Investment, Lifestyle, Property

5 Tax-Friendly States to Retire In

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There’s a lot to consider when choosing which state to retire in. One of the top objectives of retirees is to live in a tax-friendly state, in order to make the most of their savings. The state you choose to live in could make a difference of thousands of dollars in savings each year. The following five states offer outstanding tax benefits to retirees, as well as great locations, attractions, and desirable lifestyles. 

Florida 
Income tax: No 
Social Security tax: No 
Inheritance tax: No 
Estate tax: No 
Sales tax: Between 6% and 8% 

Warm weather, beautiful beaches, and abundant golf courses aren’t the only reasons Florida is one of the most popular retirement destinations in the United States. Florida has no income tax, estate tax, or inheritance tax. States with no income tax tend to hike up sales and property taxes, but Florida’s sales and property taxes are close to the national average. The average property tax rate in Florida is 1.10% and the state sales tax rate is 6% and can be as high as 8%. 

Nevada 
Income tax: No 
Social Security Tax: No 
Inheritance tax: No 
Estate tax: No 
Sales tax: Between 4.6% and 8.15% 

Baby boomers are attracted to Nevada for its year-round sunshine, outdoor recreational opportunities, casinos, golf courses, and low cost of living. The Silver State offers a slower-paced lifestyle and plenty of wide-open space for peace and quiet. Nevada not only has relaxed gambling laws, but also some of the best tax benefits for retirees. Property tax rates are low and there is no state income tax, estate tax, or inheritance tax. 

Texas 
Income tax: No 
Social Security tax: No 
Inheritance tax: No 
Estate tax: No 
Sales tax: Between 6.25% and 8.25% 

It’s said that everything is bigger in Texas, but this is not the case for income and Social Security taxes. In fact, there is no state income tax in Texas, so Social Security benefits, pension income, and all other types of retirement income are tax-free. If you’re looking to retire in Texas, you have a diverse selection of places to call home, including big cities like Dallas and Austin, small cultural towns like Georgetown, and the Gulf Coast towns of Galveston and Corpus Christi. The average property tax in Texas is 1.94% and sales tax averages 8%, but these can be compensated for by the retirement tax laws and low cost of living. 

Tennessee 
Income tax: No 
Social Security tax: No 
Inheritance tax: No 
Estate tax: No 
Sales tax: Between 7% and 9.75% 

Low cost of living, warm weather, and an abundance of recreational opportunities make the Volunteer State a good option for retirement. The scenic state is home to the Blue Ridge Mountains in the west and cultural hotspots like Nashville and Memphis. Tennessee does not tax any form of retirement income. This means no social security tax and no tax on income from retirement accounts. Property taxes are some of the lowest in the United States, but sales tax can be as high as 9.75% depending on local municipalities. 

Delaware 
Income tax: Yes 
Social Security tax: No 
Inheritance tax: No 
Estate tax: No 
Sales tax: None 

Delaware may not spring to mind when thinking of where to retire, but you should consider it if you’re looking to reduce your tax burden. The tiny state offers beautiful Atlantic beaches and easy access to major cities including Philadelphia, Baltimore, Washington D.C., and New York. Despite having a state income tax, Delaware does not tax Social Security income. Aside from no inheritance, estate, or Social Security tax, there is no sales tax at the state or local level. Delaware also has the fourth lowest property tax rates of any state, at an average of 0.51%.

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