Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, and Wyoming are the top tax-friendly states for retirees. All of them have no personal income taxes. 1 Other taxes, cost of living, and overall quality of life are also important considerations.
Social Security retirement recipients in Kansas, Missouri and Nebraska won't have to pay their states' income taxes on their benefits under legislation that takes effect for the 2024 tax year. More states are likely to stop taxing Social Security payments, with West Virginia and Utah appearing to be next in line.
Starting in 2025, tax Social Security benefits in a manner similar to private pension income. Phase out the lower-income thresholds during 2025-2044.
A: The best state to retire in 2024 is sunny Florida, thanks to its relative affordability and high quality of life for seniors. That's followed by Colorado, Virginia, and Delaware. Q: What state has the lowest cost of living for retirees? A: Alabama ranks as the most affordable state to retire in.
As a senior citizen, you probably will end up paying property taxes for as long as you are a homeowner. However, depending on the state you live in and often once you hit your 60s (usually around the ages of 61 to 65), you may be eligible for a property tax exemption.
What state is the best financially to retire in? A 2022 Kiplinger analysis ranked the most tax-friendly places in the country for retirement: Alaska, Florida, Iowa, Mississippi, Nevada, Pennsylvania, South Dakota, Tennessee, Texas, and Wyoming.
The results
The top two states to retire in according to our formula are — drumroll please — Alaska and New Hampshire!
It's no secret why Florida continues to be one of the best states to retire in 2024. With a warm and sunny climate, retirees enjoy Florida's beautiful beaches and outdoor activities year-round. From the Gulf Coast to the Atlantic, Florida offers endless opportunities for leisure.
Missouri and Nebraska have decided to stop taxing Social Security benefits in 2024. Kansas also joined in with a bill signed midway through 2024, so the state will not tax Social Security going forward.
As a general rule, if you withdraw funds before age 59 ½, you'll trigger an IRS tax penalty of 10%. The good news is that there's a way to take your distributions a few years early without incurring this penalty. This is known as the rule of 55.
Sadly for investors, the answer is no, there are no states without property tax. This is because property tax is a useful way for local governments to fund public services such as schools, fire and police departments, infrastructure and libraries.
Taxes aren't determined by age, so you will never age out of paying taxes. People who are 65 or older at the end of 2024 have to file a return for tax year 2024 (which is due in 2025) if their gross income is $16,550 or higher. If you're married filing jointly and both 65 or older, that amount is $32,300.
Higher standard deduction. If you don't itemize deductions, you are entitled to a higher standard deduction if you are age 65 or older at the end of the year. You are considered age 65 at the end of the year if your 65th birthday is on or before January 1 of the following year. Credit for the elderly or the disabled.
For those keeping track at home, these are Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, and Wyoming; tax collectors won't come after a single penny in these states if you take a distribution from your IRA or 401(k) or receive Social Security benefits, a pension, or even generate investment income (though ...
Alaska had the lowest average overall tax burden – measured as total individual taxes paid divided by total personal income – at 5.4%, followed by Tennessee (6.3%), New Hampshire (6.4%), Wyoming (6.6%) and Florida (6.7%).
Delaware—one of the smallest states in the U.S.—was named the best state to retire in 2024. This is up one spot from 2023, when it ranked number two.
Retiring abroad on $1,000 per month doesn't mean sacrificing quality of life. Many countries offer excellent health care, infrastructure and amenities at a fraction of the cost compared to the U.S. The cheapest places to retire abroad include Panama, the Philippines, Portugal, Malaysia, Mexico, Thailand and Vietnam.