The best state to retire in. First, you must question what is your primary driving force? I cannot say where the best fishing, mountain climbing, boating can be found, as that is your personal choice. If you love your state, then stay where you are. But, if the questions boil down to economy, cost of living and specifically taxes, then we can offer some advice.
We are not going to eliminate your federal income tax, but saving while in retirement is important and consider moving to a state with no income tax can be a huge saving. For retirees, that can mean no state tax on Social Security benefits, pensions and other sources of retirement income.
Let’s first look at the 10 highest state income states:
- California (13.30%)
- Hawaii (11.00%)
- New Jersey (10.75%)
- Oregon (9.90%)
- Minnesota (9.85%)
- New York (8.82%)
- Vermont (8.75%)
- Iowa (8.53%)
Nine states are State Income Tax Free:
- Alaska,
- Florida,
- Nevada,
- New Hampshire,
- South Dakota,
- Tennessee,
- Texas,
- Washington
- and Wyoming
- New Hampshire, however, taxes interest and dividends, according to the Tax Foundation. It has passed legislation to begin phasing out that tax starting in 2024 and ending in 2027.
Here, in the State of Washington, many out of stater’s come here, because it is state income tax free, like to settle in Vancouver WA. Why? Because we border Oregon which does have a state income tax but does not have a state sales tax. So, live without the state income tax, and shop big ticket items with no sales tax! Ah, life is good.
