Before considering some states to retire, you need to look at several parameters to arrive at some conclusion. The current article provides information about some states that can be considered for living after retirement as well as the factors essential for making a wise choice.
Finally, retirement is around the corner and it’s time for planning a rocking retirement party! The constraints of long office hours will be no more, and the burgeoning stress will be non-existent! Moreover, there will be no encounters with the boss! You can sunbathe on a working day, and enjoy leisure moments.
Retirement years may impose some financial limitations on you hence, you must consider the appropriate states to retire peacefully. However, finding a retirement friendly state can turn out to be a very technical and mathematical task, if you start calculating every minute details about tax laws and exemption rules of every state. But then you cannot simply begin to live in a state without any research or prior knowledge. Some of the parameters to be considered are as follows:
- Social security policies
- State’s economy
- Cost of living
- Taxation rules
- Crime rates
- Healthcare system
- Recreational opportunities
- Susceptibility to natural disasters
- Political and social environment
The taxes to be considered while evaluating a state include tax on pension income, social security tax, sales tax and property tax. Certainly, no state will stand out as the best in every factor mentioned here. What you should be looking for in a state totally depends on your priorities. Short list at least five factors that you do not want to compromise on, and then you will be able to narrow down your options. Some of the options have been described below.
In addition to a moderate climate and natural attractions, Tennessee also serves to be a financially favorable state. As per the Council for Community and Economic Research, it has the second-lowest cost of living (lowest is in Alaska). Although the pension income is not taxed, other retirement incomes are taxed with certain exemptions. Nevertheless, this state has the third-lowest local tax burden in US.
A small and a very beautiful city to live in the US is Pittsburgh. It has always been rated among the finest places to retire in US. The low cost of housing and less state tax burden are just some of the reasons for Pittsburgh being the favorite location of retirees. With best healthcare facilities and efficient public transportation system, Pennsylvania is a place that must be considered by retirees. Moreover, some nationwide popular universities make this place an ideal hub for a peaceful ambiance.
A humid subtropical climate as well as a favorable tax climate enables this state to qualify as one of the options for retirees. The pension is not tax-free except for those who were employed in government agencies and military services. However, the local tax burden in this state is not just below the national average but is the fourth-lowest in the nation. In addition, the property taxes ranked to be the eighth-lowest in the nation.
It is one of the states that does not levy personal income tax, and the local tax burden is the second-lowest in US (lowest being Alaska). Known as the Mount Rushmore state, it is an ideal place for recreational activities like fishing and pheasant hunting. However, the state has a continental climate and is cooler than the other states.
Owing to its unique geography, Texas is a home for anyone having an interest for arts as well as travel. From coastal beaches, rolling hills and forests to mountains, Texas offers older people one of the most relaxing environment in the US. Added to these are various tax benefits given to retirees. Low cost of living, plenty of spacious grounds and small beautiful towns make it an ideal place to spend your retirement period.
Located in the southwestern region of US, Arizona has become increasingly popular among retirees. There is no state property tax, and the tax jurisdictions decide the tax rates for the respective areas. In addition, the retirees are exempt from paying the social security tax. Most of the retirees here have formed retirement communities and organize various recreational activities among themselves.
Florida’s warm climate is certainly one of the most favorable factors for the elderly. They can escape the brunt of harsh winters or hot summers, and can rest in a balanced climate. Moreover, those who are residents of Florida do not have to pay state income tax. Affordable and efficient medical facilities are evenly distributed throughout Florida.
In addition to these, other considerable options include North Dakota, Nebraska, Kentucky, Mississippi, Virginia, West Virginia and Alabama. Various sources will list out different names as the best tax havens as far as the elderly are concerned. However, the key to choosing the right one for you, is to clearly identify your preferences and priorities in addition to the financial aspects.
Disclaimer: The information provided in this WealthHow article is for informative purposes only, and should not be substituted for the advice of an appropriate professional.