Retirement groups work to curb loneliness
In the golden age, fighting loneliness and depression, Wisconsin’s seniors group is looking to add more members.
Fox – Milwaukee
You may retire from work, but you will not retire completely from paying taxes. The amount you pay after retirement will vary depending on the state you live in. There are currently 13 states where retirement income is not taxed.
1. Alaska
No one in Alaska will collect income taxes and therefore will not pay state taxes. This means you won’t face a state tax bill for Social Security benefits, pension income, or 401(k) or IRA distribution.
However, if you have the urge to suddenly move to the final frontier, it is important to keep in mind. Local sales taxes in Alaska can reach nearly 8% in some areas, so you need to be careful about where you will settle.
2. Florida
Florida is known for its rather sweet tax cuts. For example, there is no state tax.
- 401(k), 403(b) or IRA distribution.
- Pension distribution.
- Real estate or inheritance tax.
- Some essentials like groceries.
Two points worth considering whether you are considering moving there: The state is hit by growing insurance rates and if you want to avoid them via public transport, your options may be limited.
3. Illinois
Illinois’ relatively reasonable flat income tax is 4.95%. Better yet, it’s not taxing retirement benefits. That is, Social Security benefits, 401(k) and IRA distributions and pensions are exempt from state taxes.
Retirees get breaks, but the state makes tax investment returns, assets over $4 million, and groceries. Additionally, sales tax is one of the highest in the country.
4. Iowa
Social Security benefits are not taxable regardless of age. The state also does not tax retirement income for people over the age of 55. This includes distributions from the 401(k), 403(b), and 457(b) plans. SEP plans and simple retirement plans.
5. Mississippi
There is a good reason why Mississippi is considered tax-friendly. Hospitality State exempts Social Security benefits, pensions, 401(k) and IRA distributions from tax.
Mississippi has no real estate or inheritance tax while paying 4.4% flat state income tax on other types of income over $10,000. The income tax rate is expected to fall to 4% next year.
6. Nevada
Wages, retirements, or investment returns earned while living in Nevada are tax-free. Property tax isn’t bad, but sales tax is 6.85%, higher than you’d see in most other states.
7. New Hampshire
Like Alaska, New Hampshire does not collect normal income taxes. This means you will not pay any taxes on Social Security benefits, pensions, or IRAs and 401(k) distributions. Cherry above? Dividends and interest taxes were abolished earlier this year, and New Hampshire is one of the few states with no sales tax.
8. Pennsylvania
Pennsylvania offers an attractive flat income tax rate of 3.07% and does not pay penny with IRA and 401(k) distribution, Social Security, or pensions. However, if you are considering a move, we recommend keeping the state’s heavy inheritance tax in mind.
9. South Dakota
South Dakota is more than Badlands National Park and Mount Rushmore (although these are some really great features). The state does not tax personal income. In other words, your retirement benefits are 100% safe from state taxes. You also don’t have to pay taxes on income from dividends or interest. Furthermore, South Dakota does not collect inheritance or real estate taxes.
10. Tennessee
Like many states listed here, Tennessee does not tax personal income. If you are a resident, that means you can collect 401(k) or IRA distributions without your Social Security benefits, pensions, and state taxes.
- professional: Tennessee does not have state inheritance or real estate taxes.
- CON: The consumption tax is the second highest in the US
11. Texas
When you join a list of retiree-friendly states, Texas does not collect personal income tax. This means that money earned from work, retirement benefits, or inherited assets is tax-free. What you may get caught is the sales tax, which can be very high depending on where you live.
12. Washington
Not only do Washington residents have access to some of the most beautiful scenery in the United States, they also live in evergreen states without paying personal income tax. Washington taxes the sale of assets such as stocks and bonds (with profits of over $250,000 a year), but does not have to pay taxes on Social Security, pension income, or 401(k) and IRA distributions.
Fry ointment is the total sales tax in Washington, the fourth highest in the nation.
13. Wyoming
If you live in Wyoming, you do not need to pay state income taxes on wages, investment returns, or retirement and pension income, including Social Security and military retirement benefits.
In addition to maintaining the lid on state and local sales taxes, there is no interest and dividend income, or tax on personal or corporate income or inheritance.
Pay attention to state tax laws as they are updated frequently regardless of where you live.
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