Tax Friendly States (especially for Retirees)

Kiplinger’s has put together an interactive map that shows tax friendliness for retirees … but they have links to States with no sales tax, or low sales taxes, no income tax, and more.

However, I post this with reservations because such an approach to making decisions has the tax-tail wagging the decision-dog. More important than taxes I think is the weather, natural disasters, other family member locations, hobbies, work, and many other factors that weigh in on decisions.

Governments need some source of revenue to fund themselves. If they don’t tax one thing, it is likely they tax something else. Thus, you need to look at how your affairs are currently structured, or would be if you moved, to see if you are in fact leaving a situation where taxes are structured one way (say income taxes on retirement income) only to find your taxes are higher elsewhere because of a different tax structure (such as, there is no income tax, but property taxes are higher, or sales taxes are higher, etc.).

Finally, in light of tax revenue shortfalls in many states and localities, taxes are likely to change everywhere.

PS. Another handy website for tax comparisons is the Federation of Tax Administrators. The Tax Foundation’s calculators and data tools sections may also be helpful.

About Larry Frank, Sr.

Larry R Frank Sr., MBA, CFP®, is an experienced financial advisor and a published author on Retirement Planning Research. Have a financial question? Click Here to Ask Larry

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3 Responses to Tax Friendly States (especially for Retirees)

  1. Larry Frank, Sr. November 29, 2013 at 3:47 pm #

    Another website with tax comparisons between two States … your current State and one you are thinking of moving to http://whynotmove.org/ (not an endorsement … simply providing this as a potential tool for your consideration).

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