Most Tax-friendly State for Retirees.........

[jazz4cash]

is Delaware according to Kiplinger's "Best Of" list. Im a bit surprised they noticed as DE has moderately high state tax rate of just under 6%, but there is no sales tax and some nice deductions for SS/pension income for taxpayers over 60. I am in Maryland now, so I might look into this......any feedback or personal experiences?

 

[MasterBlaster]

As always these lists depend on the assumptions...

They depend on how much income you have. How much house you have. And how much "extra" cash you spend.

So Delaware has low income taxes...

Some states like California have outrageous income taxes but if you have lived in your house for many years the property taxes are low (due to Proposition 13).

You could make a case for a retiree in California being better off than someone in Delaware if in Delaware you have to pay high property taxes for a roughly similar house.

And so on and so on... It just depends.

 

[mathjak107]

there are so many hidden lil things that its best to get turbo tax for the states you are interested in and run them.

as an example pennsylvania has an occupational tax. its a sur-charge based on your occupation.

whats taxable under sales tax?

sewer water taxes?

etc

 

[renferme]

Pa. has a $52 occupation privilege tax, if you make less than $12000 per year,
you can get $42 refunded back, but have to wait till the next year to apply for it.
.
Pa's 3.07% state income tax does not apply to pensions, nor does the local 1% wage tax that is paid to the community that you live in.
.
Most of Pa. has high property taxes, for example I am now paying about $4800/year
on a house assessed at $186,000. ouch!
.
Sales tax in Pa is 6%, but not on food or clothing. Some counties, like Allegheny, can charge an extra 1% sales tax.
.
Most states, if they don't get you one way, they get you another way.
.

 

[Rich_by_the_Bay]

Most states, if they don't get you one way, they get you another way.

Bingo. Having lived in numerous states over the years, that is our conclusion.

The tax "environment" of a state is like inflation. There's the standard rate you can calculate, then there's your personal rate which distills down to what you get back in return for the taxes, what kind of housing you prefer, quality of life issues and so on.

20 years in Wisconsin (very high tax state) allowed us to utilize excellent public schools, good services ranging from trash pickup, good public services, parks, and 11 years of college for the kids at under $10k/y/kid at an exceptional university. It was a bargain.

Best I can figure, even comparing the high end to the low end states, in the end there's no more than a couple thousand bucks difference. Unless that's a show stopper for you, live where you want to live for your own personal reasons. If you must, it's asier to live in a smaller house than to move somewhere you'd rather not be to save a few bucks in state taxes.

 

[retire@40]

Alaska. They pay you to live there.

25 years of dividends
2006 $1106.96
2005 $845.76
2004 $919.84
2003 $1107.56
2002 $1540.76
2001 $1850.28
2000 $1963.86
1999 $1769.84
1998 $1540.88
1997 $1296.54
1996 $1130.68
1995 $990.30
1994 $983.90
1993 $949.46
1992 $915.84
1991 $931.34
1990 $952.63
1989 $873.16
1988 $826.93
1987 $708.19
1986 $556.26
1985 $404.00
1984 $331.29
1983 $386.15
1982 $1000.00

 

[FinanceDude]

Well.................it ISN'T WISCONSIN!!!!!!!!

 

[modhatter]

What are the Alaskan dividends from (oil) ?. Why do they vary so much and where did you get those figures from?

 

[retire@40]

What are the Alaskan dividends from (oil) ?. Why do they vary so much and where did you get those figures from?

http://www.apfc.org/alaska/dividendPrgrm.cfm

 

[jazz4cash]

Interesting..NO RESPONSES from anyone with 1st hand experience with Delaware? I say that cause it seems like people there don't wanna advertise they have a good deal. LOTS of folks commute from DE to Philly and Baltomore. Like someone said if they don't get it one way, they usually find another, but sometimes certain "groups" are favored and it seems that pensioners are favored in DE (according to Kiplinger's). BTW the income tax rate ~6% is NOT LOW, unless you live in CA or somewhere comparable.

 

[Patrick]

Interesting..NO RESPONSES from anyone with 1st hand experience with Delaware? I say that cause it seems like people there don't wanna advertise they have a good deal. LOTS of folks commute from DE to Philly and Baltomore. Like someone said if they don't get it one way, they usually find another, but sometimes certain "groups" are favored and it seems that pensioners are favored in DE (according to Kiplinger's). BTW the income tax rate ~6% is NOT LOW, unless you live in CA or somewhere comparable.

Maybe nobody wants to retire in Delaware?

 

[mickeyd]

I spent a bit of time in DEL a few years ago. As long as you don't live in Wilmington, it is pretty much an agracultural state. Nice places on the coast also. DuPont pays all of the taxes in the state, which is ok if you don't mind a few smokestacks.

 

[Nords]

I say that cause it seems like people there don't wanna advertise they have a good deal.

I notice that you didn't get any responses from New Jersey, Detroit, Chicago, or Cleveland either... and what about North Dakota?

 

[Hydroman]

It does depend on your individual circumstances and lifestyle as previous posters said My income will much lower and I am not a big consumer. I anticipate consuming even less when I retire. House is already mortgage free. A state with low property taxes withsome protection from excessive increases is my criteria. YMMV

 

[jazz4cash]

I notice that you didn't get any responses from New Jersey, Detroit, Chicago, or Cleveland either... and what about North Dakota?

Oh yeah..how about that.........then again, I didn't askfor feedback about those places

 

[Brat]

It is sooo circumstances specific. For example there are states that give special treatment to pension income. Sometimes older homes have limitations on property tax increases. There is no 'heaven' that works for all.

 

[Jane_Doe]

Jazz,

FWIW, we live near Delaware and often drive thru it to visit family in NJ. Roads are good. Always being worked on. Schools have bad rap (at least down in southern part). No sales tax - good for shopping. Don't know how their income and property taxes compare to MD. - That should be easy to find out, I would think. Overall, I think the State of Delaware has nice areas and would be worth looking at.

Jane