Top tax-friendly states for retirees

Want to retire to a place where state income and sales taxes, plus inheritance and estate taxes, aren't a burden? Consider these 10 states.

 of 12
 of 12

VIDEO ON MSN MONEY

75Comments
Nov 17, 2012 9:36PM
avatar
retire onto a houseboat and go up rivers in the summer time and down river in the winter - have a great time!!
Nov 17, 2012 9:34PM
avatar
We have lived in both Texas and Louisiana several times and retired in Louisiana without asking all the right questions.  Yes, Louisiana has no state tax on federal/LA state employees, but they do tax everyone else's retirement after a mere $6000 deduction.  According to my research, the deduction used to be $9000 several years ago.  It is punishings employees who retire from hospitals, refineries, etc.  Louisiana is right next door to Texas with no state income tax, and Texas' real estate taxes can be low depending on county/city.  Louisiana does give a $75,000 homestead exemption, but they value your house by the selling price where most places in Texas use an appraisal value quite a bit less than the actual FMV.  Also, the houses in central Louisiana are very overpriced versus many towns in Texas. For example, if a 2500 sq. ft. house sells for about $220,000 in central Louisiana....then you pay taxes on $145,000....that can be about $2000 real estate taxes in some areas.  That same house in some suburbs of Texas sells for $140,000 and taxes could be only $2000. So, it can be very comparable but NO state income tax.  If you get $24,000 in retirement ($2,000/month), your state tax on $18,000 can be about $2000/year.  It is all relative, but Louisiana could do much more to attract/keep retirees. 
Nov 17, 2012 9:24PM
avatar
I kept waiting to see New Hampshire on the list. NH has none of the taxes that were the requirement for this article.
Nov 17, 2012 9:22PM
avatar
90% of those places are too hot and humid.  That fact would trump all the other advantages.

I thought San Diego was a good place to retire because of the weather.
Nov 17, 2012 9:09PM
avatar

Too bad...another example of INCOMPLETE research and reporting. You included PA in your article, and while what you did report was correct, you failed to provide a complete picture. PA has State, County, and Local taxes on real estate in most of the state. So depending on the area in which you choose to retire, you could make an annual School Tax payment well in excess of your mortgage payment to say nothing of the "real-estate" portion of the taxes. You also don't include the "restaurant" tax of 6% - so not all your food is tax free. While the State Sales Tax of 6% is correct, Allegheny County is 7% and Philadelphia County is 8%. 

 

DO MORE RESEARCH BEFORE YOU REPORT! 

Nov 17, 2012 8:52PM
avatar
to Hazelstars, don't knock Alaska unless you've lived here.  Our winters are NOT as cold as S.D. N.D. WI, MI, etc., know your facts.  The only difference is the winters are longer.  We also, usually do not have near as much snow as the states listed above.  We do have a lot of tax breaks, and I assure you that if Obama tried giving AK away, he'd have a major fight on his hands.  Houses are not higher, and some states real estate is much higher, WA for example.  I know, I've lived there too.  After 65 you do not pay property tax, nor vehicle tags, there is a program for people that need heating assistance, etc.  I'm 71 and been here 30+ years, live by myself and manage just FINE!!!!
thank you very much

Nov 17, 2012 8:52PM
avatar
Alabama sucks and the sales tax is up over  9 , not sure where there information is taken but I can show you a reciept and there is no 4 percent, there is nothing here for your taxes... boring!
Nov 17, 2012 8:46PM
Nov 17, 2012 8:43PM
avatar
Another IGNORANT MSN article. No Texas and no Florida listed? Seriously?
Nov 17, 2012 8:27PM
avatar

Arkansas has many retirees.. because our cost of living is wonderful  for those people. plus if or when they do finally come here.. they love Arkansas, many buy property and if not move back soon will when they finally do retire.

 Our Governor Beebe , has just  presented his New Legislation list for the 2013  Legislative Session which begins soon, one of his prime points is to remove more sales tax from food, he hopes to totally eleminate any tax on food., our state will make up the diffrence on other things, if it's needed.

 Our STATE is mandated to stay within our STATE Budget. ( it cannot go over the monies we have in our state budget )

Come one and all to our beautiful state, once you see it YOU too will love it here.

Nov 17, 2012 8:23PM
avatar
Would you please get someone who knows what they are writing about!!
Nov 17, 2012 7:55PM
avatar
If you retire from Cali don't bother leaving. They'll tax your retirement no matter where you move...yeah, they're that broke...
Nov 17, 2012 7:42PM
avatar
While some of states mentioned have low income tax and sales taxes, there are other issues that seniors have to look at.  Things like, what real estate is going for in those areas.  Also, will they be able to afford to live in an area that has decent hospitals or medical facilities.  Some states, such as Illinois won't make you pay income tax on social security as long as you earn below a certain dollar amount. but that is pretty much asking you to live at poverty level and have your house paid for in full.  Most seniors don't want to live in cold climates such as Alaska even though you receive a check from the state just for being a permanent resident.  Sure you could live quite comfortably in Biloxi Mississippi, but you run the risk of losing everything you own in a hurricane. A number of seniors are becomming ex-pats and living outside the Unite States where their dollar can stretch a little further too.  There is more to look at than just income and sales tax though it does factor in.
Nov 17, 2012 7:22PM
avatar

We live on the Maryland side of the PA/MD.  Our plan was to move into the rural area just over the boarder into PA after retirement but MD just went and legalized gay marriage so we will stay put unless PA legalizes too.

The benefits of a recognised union more than outweighs the money paid in taxes!

 

Nov 17, 2012 6:47PM
Nov 17, 2012 6:41PM
avatar
...and the weather is crazy here.  Not as cold or snowy as it used to be.  The mid-atlantic states have had more snow than we have for the past few years.
Nov 17, 2012 6:39PM
avatar
They forgot New Hampshire does not have a sales tax, state income tax, inheritance tax or estate tax.
It's the Live Free or Die State.  We do have property taxes, though you wouldn't know it given the state of education in NH.  NH does NOT support education.  Florida has better schools!

Nov 17, 2012 6:01PM
avatar
Just what I was thinking... paddle faster, I hear banjos!
Nov 17, 2012 5:54PM
avatar
Yes the state has low taxes, but the school taxes will eat up your retirement income. The state has about 500 school districts and they answer to no one. The state regulation of their spending habits make a strainer look like a solid bowl. Many people have lost their homes due to nonpayment to these little fiefdoms. Our tax has gone up about 120% in 12 years. The state has a homestead rebate for money from gambling and that does not even cover the yearly increase in the school tax.
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.