As of 2020, Social Security income or many other types of retirement income, for that matter, have become exempt from state income taxes. Similar to New Hampshire, retirees in the Volunteer State have to pay taxes only for income from dividends and interest.
The good news is that, unlike New Hampshire, Tennessee is planning on gradually eliminating that tax, also known as the Hall Tax. As part of the phase-out process, the tax dropped to 2 percent in 2019 and to 1 percent in 2020.
It might not have the friendliest weather, but Alaska outranks some warm-weather states when it comes to the best places to retire. Those who want to enjoy some peace and quiet can also add low taxes to the list of perks. As of 2020, Alaska has joined the group of sanctuary states with no personal income taxes.
If you’re considering ditching Florida for Alaska, head to the city of Anchorage, which has been included in the top 25 best cities in the United States to spend your golden years.
There are multiple reasons why Florida is our nation’s retirement Mecca. It’s not only the warm weather white sandy beaches, and luxury retirement that convince retirees to move there, but also the fact that is levies no personal income tax at all. This means retirees are not taxed for Social Security benefits, pension income, 401(k) plan withdrawals and IRA distributions, or any other type of income.
However, before you pack your belongings and head for Orlando, check out these 8 Things You Should Know Before Retiring to Florida
Nevada is a retiree-friendly state, not only because of its low cost of living, active senior communities and beautiful sceneries but also because it boasts some of the best tax benefits for retirees. As of 2020, the Battle Born State is one of the seven states that have no state income tax, making it the perfect destination for someone with a high income in retirement or a substantial 401(k). Did I mention Las Vegas?
If you’re planning on spending your retirement years in South Dakota, you won’t regret your decision. That’s because the Mount Rushmore State is one of the twelve states in the Midwest that levies no income tax. This means retirees get to keep their full Social Security benefits, but also pensions and other forms of retirement income.
See if South Dakota has also made it onto our list of 24 Cities Where Your Social Security Can Pay the Rent.
Are you familiar with the saying that “everything is bigger in Texas”? Well, when it comes to taxes, you can forget about it. The Lone Star State is among the states that don’t levy any personal income tax, which makes it a great place to spend your retirement. Add the warm weather and the low cost of living and you can start looking for places to rent in Dallas or Austin and live comfortably on a fixed budget.
Speaking of which, check out the Best Places in Every State to Live On a Fixed Income.
Another retiree-friendly place, when it comes to taxes, is Washington. People living in the Evergreen State don’t have to worry about having to pay any personal income tax. This includes retirees, who get to enjoy their Social Security benefits after long years of hard work, completely unbothered by Uncle Sam.
According to a list from Bankrate, Wyoming is the best state to be in as a retiree. As of 2020, the Equality State has eliminated the state’s income tax, which means Social Security benefits are yours alone to enjoy. Retirees can find a lot of things to spend their Social Security money in Wyoming, from engaging in outdoor activities to participating in all sorts of events organized by active senior communities.
In addition, Wyoming is also among the states with the 10 lowest real-estate property tax burdens in the nation; if you want to buy a house there, it’s cheaper than in many other parts of the United States.