Pensions: If you want to be able to count on your pension in retirement, then Alabama is a good retirement destination. If you’ve worked in the private sector, your pension is exempt from taxes in the Cotton State. In addition, military retirement pay and income will also not be taxed.
401(k)s and IRAs: Although Alabama offers certain advantages to retirees when it comes to taxes, not all retirement income is tax-exempt. The “Heart of Dixie” taxes 401(k)s and other defined-contribution retirement plans such as the traditional IRA as ordinary income.
Social Security Benefits: Alabama doesn’t levy any tax on Social Security benefits. That’s another advantage for retirees, apart from the warm climate and Southern hospitality.
Income Tax Range: When it comes to 401(k) funds, IRA distributions or any other ordinary income, the taxes range from 2% up to 5%, slightly below the national average. The lowest percentage is valid for up to $1,000 of taxable income for joint filers and up to $500 for all others and the highest is applied to more than $6,000 of taxable income for joint filers and over $3,000 of taxable income for the rest.
Pensions: Sure, Alaska is cold but if you can get over this fact, retiree life in the largest states in the United States can be quite fun. That’s because retirees in Alaska don’t have to pay income tax on their pension or on any other income. It’s one of the few states that doesn’t levy an income tax.
401(k)s and IRAs: 401(k) and IRA distributions are also tax-exempt.
Social Security Benefits: Alaska could be a much nicer place to retire than you think because it doesn’t tax Social Security benefits.
Income Tax Range: Not applicable since there is no income tax.
The next state will have the sun shine on your hard earned cash…..