One state's climate probably keeps it low on the list of places to retire. But if you are concerned about taxes, it should be your top candidate.
Alaska’s climate probably keeps it low on the list of places to retire. But if you are concerned about taxes, it should top your list of retirement destinations.
The Last Frontier ranked No. 1 in Kiplinger magazine’s latest annual analysis of the most tax-friendly states for retirees. Kiplinger explains that retirees have unique concerns to weigh when it comes to state taxes:
For instance … how generous are the property tax breaks for seniors? Are Social Security benefits taxed? What about your other forms of retirement income, including IRAs and pensions? …. The answers could determine which side of the state border you’ll settle on in retirement.
All of the top 10 states in the magazine’s 2016 analysis exempt Social Security benefits from state taxes.
In Alaska, as with several other top-10 states, there is no state income tax at all, so investment gains aren’t taxed either.
Additionally, there’s no estate or inheritance tax. There’s no state sales tax either. In two of Alaska’s biggest cities, there is no local sales tax.
One unique bonus: Alaska sends all permanent residents an annual dividend check from its oil wealth savings account. This year, that amounted to $1,022, which is down from $2,072 last year due to declining oil revenues.
The top 10 states in Kiplinger’s analysis are:
- South Dakota
Would you weigh the tax implications before settling on your ideal retirement location? Share your thoughts below or over on our Facebook page.