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State Tax Rankings
Several U.S. states have become attractive destinations for retirees since they don’t charge state income taxes. Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming fall into this thrifty category. New Hampshire would but the state does charge a flat 4% tax on interest and dividend income.
So those states are the cheapest places to live, from a tax standpoint, right? When you look at the bigger picture, there are thriftier places to live, tax-wise. Why? Because you also have to consider property taxes and state sales and excise tax into the equation.
When you look at the percent of an average person’s income that is paid toward total state and local taxes, you discover that the least expensive state, from a tax standpoint, is Alaska, which assesses just 4.9% of the income of its average citizen. Florida and Tennessee are near the bottom (6.1%) but Texas (7.6%) and Washington (8.0%) might not be the thriftiest retirement destinations.
No reader will be surprised that New York (12.0%) is the overall state tax leader, followed by Hawai’i (11.8%), Vermont (11.1%), Maine (10.7%), California (10.4%), and Connecticut (10.1%). Retirees who want to live on the coast and still pay low taxes might consider Delaware, which assesses an overall 6.4% tax rate.
Disclosure Notice: The Wealth Conservatory® is a Registered Trade Mark of Comprehensive Planning Associates, Inc. - a Registered Investment Advisor with offices in New Hampshire, California, and Missouri. The Conservatory is not licensed to and does not engage in the practice of rendering legal or tax advice. Any discussion of either is for informational purposes only and you are strongly encouraged to seek appropriate counsel prior to taking action. The Conservatory and its representatives are in compliance with the current registration and notice filing requirements imposed upon SEC Registered Investment Advisors by those states in which the Conservatory maintains clients. The information contained herein should not be construed as personalized financial or investment advice unless the recipient has an executed and active client or member engagement with the Conservatory. The Wealth Conservatory® is a Registered Trademark of Comprehensive Planning Associates, Inc. Thank you.
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By Jay HutchinsSeveral U.S. states have become attractive destinations for retirees since they don’t charge state income taxes. Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming fall into this thrifty category. New Hampshire would but the state does charge a flat 4% tax on interest and dividend income.
So those states are the cheapest places to live, from a tax standpoint, right? When you look at the bigger picture, there are thriftier places to live, tax-wise. Why? Because you also have to consider property taxes and state sales and excise tax into the equation.
When you look at the percent of an average person’s income that is paid toward total state and local taxes, you discover that the least expensive state, from a tax standpoint, is Alaska, which assesses just 4.9% of the income of its average citizen. Florida and Tennessee are near the bottom (6.1%) but Texas (7.6%) and Washington (8.0%) might not be the thriftiest retirement destinations.
No reader will be surprised that New York (12.0%) is the overall state tax leader, followed by Hawai’i (11.8%), Vermont (11.1%), Maine (10.7%), California (10.4%), and Connecticut (10.1%). Retirees who want to live on the coast and still pay low taxes might consider Delaware, which assesses an overall 6.4% tax rate.
Disclosure Notice: The Wealth Conservatory® is a Registered Trade Mark of Comprehensive Planning Associates, Inc. - a Registered Investment Advisor with offices in New Hampshire, California, and Missouri. The Conservatory is not licensed to and does not engage in the practice of rendering legal or tax advice. Any discussion of either is for informational purposes only and you are strongly encouraged to seek appropriate counsel prior to taking action. The Conservatory and its representatives are in compliance with the current registration and notice filing requirements imposed upon SEC Registered Investment Advisors by those states in which the Conservatory maintains clients. The information contained herein should not be construed as personalized financial or investment advice unless the recipient has an executed and active client or member engagement with the Conservatory. The Wealth Conservatory® is a Registered Trademark of Comprehensive Planning Associates, Inc. Thank you.