Most Tax-Friendly States for your Retirement Income

By Equity Trust Staff1 Comments

There are plenty of factors to consider when planning your retirement. Being able to stay close to your grandkids, warmer weather, flexibility to travel, the list goes on and on. How much weight do you put on the taxes you will have to pay during your retirement?

Do you plan to work in some capacity during your retirement? If so, you might want to consider states without income tax or favorable income tax rates. If you have big spending plans in mind, considering state sales tax rates would be a wise option allowing you to enjoy more of the things you’ve been waiting to purchase with less of a tax burden.

One important point that MarketWatch’s Robert Powell points out in his article is that states have to generate revenue in some capacity, so it is important to be diligent in your research. Often states that are more lenient in retirement income taxation use property taxes to generate revenue.

When the various taxes are taken into account and all things being equal, Powell reports that Wyoming is the most tax-friendly state. Other friendly states include:
  • Alaska
  • Florida
  • Mississippi
  • New Hampshire
  • Nevada
  • South Dakota
  • Tennessee
  • Texas
  • Washington
States reported as some of the least tax-friendly include:
  • Nebraska
  • Rhode Island
  • Vermont
  • West Virginia
Read more here.