If you live in Kentucky, you’ll be pleased to find out that once you retire and start receiving Social Security benefits, you’ll not be required to pay any Social Security income taxes. Other forms of income in retirement such as pension or401K are, however, subject to taxation if they exceed the total of $31,110 per person.
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With a stable state tax and no taxes on Social Security income, life as a retiree in Maine doesn’t seem bad at all. The Pine Tree State does have a progressive personal income tax varying between 5.8% to 7.15%, depending on one’s income.
Maryland is moderately tax-friendly toward retirees. The Old Line State levies personal income tax rates ranging from 2% to 5.75%, but the Social Security benefits are exempt from income tax. However, before you hop in your car and move to Maryland, you should know it is the only state in the country with an inheritance tax and an estate tax.