Retirement means relaxing and not having to worry about money: that is, if you’ve retired to a state that isn’t out to take all your earnings.
Kiplinger looked at the Top 10 states with the best tax rates for retirees. These tax-friendly states aren’t looking for a chunk of your retirement savings, in other words.
Here we have compiled the top 5 best states to retire to with low taxes.
#5 State to Retire to With Low Taxes: Mississippi
State Income Tax: 3% to 5%
Estate Tax/Inheritance Tax: No/No
With prescription drugs and health care services exempt from state taxes, Mississippi is one southern state that should be on your radar. With low rates on property taxes as well, the Magnolia State gives retirees a reason to smile.
#4 State to Retire to With Low Taxes: Arizona
State Income Tax: 2.59% to 4.54%
Estate Tax/Inheritance Tax: No/No
A favorite for retirees already, Arizona ranks high with a low state income tax and no taxes on prescription drugs. With the warm weather and dry air, this sunny favorite is calling your name.
#3 State to Retire to With Low Taxes: Georgia
State Income Tax: 1% to 6%
Estate Tax/Inheritance Tax: No/No
As Kiplinger notes, “are 65 and older can exclude up to $65,000 of retirement income (or $130,000 per couple) from state income taxes.” Add in the warm climate and the fact that residents 65 and older can claim an exemption from all state property taxes on their home and up to ten acres and you’ve got a good place to call your new home.
#2 State to Retire to With Low Taxes: Wyoming
State Income Tax: None
Estate Tax/Inheritance Tax: No/No
There is no state income tax in the vast stretches of Wyoming. The Tax Foundation finds that the state has among the lowest property taxes in the nation — which means you can afford to have a larger homestead if you’d like.
#1 State to Retire to With Low Taxes: Alaska
State Income Tax: None
Estate Tax/Inheritance Tax: No/No
Though there are property taxes, residents 65 and up are exempt from taxes up to $150,000 of the assessed value of property. There is even no state sales tax in Alaska — which is good as you best save your money for the occasional trip somewhere a bit warmer when the winter sets in.
Read the Top 10 best states to retire to for taxes from Kiplinger here.
