equally known for its top-notch approach towards public welfare.
Alaska actually pays its residents – the Permanent Fund Dividend of Alaska distributes an annual payment to each legal citizen, which pays an Alaskan around an $1000 on an average, every year. The state doesn’t have income tax, its average sales and excise tax is a merely around 1.65% and the property tax is 1.18%.
South Dakota levies income tax in the state, and has a property tax of 1.32% with low sales tax rates (sales tax is applicable to non-prescription drugs and food, effectively raising it to 5.,37%). The state is renowned for its quality services in sectors like infrastructure such as real estate and transport. It also known for a great healthcare system.
Although NH doesn’t charge income tax and has low effective excise and sales taxes of 1.65%, it has high property taxes of 2.15% (one of the highest in the country). It also taxes interest and dividend incomes at 5%. However, New Hampshire has a brilliant safety services.
North Dakota does have income tax between 1.1%-2.9%, making it the nation’s lowest, with property taxes of 1.1% and effective excise and sales taxes of 5.58%.
Sunny Florida is not just an ideal destination for vacation but also a great tax friendly option for retirees. It has a property tax of 1.06% and no income tax. On the other hand the effective sales and excise taxes range around 5.45%.
No income tax (personal or corporation), with 1.09% on property tax, Washington the highest effective excise and sales tax is around 8.16%. This makes Washington a great option for retiring individuals who have a higher spending capability.